Massive capital requirements amid rapid network expansion

At a recent press conference on the city’s socio-economic situation held on August 21, the Ho Chi Minh City Management Authority for Urban Railways (MAUR) stated that under the previous planning, the city needed about USD 40.2 billion to develop 7 urban rail (metro) lines totaling 355 km.

However, following the administrative boundary expansion, the total planned network has now exceeded 1,000 km.

This ambitious scale creates immense financial strain. Beyond capital concerns, the city also faces difficulties in developing skilled human resources, building a domestic railway industry, and managing compensation, support, and resettlement to free up land for construction.

Unlocking capital with new legal mechanisms

Financially, Resolution 188/2025/QH15 from the National Assembly and the newly passed Railway Law (effective June 27, 2025) offer expanded mechanisms to mobilize capital.

In addition to funding from central and local budgets, the city can now access official development assistance (ODA), concessional loans, local government bond issuance, land value capture through the Transit-Oriented Development (TOD) model, and private capital through both direct investment and public-private partnership (PPP) models.

These new policies also allow for shortened investment procedures, promote private sector participation, and support the development of the domestic railway industry through technology transfer and workforce training.

Private sector encouraged to join metro investment

Notably, Politburo Resolution 68-NQ/TW (dated May 4, 2025) on promoting private sector development has established a vital legal framework encouraging private enterprises to co-invest in metro projects, thereby reducing pressure on the state budget.

The city now faces the critical question: How to raise over USD 40 billion to implement the 355 km of planned metro lines by 2035?

According to current financing models, state budget contributions remain the primary source, but growing reliance on alternative funding - including private sector investment - is essential if HCMC is to realize its metro expansion ambitions.

PV