Personal vehicle fee proposal greeted with skepticism

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A Transport Ministry's proposal to impose personal vehicle fees draws mostly negative reaction

Traffic congestion on Ho Chi Minh City's Xo Viet Nghe Tinh Street. A Transport Ministry's proposal to impose personal vehicle fees has drawn skepticism about its feasibility to reduce traffic congestion in major cities.

Experts have expressed doubts over the feasibility of a recent proposal by the Ministry of Transport to charge a personal vehicle fee as part of efforts to clear clogged streets in major cities.

The ministry submitted the proposal to the government last week, seeking to collect the so-called "personal vehicles circulation fees."

Under the proposal, motorbikes in five centrally-governed cities - Hanoi, Ho Chi Minh City, Da Nang, Can Tho and Hai Phong - would have to pay between VND500,000-VND1 million (US$23.7-47.5) per year, while cars would be asked to pay between VND20-VND50 million yearly ($951-2,370).

Meanwhile, cars, with the exception of public transportation vehicles and buses, would also have to pay fees of between VND30,000-VND50,000 (US$1.4-2.4) when entering local city centers in the country during rush hours 6 a.m. to 8 a.m. and 4 p.m. to 7 p.m. every weekday, except for holidays.

Under the proposal, circulation fees for cars would be collected by the Vietnam Register, a state-owned body in charge of checking transportation quality and safety.

The money will be collected at fee-collecting stations.

Nguyen Huu Nguyen of South Vietnam Economic Studies Center (SVEC) said he was not sure the solution would help reduce the number of personal vehicles, especially motorcycles, because bikes have for long been the most effective transportation means for Vietnamese people.

"If the proposal is approved, people will consider the choice between personal vehicles and public transport, but since the public transport system is still poorly invested in, they will still pay to drive their bikes and cars," he said.


Vietnam, with 88 million in population, has around 32 million registered motorbikes and the number has increased by 10 percent over the past few years.

Nguyen noted that in Vietnam, only well-off people can afford cars, since the car prices here are usually two to three times higher than those in other countries.

"Those people will not leave their cars at home to take a bus in order to save a just little amount of money," he said.

Vu Duc Thang, deputy chairman of the HCMC Association of Consultants in Science Technology and Management (HASCON), predicted the traffic situation would worsen before and after rush hours if the proposal to charge cars entering local city centers is approved.

"I think car users will avoid entering city centers during rush hours. They will just do it before and after the designated rush hours.

"Congestion will not be eased, but will be moved from this time to another time."

Some experts predicted that the proposal to charge motorcycles in the five big cities will make it harder to manage vehicles since people will register motorcycles in other provinces.

In 2003, when HCMC halted licensing motorcycles in some inner districts, the number of registered motorcycles in suburban districts saw sharp increases, they said.

Vo Kim Cuong, chief of the HCMC Scientific Research Program on Urban Management, said the fees would place a burden on poor people, who use motorcycles for doing small businesses.

"It is the Transport Ministry's responsibility to reduce traffic congestion, not the poor people's," he said.

Hoang Duc Hau of Vietnam Bridge and Road Association said the ministry is still groping for solutions to curb traffic congestion and forgetting about the main reasons, like crumbling traffic infrastructure and poorly invested public transportation system.

"It takes a long-term strategy to solve traffic problems."

Transport Minister Dinh La Thang said at a January 3 press conference that money from personal vehicle fees would be used on traffic-related infrastructure projects aimed at reducing congestion and accidents.

He said that similar fees are collected in countries like the UK, Sweden and Singapore and that while those programs have yet to completely eliminate traffic congestion and accidents, they have helped reduce them in those countries, he said.

 "If a person resists to pay a VND500,000 fee, he will have to pay a VND5 million fine," Thang said.

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