Vietnam's National Assembly passed a resolution on Saturday to pilot special mechanisms aimed at the development of Ho Chi Minh City.
The pilot policies will take effect from August 1, 2023. The government has been assigned to report on the three-year implementation of these policies to the National Assembly (NA), the country's top legislative body, at the last working session of 2026, along with a final review at the last session of 2028.
Speaking to legislators before voting, Le Quang Manh, Chairman of the NA's Finance-Budget Committee, said that the pilot implementation of these mechanisms and policies "will create a legal basis and motivation for the southern economic hub to develop quickly and sustainably".
Regarding investment, HCMC will be allowed to pilot an urban development model towards Transit Oriented Development, under which it can use the local budget to pay for resettlement compensation and support projects in the vicinity of railway stations and intersections along Ring Road 3. The municipal People's Committee has been given the right to adjust construction density and the social and technical infrastructure criteria of these projects.
According to the NA Standing Committee, this regulation will enable HCMC to mobilize investment resources, creating synchronous urban and traffic development similar to models deployed in developed countries like Japan, South Korea, and Singapore.
The legislative body will allow HCMC to implement public-private partnership (PPP) projects in the fields of sports, culture, health, education and training; and apply the build-operate-transfer (BOT) contract model to upgrade, expand, and modernize existing roads.
However, the city will not be permitted to use increased local budget revenues for new public investment projects.
Regarding finance and the state budget, the municipal People's Council will decide on and adjust fees and charges not yet included in the law to increase the city's budget.
The city will also be allowed to raise capital from the issuance of local administration bonds, domestic financial institutions, and the government’s foreign loans for on-lending. Outstanding debt will be allowed to reach the equivalent of 120% of the budget revenue portion that the city is allowed to keep for itself.
HCMC will also pilot a financial mechanism to reduce greenhouse gas emissions through carbon credit exchange and offsetting, and enjoy 100% of the revenue from all carbon credit transactions.
Solar power systems for self-use will be installed at the headquarters of administrative agencies and public non-business units.
In terms of attracting strategic investors, HCMC will decide on its own mechanisms, incentives and priorities for the production of chips, integrated circuits and new materials.
The resolution also features personal and corporate tax exemptions for the transfer of capital contributions and capital contribution rights to innovative start-ups.
Regarding construction - planning and investment, the resolution empowers HCMC to allocate social housing funds in areas where commercial housing is being developed, and in areas allocated or leased by the state in accordance with land use and urban and construction planning.
The city will also establish a department of food safety directly under the municipal People's Committee. This department will conduct inspections and handle administrative violations regarding food safety.
HCMC Chairman Phan Van Mai told reporters that the city will immediately start implementing these pilot policies.
In 2017, the parliament issued Resolution 54 that included special mechanisms for HCMC to create economic and social momentum for the 13-million-strong metropolis.
However, the results have failed to meet expectations, and most of the policies regarding financial management to increase revenue such as the equitization of state-owned enterprises and public asset auctions have not been implemented.