The National Assembly Standing Committee reached a consensus to send the NA the draft of a resolution on piloting new policies for HCMC’s development at the fifth NA sitting that began on May 22, 2023. Apart from its endorsement of a new resolution as a replacement of Resolution 54 on a special mechanism for HCMC, the committee also suggested adding more policies with a view that HCMC needs more breakthrough policies to unleash resources and enable development so as to create positive growth effects on the region and the country as a whole.
Comprehensive policies
In mid-May, the NA Standing Committee held a session to discuss the draft of a new resolution on new policies for HCMC’s development. NA Chairman Vuong Dinh Hue, addressing the session, asserted that from political, legal and practical perspectives, is justifiable to issue a new resolution. The Chairman also praised the HCMC government and the Ministry of Planning and Investment for their laborious work in proposing comprehensive policies that are expected to give a strong boost and breakthroughs for HCMC.
The draft resolution comprises two policy groups with 44 specific policies, including 17 policies already provided for in Resolution 54/2014/QH14 and other resolutions on special mechanisms being implemented in other localities or included in draft laws for the NA consideration (first group); and the other 27 new policies (second group) centering on four areas of investment, finance-budget, land management-planning, and the State apparatus.
The Standing Committee agreed upon the first policy group; highly appreciated the second group and suggested that policies in this group need to have wider scopes of application to create breakthroughs, unleash resources, enable development, have dispersion effects and positive impacts not only for HCMC but also the entire region and the country.
For investment projects under the public-private partnership (PPP) format, for example, the Government proposed extending the PPP format to sports, culture, museum, relics and cultural heritage projects with a scale of no less than VND100 billion; applying the BOT format to road upgrade, facelift or expansion projects; and implementing investment projects under the BT format.
Chairman of the NA Culture-Education Committee Nguyen Dac Vinh proposed extending the scope for all the cultural fields instead of limiting it to four fields only; not prescribing the amount of capital for projects but delegating the decision-making power to the municipal People’s Council to suit the reality, as suggested by the NA Finance-Budget Committee. “In so doing, district or ward authorities can mobilize private participation in the cultural field,” Vinh said.
NA Chairman Vuong Dinh Hue agreed that the PPP scope can be further expanded to areas deemed necessary by the city if such areas are not specified in the law. The city should also enjoy flexibility in determining the investment scale of projects, since there are both large-scale projects for the city’s weighing and small-scale projects for grassroots levels’ consideration in the areas of education, healthcare or sports.
In addition, the NA Standing Committee agreed upon authorizing HCMC to apply the BOT format to road upgrade, facelift or expansion projects, provided that the central Government and the NA Finance-Budget Committee exercise a certain level of control to ensure harmonious benefits for the State, businesses and the public.
Regarding the authority for HCMC to implement BT projects, the NA Standing Committee also gave its backing. However, the NA Chairman suggested finetuning BT contracts to the practical situation. If the BT contract is settled by reimbursing the developer with money, it is not much different from a lending contract, and under such a practice, it is even better to issue municipal or project bonds. According to the NA Chairman, the compensation can be made in land, money, or both.
One of the breakthrough policies is the proposal to apply the transit-oriented development (TOD) model on a trial basis, under which urban development is closely associated with public transport development, deemed suitable for major cities like HCMC and Hanoi.
As per the draft Resolution, the HCMC government is allowed to implement this model in certain areas only, which include areas in the vicinity of stations along the centrally-approved urban railroads, namely Metro Line No. 1 (Ben Thanh-Suoi Tien), Metro Line No. 2 (Ben Thanh-Tham Luong), and areas in close proximity to traffic intersections on Ring Road No. 3 within the city’s precincts.
“Such regulations may have adverse impacts on the policy efficiency,” noted the Finance-Budget Committee, adding that applying the policy to other locations beyond the prescribed areas can bring about high efficiency. The committee suggested that the Government provide a more liberal policy, allowing the city to apply this mechanism in the entire city instead of within the vicinity of the three above-mentioned projects so as to bring about gentrification for the city, develop its traffic infrastructure, tackle traffic congestion, and improve the people’s living quality.
Pressure ahead
HCMC is expected to have good steppingstones as the NA Standing Committee arrived at a consensus to send the NA the draft of a resolution on new policies for HCMC’s development at the NA sitting that began on May 22. It is noted that current special mechanisms and policies provided for in Resolution 54/2017/QH14 will expire by the end of 2023, so the new resolution will ensure the continuity of the legal framework, enabling the city to tap resources for strong growth.
Especially, the NA Standing Committee has not only endorsed policies in the draft resolution but also suggested extending the scopes of certain policies to help the city make the most of resources, enable development and create positive dispersion effects for the region and the country. Only when delegated higher authority will the city be able to realize the goals set out by the Politburo specified in Resolution 31-NQ/TW. Accordingly, HCMC is mandated to strengthen its position as a major hub in the areas of economy, culture, education-training, and science-technology, and to strive to become a center in the Southeast Asian region and in Asia in the areas of economy, finance, services, culture, education-training, science-technology, and innovation-renovation, with high global competitiveness.
The pressure to finalize the draft resolution is high. Also is the high pressure to map out action plans and preparations to quickly introduce such breakthrough mechanisms and policies into real life, instead of expending one year for preparations when applying the NA’s Resolution 54/2017/QH14 in the past.
Despite high pressures, it has been off to a good start for HCMC when the NA Standing Committee has given its endorsement with the promise to improve the draft resolution, while leaders of the Ministry of Planning and Investment alongside HCMC have pledged to ensure the highest quality for the resolution, which will serve as a favorable prerequisite for the new development stage of the city.
