VietNamNet Bridge - Hanoians’ dream of owning cheaper cars after the tax cuts under the ASEAN Free Trade Agreement (FTA) may be dashed as local authorities are considering applying a quota scheme in an effort to restrict the number of cars in circulation.

Deputy Minister of Transport Nguyen Hong Truong, at a working session with the Hanoi People’s Committee, said he agreed with the plan to grant quotas for car purchases which aims to ease the traffic jam.

In late 2015, Hanoi authorities requested agencies to build a roadmap to reduce private transportation means, and show solutions in 2016.

However, experts believe that the quota scheme will not help.

Thai Ba Minh, former deputy director of the Ministry of Industry, said he does not think Hanoi would succeed with the solution, though this has worked well in Singapore.

Hanoians’ dream of owning cheaper cars after the tax cuts under the ASEAN FTA may be dashed as local authorities are considering applying a quota scheme in an effort to restrict the number of cars in circulation.

Minh pointed that there is a big difference between Vietnam’s and Singapore’s conditions. Singapore is a small country with one city on total area of over 700,000 square kilometers, so it is easier to control private transport means with the solution.

The problem is more complicated in Vietnam. If Hanoians don’t have ‘quota’ to buy cars, they would buy under the names of their relatives or friends in other cities and provinces. They would register cars in other provinces and roll on Hanoi’s streets as leased or borrowed cars.

Experts also think the suggested mechanism of auctioning the right to buy cars would not help. It is estimated that the car prices would decrease sharply as a result of the tax cuts within the framework of FTAs. And if so, people would have money to pay to auction for the right to buy cars.

They pointed out that all the measures to restrict private transport will not work until Hanoi can develop public means of transport.

Buses and taxis are the two most popular public means of transport in Hanoi. Taxi fees are unaffordable for the majority of people.  Meanwhile, available buses can only satisfy 15 percent of the travel demand.

As for the urban tramcar system, it is expected that two rail routes would be put into operation by 2017, namely the Nhon-Cat Linh route with the length of 12.5 kilometers, and the Cat Linh – Ha Dong 13 kilometers.

It is clear that people favor the subway over the tramcar. The residents in Thanh Xuan Bac residential quarter, just next the Cat Linh-Ha Dong tramcar route, would have to walk 300 meters to one kilometer to the nearest station, located on Nguyen Trai Road. 

Tran Thuy