According to the HCMC Urban Railway Management Board, HCMC (pre-expansion) alone requires $40.2 billion to complete seven urban railway lines with the total length of 355 km. 

After administrative boundary expansion and mergers, HCMC’s urban railway network now exceeds 1,000 km, connecting to Binh Duong and Ba Ria-Vung Tau (pre-expansion). This poses significant challenges in mobilizing capital for railway development.

Recently, major conglomerates like Truong Hai, Sovico, Sungroup, and Vingroup have expressed their willingness to undertake railway projects in the country’s largest megacity.

In February, the National Assembly passed Resolution 188/2025/QH15, introducing a pilot program with special mechanisms and policies to accelerate the development of urban rail networks in Hanoi and HCMC.

Leveraging these tailored mechanisms, metro projects in HCMC are expected to gain momentum, attracting interest from billion-dollar conglomerates.

However, selecting investors for metro lines remains a complex process that must be approached with caution and based on multiple criteria.

Nguyen Hoang Binh, PhD, from RMIT University Vietnam, noted that large-scale projects like metro development often come with both successes and certain limitations.

He cited the “Rail + Property” model in Hong Kong (China) as a successful case, effectively integrating infrastructure with real estate development, backed by a clear legal framework for land value capture (LVC).

Under this model, the metro operator is granted the right to develop land surrounding stations to offset construction and operational costs, creating a “land value increase” cycle that continues to fund future metro projects.

In Tokyo, private railway companies create “destinations” along routes (supermarkets, entertainment areas, schools, hospitals) to attract passengers, develop multi-polar Transit-Oriented Development (TOD), and ensure seamless public transport connectivity. 

In Ahmedabad (India), the city government allocates a portion of land in redevelopment areas for building housing for low-income groups. In addition, when approving higher construction density, the city encourages or requires real estate developers to increase the proportion of floor area dedicated to social housing.

However, alongside success stories, metro project risks must be noted. For instance, inaccurate passenger demand forecasts can lead to financial imbalances, as seen in the early stages of Bangkok’s Skytrain (BTS). 

Thus, measures to address operational inefficiencies are critical to enhancing metro system reliability and safety.

Concerns about soaring prices

With numerous businesses eyeing HCMC’s metro network investments, Binh highlighted key considerations. 

First, the financial capacity, technical expertise, and project implementation experience of companies are crucial. In public-private partnership (PPP) practices, competitive bids are typically pre-screened based on financial capacity, and then evaluated based on both technical and financial criteria.

Second, HCMC needs to assess the feasibility of financial models and risk-sharing mechanisms, with a focus on transparent structures and fair risk allocation. The city should engage independent evaluators to review project feasibility, helping minimize risks from inaccurate forecasts in revenue, costs, and total investment.

Local authorities should also pay close attention to the integration of metro systems with TOD planning, LVC mechanisms, and environmental-social capacities such as site clearance and resettlement, in order to avoid delays during project implementation.

Additionally, TOD often increases land values around station areas. Without proper allocation tools, real estate prices could escalate, limiting housing and service access for low-income groups, Binh noted.

Offering a different perspective, Troy Griffiths, Deputy Managing Director of Savills Vietnam, argued that high-end homebuyers are unlikely to choose apartments right next to metro lines, preferring villas, lakeside areas, or more secluded locations. 

Thus, metro corridors will naturally form residential areas suited for buyers with genuine housing needs and affordable budgets. These residents can forgo personal vehicles while enjoying convenient public transport access.

The government’s role is critical in setting and maintaining proper development directions. However, forward-thinking developers also aim to build meaningful urban areas, not just for high sale or rental prices but to create distinctive, attractive, and sustainable urban zones.

He believes that authorities need not directly intervene in real estate sale prices. Price hikes by some developers occur mainly in the early stages when TOD project supply is limited. As HCMC’s metro system expands and project supply around stations grows, competitive pressure will naturally regulate prices. Developers cannot sustain unreasonably high prices when buyers have multiple alternatives.

Nguyen Le