Amending Capital Law to help Hà Nội implement TOD projects

The urban rail transport development project will help maximise urban space. Photo ktdt.vn

HÀ NỘI – A transit-oriented development (TOD) project is often large-scale, so the procedures and approval times are complicated and time-consuming.

Therefore, it is necessary to shorten the approval time and create conditions for Hà Nội to implement projects, according to urban development experts.

In urban planning, TOD is a type of urban development that maximises the amount of residential, business and leisure space within walking distance of public transport.

According to the General Planning for Capital Construction approved in the Prime Minister’s Decision No. 1259/QĐ-TTG dated July 26, 2011, Hà Nội has ten urban railway lines with a total length of 410km.

However, after more than 12 years of implementing the plan, the city has operated just 13km of urban railway (the Cát Linh-Hà Đông route).

Hà Nội Capital Transport Planning until 2030 with a vision to 2050, approved in 2016, sets a goal that Hà Nội must prioritise urban rail transport development that will account for 25-30 per cent and 35-40 per cent in the central urban area by and after 2030, respectively.

This need requires breakthrough and specific solutions when adjusting the Law on Capital to achieve the above planning goals.

According to a report by the Government on the implementation of railway transport development policies and the use of the State Budget to invest in railway transport, investment resources for urban railway projects in the city by 2023 will need more than VNĐ39.5 trillion (US$1.62 billion) in four projects.

And to invest in the remaining urban railway lines by 2045 (based on Decision No. 519/QĐ-TTg), it will need about VNĐ321 trillion, equivalent to $13.3 billion.

Thus, in order to have more capital to invest in the remaining railway lines, a policy solution of the draft Capital Law (amended) is to deploy TOD projects. A TOD project is a solution that can bring investment resources from society through the exploitation of land funds in the vicinity of the railway, underground and elevated spaces at the railway stations.

This solution is specifically stipulated in Article 39 of the draft amended Capital Law.

“We spend a lot of resources to open a road, because site clearance always faces many difficulties. Therefore, when amending the Capital Law, Hà Nội resolutely included TOD content, especially for urban railways,” said Lê Trung Hiếu, vice director of the Hà Nội Metropolitan Railway Management Board (MRB).

“This is considered a very important resource for the State to recover surplus value from land and use this source to invest in larger-scale transportation projects,” Hiếu said.

Specific mechanism needed

Notably, the draft amended law only regulates TOD projects applying to urban railways but not to other types of transport that are suitable for the development needs of the capital city. The complexity of an urban railway project requires a specific mechanism.

For roads, the TOD development model has been applied for many years in planning work without having to apply the TOD project mechanism as stipulated in the Draft Capital Law.

The law’s Article 39 states that the TOD project is an overall investment project to build an urban railway line associated with urban development along the route and is a key project of the Capital or the Capital region.

As a comprehensive project, the TOD project will include many component projects of urban railway construction, train carriage procurement and operating technology, urban areas, housing, commercial centres, and industrial parks around the station areas or TOD area, railway operation and maintenance, and site clearance.

Depending on the development conditions of each TOD project, such as conditions for building urban railway and exploiting land funds in the vicinity of the TOD area, investment will be determined as pubic, public-private partnership (PPP), Build-Operation-Transfer (BOT) or Build-Transfer (BT).

Projects that build urban areas, housing, commercial centres or industrial parks around the station areas will be determined by bidding or auction to select investors depending on their ability of land clearance and technical conditions when implementing the project.

The draft amended law stipulates that a TOD project is a comprehensive project to overcome the current obstacle that investors will only choose to invest (even through auctions) in highly profitable projects such as housing and commercial centre projects, not focusing on investing in urban railway infrastructure projects.

This leads to a situation that urban railway projects have to wait for public investment capital or ODA (official development assistance) for a very long time, so they cannot promote traffic advantages for urban projects and commercial centres.

On the other hand, urban area and commercial centre projects have not been aggressively invested in because of delays in urban railway project. As a result, the capital’s urban development is at a slow pace.

It is necessary to have a suitable process and procedures to shorten the approval time of TOD projects, creating conditions for the city to implement urban railway construction projects and other technical and social infrastructure works as well as housing and commercial and service items under TOD projects.

The Hà Nội People’s Council has decided on the investment policy for the TOD projects based on budget conditions and land area that can be auctioned to carry out urban reconstruction, new urban development and construction according to approved urban planning and urban railway development.

The council is allowed to use local budgets to implement independent public investment projects of compensation, support, and resettlement for TOD projects.

“In expanding TOD, it is necessary to pay attention to planning issues. In the draft Capital Law (amended), planning is not mentioned in depth because we already have the Planning Law,” said Dr. Lê Đình Vinh, director of Vietthink Law Firm.

“However, this amended Capital Law can completely set out criteria related to the planning of TOD projects such as the requirement of a TOD project to have synchronous planning with component projects and related spaces, while arranging resources and selecting investors to synchronously deploy component projects,” Vinh added. VNS