According to a report from the Ho Chi Minh City Department of Construction sent to the Ho Chi Minh City People's Committee, the advertising project on means of transport (buses) was approved by the Ho Chi Minh City People's Committee in 2017 with the goal of exploiting advertising revenue to support the development of the public passenger transport system.
On that basis, the Department of Construction approved the auction plan for the right to exploit advertising on bus body and assigned the Public Transport Management Center to organize auctions for 4 bidding packages.
However, the results were not as expected. Only one bidding package was successful, including 25 routes with 492 buses, achieving a winning price of more than 161 billion VND. After fulfilling financial obligations and costs according to regulations, the City budget collected more than 135 billion VND in 3 years.
The remaining three bidding packages all failed even though the Department of Construction had adjusted the package division plan three times and continued to organize auctions. The auctions were all without businesses participating or unsuccessful. From March 2021 to now, the project has had to be temporarily suspended.
According to the Department of Construction, the project encountered many obstacles in the implementation process. Many transport cooperatives stopped operating the route, and the transfer of vehicles between units caused difficulties in vehicle handover. Advertising revenue is not distributed to transport units even though buses are asset of enterprises, reducing motivation to participate.
Many businesses are also concerned that decal sticking affects the new car paint, and many cooperative members do not agree to put advertising on the body of the car. In addition, the trend of advertising shifting strongly to digital platforms, social networks and television makes bus advertising increasingly less attractive.
On that basis, the Department of Construction proposed that the Ho Chi Minh City People's Committee terminate the bus advertising project.
Instead of centralized auctions as before, transport business units will be able to directly organize advertising activities on their vehicles, proactively find partners and self-determine rental prices according to market mechanisms.
According to the Department of Construction, the new mechanism will help businesses have more revenue to improve service quality, while reducing budget expenditures for subsidized bus routes and contributing to the implementation of policies to attract people to use public transport.
Regarding management, transport businesses and advertising units must still fully comply with the provisions of law on advertising, ensuring that it does not affect bus operations.
Regarding revenue sources, the Department of Construction proposes that businesses be entitled to 100% of advertising revenue after completing financial obligations according to regulations. This mechanism applies to non-subsidized routes, new bidding subsidy routes and routes being exploited under contracts.
Specifically for routes under contract, the Department proposes to continue allowing advertising exploitation until the expiration of the contract term. At the same time, about 30% of advertising revenue will be used for programs to encourage people to take buses, propagate public transport, support free tickets during holidays and Tet, maintain infrastructure and supplement amenities to serve passengers.
Currently, Ho Chi Minh City has 180 bus routes operating, including 109 subsidized routes and 71 non-subsidized routes, with a total of 2,432 vehicles.
