Authorities in HCM City plan to allow advertisement on public buses in order to help reduce the huge subsidies provided for the service.

Bus advertising is expected to help reduce subsidies

The city has spent huge amounts of money on building hundreds of public bus routes with thousands of vehicles that have served hundreds of millions of passengers per year since 2003. However, revenues from the service have been too modest compared to the investment, in addition to mounting subsidies.

In order to reduce subsidies for the service, the municipal Department of Transport sought approval from the city’s government to allow advertising on public buses in 2008. The department expected that the advertising could bring about VND100 billion (USD4.78 million) in revenue per year.

However, the proposal was turned down by the municipal government that issued a decision in June 2009 to ban advertising.

The decision meant that the city has continued to provide increased subsidies for the service year after year. The subsidies soared to VND1.268 trillion (USD60.72 million) in 2011 from VND734 billion in 2010, VND697 billion from 2009, and VND574 billion from 2008.

The figure is forecast to reach VND1.5 trillion (USD71.83 million) this year.

In 2011, the city’s government allowed the department to study a plan to allow advertising on public buses once again.

Municipal authorities will amend and supplement local government decision 39/2009/QD-UBND in the near future.