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Hanoi to ban motorbikes by 2030

Released at: 12:08, 07/07/2017

Hanoi to ban motorbikes by 2030

Illustrative image (Source: cafef.vn)

Decision aimed at easing pollution and congestion in the capital.

by Quang Huy

Hanoi officials on July 4 vowed to banish motorbikes by 2030 to ease environmental and congestion woes, a decision that swiftly divided a city where two-wheelers are the main means of transport.

The capital now has 5 million motorbikes and is likely to have 6 million within the next three years in a population of about 7 million, compared with half a million cars. Critics blame the emissions-heavy motorbikes for Hanoi’s deteriorating air quality and worsening traffic congestion.

The decision to ban motorbikes by 2030 was approved by 95 out of 96 city councilors at a meeting on July 4. Officials said the number of vehicles was growing at an “alarming” rate, according to a report on the city government’s website.

“Traffic jams and air pollution will become serious in the future if no immediate management measures are in place,” the report said, adding that authorities would increase public transport options to wean people off their bikes.

Given Hanoi’s particular interest in using private-public partnerships (PPPs) for basic public infrastructure, the decision is believed to result in real estate developers that are keen to make infrastructure investment the biggest winners.

Last year, the city’s administration announced plans to raise VND150 trillion ($6.6 billion) for four of its urban railway lines in the 2016-2020 period. Three Vietnamese construction and real estate conglomerates, including Vingroup, Xuan Thanh, and Lung Lo, have reportedly pitched ideas for railway projects, but only Vingroup has a proven record of more than ten major real estate projects in the capital.

Late last month, Vingroup signed a memorandum of understanding (MoU) for part of the Hanoi urban railway network worth VND100 trillion ($4.4 billion), making it the first private company to invest in public transport in Vietnam, where only State-owned enterprises have operated previously.

According to a report from CBRE Vietnam, urban railway networks bring a number of benefits, in particular improving the ability of the population to access employment, retail, and recreation activities. The experience of other countries also suggests that one of the most significant impacts of urban railways is on property values. Rail development brings many noticeable changes to areas around train stations: land prices surge, real estate developments boom, and retailers and offices relocate.

“In theory, a home located near a public mass transit system should command a higher rent or sales price than one that is further away because good public transport allows those living nearby to more easily travel to and from destinations that are important to them,” said Managing Director of CBRE Vietnam, Mr. Marc Townsend, adding that this has been well proven in other countries where the premium for home prices in locations close to public transport ranges from 6 per cent to 45 per cent.

As part of the capital’s overall development plan to 2030, Hanoi has been building an integrated urban railway network with elevated and underground sections. Eight routes will run over 318 km at an estimated cost of $40 billion.

But of the eight routes planned, construction has only begun on four and has been slower than expected due to ballooning costs. The first two routes, the Cat Linh-Ha Dong and Nhon-Hanoi Station lines, are being funded using official development assistance and contractors from China and South Korea. The rescheduled opening dates for the two lines are 2018 and 2021, two and four years behind schedule, respectively.

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