VietNamNet Bridge – HCM City bus companies are not keen on buying the 1,680 new buses envisaged in a Department of Transport plan over the next five years since they feel the loan-interest subsidy they are getting is not adequate.


HTML clipboard People taking a bus in HCM City's District 1. Bus companies are concerned about the local transport department's plan for 1,680 new buses in the next five years. (Photo: VNS)
The current interest rate they have to pay banks is a very high 18-20 per cent while the City only offers a subsidy of 6.48 per cent for the fleet augmentation, according to the department.


Phung Dang Hai, head of the Transport Co-operative, said a new vehicle cost VND1.8 –2.6 billion (US$86,100-124,400).


Besides, many operators were still repaying debts from 2003 when they bought 1,318 buses under a similar programme, he said.


At that time the interest rate had been only 3 per cent, he said, with any subsequent increase in the rate to be borne by the City.


He dismissed the current plan as impractical.

Transport operators have to pay 20 per cent to 30 per cent of the cost of a bus in advance, or up to VND780 million.


Nguyen Anh Leo, head of the city Transport Co Ltd, said his company had yet to repay the debt incurred under the 2003 plan, and couldn't afford to pay the advance even if it sold old buses.


Tong Thi Thu Thanh, deputy chairwoman of Quyet Thang Transport Co-operative, said her company's buses did not have to be replaced for nearly 10 more years and so buying them was wasteful.


Under the law, buses only have to be taken off the road after 20 years.


They urged the Department to either delay the project by a year or two so that they could repay their old debts or increase the subsidy.


VietNamNet/Viet Nam News