VietNamNet Bridge – The government of HCMC has given Saigon Transportation Mechanical Corporation (Samco) two more years to complete a project to manufacture a total of 300 buses running on compressed natural gas (CNG).

A CNG-fueled commuter bus manufactured by Samco. The corporation has two more years to complete the city’s project to manufacture 300 CNG buses – Photo: Van Nam

Previously, the city government assigned Samco to assemble the 300 environmentally friendly buses in 2013-2015 at a total cost of nearly VND165 billion (US$7.34 million). But the implementation period of the project has been lengthened to 2017.

The city government is spending big on the project in a bid to reduce bus emissions, save fuel costs of commuter buses and replace ageing buses in the city.

So far, Samco has manufactured only 20 CNG-fueled buses for Saigon Bus. CNG is supplied by PetroVietnam Gas Corporation (PV Gas) at four filling stations in the city.

Samco told the Daily last week that from next month it would produce CNG-fueled buses using technology of South Korea’s Hyundai.

According to Samco, the price of CNG-fueled buses is much higher than diesel buses, so the period for capital recovery is longer and this is a major barrier to using such buses for public transportation. There are insufficient supporting policies for enterprises to invest in such buses.

The Government has a policy to exempt tariffs on imported components for manufacturing CNG buses. However, Samco claimed that its imported engine frames used for such buses are still subject to import tax as the customs says only those equipment and components which are not made in Vietnam enjoy preferential duties.

Therefore, the price of CNG buses is driven up as Samco has to pay import tax for the engine frames it imports.  

Experts calculated CNG buses consume 30% less fuel than normal diesel buses but their price is over VND1 billion higher than the latter.

So bus operators want the city government to support them to get access to low-interest loans to buy CNG buses and offer bus services in a long term.

SGT