HCMC nowhere near target to relocate makeshift homes along canals

According to the urban embellishment and development plan for 2021-2025, the city aims to complete compensation and relocation of 6,500 houses on and along canals at a cost of VND19 trillion (US$776.4 million).

This goal is to solve drainage problems, improve the environment and beautify the urban area.

However, the city has only compensated and relocated nearly 700 houses.

Makeshift houses encroach Doi Canal in HCMC's District 8. Photo by VnExpress/Quynh Tran

"The process is way too slow," Nguyen Huu Nguyen, a member of the HCMC Urban Planning and Development Association (UPDA), told a city workshop on Monday.

Nguyen said before this term, HCMC’s authorities had already set a target to remove 20,000 houses along canals in 2016-2020 and after that, adjusted the target down to around 10,000.

By the end of that term, only 2,500 had been relocated.

"A lack of funding is the biggest issue," he said.

Nguyen explained that the city’s state budget is limited while it is difficult to call for private investment as the project could not guarantee investors large benefits and therefore, they are not interested.

At the workshop, Vuong Quoc Trung, who works at the HCMC Center for Urban and Development Studies, agreed funding is the biggest difficulty.

"In order to relocate thousands of households and build resettlement area, it requires a huge grant that the city's budget could not cover," he said.

For example, it needs VND11.6 trillion to relocate over 3,670 households along the two sides of Doi Canal alone, he said.

Trung suggested the city invite private investors to join the project via the public–private partnership form by allowing investors to earn profits by running services at the resettlement areas.

Meanwhile, the process of relocating the houses also faces obstacles with the procedures, as in most cases, residents do not have any ownership papers, which is a must for compensation and relation decisions.

A section of Nhieu Loc - Thi Nghe Canal after renovation. Photo by VnExpress/Quynh Tran

To push forward progress, Nguyen of the UPDA suggested the city divide the entire plan into smaller projects and avoid setting a goal too big.

He also proposed the city allow private investors to use part of the canal bank for their business to make the project more attractive.

Du Phuoc Tan from the HCMC Institute for Development Studies said with the National Assembly granting HCMC more administrative autonomy in June, the city should take full advantage to flexibly raise funds to push projects that have been stalled for way too long.