VietNamNet Bridge – Transport companies in the city have asked the HCM City People's Committee to seriously reconsider the ban on public buses carrying advertisements.

Transport companies in HCM City have asked the municipal authorities to revoke the ban on public buses carrying advertisements. (Photo: VNS)

The HCM City People's Committee imposed the ban in June 2009 following a proposal made by the Department of Transport in 2008.

In 2008, the city had roughly 2,360 buses operating on 153 routes. Each bus could earn ad revenues of US$2,000 – 3,000 per year, making up a total of US$7 million.

The Ministry of Culture, Sports and Tourism has also asked the city administration to lift the bans.

However, the City has retained the ban on grounds of traffic safety, claiming the ads could distract other drivers.

Do Kim Dung, deputy chairman of the Viet Nam Advertisers Association, said each bus could earn between $2,000 – 4,000 per year by carrying advertisements. He echoed the bus companies' claims, saying the money would contribute to the city budget and reduce its subsidy burden.

Increased subsidies

The municipal administration originally plans to subsidise the public bus service with about VND835 billion ($39.76 million) this year.

However, it is estimated that the subsidy will increase by VND221 billion ($10.52 million) by the end of this year because of the increases in petrol prices, according to Tran Quang Phuong, director of the city's Department of Transport.

According to the Centre for Operation and Management of Public Passenger Transport, the subsidy could increase by an additional VND200 billion ($9.52 million) or so when the Government's policy to increase minimum wages takes effect next month.

Experts have estimated the subsidy for the public bus service this year would reach a record of VND1.2 trillion ($57.14 million).

City subsidies for the bus service have steadily increased over the years from VND424 billion in 2005 to VND486 billion in 2006, VND522 billion in 2007, VND610 billion in 2008, VND676 billion in 2009 and VND841 billion in 2010.

For 37 bus routes that are not subsidised by the city, the ads are even more critical in helping deal with the loss in revenue because of fuel price hikes.

Phung Dang Hai, head of the HCM City Transport Cooperative Alliance, said buses on two routes – from the Mien Dong Bus Terminal to Nhon Trach and from the Cho Lon Bus Terminal to Bien Hoa – were incurring losses of VND2.5 – VND5 million ($120 – 238) per day because of the petrol price hikes this year.

Tickets on non-subsidised bus routes are more expensive at between VND5,000-25,000, compared to VND4,000-5,000 on subsidised buses.

Hai explained that ticket prices on non-subsidised bus routes were already high, so the bus companies were hesitant to increase it further for fear that customers would not use their services any more.

But if these bus companies don't increase their prices, they would obviously incur more and more losses in the future, he said.

Dr. Pham Xuan Mai of HCM City University of Technology said if the city allowed ads on 3,000 buses, it would bring VND120-150 billion ($5.71 million – 7.14 million) in revenue, which could greatly help reduce the subsidy burden on the city.

HCM City now has about 3,000 buses operating on 147 routes, of which operations on 110 routes are subsidised.

VietNamNet/Viet Nam News