Some enterprises and transport cooperatives in HCMC have decided to discontinue several ineffective bus routes due to heavy losses. Bus companies have twice written to the HCMC government, HCMC’s People Council and the relevant departments and agencies reporting difficulties with bus operations.
General Director of HCMC Transport Cooperative Phung Dang Hai said that several members have been burdened with debts and mortgaged houses and land to maintain commuter services, so the problem would be more serious if these routes were to continue operating.
As such, the cooperative submitted a letter to the HCMC Department of Transport to confirm that it started closing some inefficient bus routes on October 15.
Hai stated that the collection from ticket sales and money saved through subsidies only generate enough funding to cover fuel expenses and wages for drivers and conductors. Other costs such as interest, bank loan repayments, station fees, maintenance and repairs have failed to be covered.
Hai pointed out that bus route No. 14, run by the HCMC Transport Cooperative, brings in annual revenue of VND10.188 billion from selling tickets. The cooperative, however, pays employees VND16.606 billion per year, resulting in a loss of VND6.418 billion per year.
Nguyen Van Trieu, chairman of May 19 Transport Cooperative, said that bus route No. 33 generates VND27.4 billion in revenue from ticket sales per year. However, the expenditure, exclusive of deductions, to maintain its operations amounts to VND42.7 billion per year, leaving the cooperative with a loss of VND15.3 billion per year.
Quyet Thang Cooperative faced similar difficulties as its bus route No. 08 earned VND13.85 billion in ticket revenue over the first six months of 2018, but the cooperative spent up to VND19.47 billion paying its staff’s wages.
Hai of HCMC Transport Cooperative proposed that cooperatives operating routes with the remaining old buses and having no interest in replacing them with new ones should return their commercial rights over such routes to the State. He also suggested it is necessary for the municipal leaders to seek other potential investors for such routes.
Tran Chi Trung, director of the HCMC Public Passenger Transport Management and Operation Center, said that the existing bus subsidy was determined based on the prices issued by the city. A ticket now costs VND3,500 on average.
The prices of tickets remain unchanged, while the number of passengers has decreased, placing pressure on bus cooperatives.
Trung acknowledged that the center had advanced 100% of its expenses for the first six months to various enterprises to address the difficulties and help them maintain their operations.
The HCMC Department of Transport also submitted to the HCMC government supplements on estimated spending from the budget to subsidize bus operations in 2018 and received approval. However, the HCMC People’s Council asked the Department of Finance to work with the relevant departments and agencies to review prices following the new investment in buses and ensure efficiency.
In related news, the HCMC Department of Transport announced that after assessing feasibility, the city would continue to research and adjust the parameters of the first bus rapid transit (BRT) line project in HCMC, running along Vo Van Kiet and Mai Chi Tho avenues, in compliance with the urban development plan, Nguoi Lao Dong newspaper reported, quoting Tran Quang Lam, deputy director of the department.
Transport experts explained it was necessary to fully consider connecting BRT line No.1 with regular buses to pick up passengers in crowded areas as the BRT route will not exist for long if it is operated separately.
As planned, the city will have six BRT lines by 2050 to meet residents’ commuting demand, according to the city’s master zoning plan for transport development, of which the BRT Line No.1 was the first priority of the city’s transport sector to restrict the use of private vehicles, mostly motorcycles, and reduce traffic congestion.
The 23-kilometer BRT route is expected to connect An Lac Roundabout west of the city and Rach Chiec Terminal in the east, and have two lanes, 17 pedestrian bridges (11 newly built and six upgraded), 28 stops and eight parking lots.
The project costs an estimated US$143 million, with some US$123 million sourced from the World Bank and the remainder from the city’s budget.
When in place, the BRT line could serve a maximum of 132,000 passengers per day, running at a speed of 31.5 kilometers per hour.
According to the HCMC Department of Transport, while waiting for large-scale projects, the department will continue researching and applying practical solutions to common issues, including developing priority lanes for buses to improve their speed and ensure punctuality.
In 2003, the city launched a bus-only lane on Tran Hung Dao Street on a trial basis. The program ensured the punctuality of buses and saw a growth in passenger numbers and a decline in traffic accidents.
However, residents and the District 5 authority voiced their objections to the priority lane for passenger buses as it affected trade and the daily activities of residents living along the roadsides. As a result, the lane was discontinued. Following this, the city developed bus-only lanes on a few other streets, but these were only operated for a short time due to the hindrance of works that were underway.