Transport economics is one of the fields with great potential and plays a vital role for urban development, especially Hanoi, according to Mr. Phan Truong Thanh, an urban management expert.

"If exploited effectively and reasonably, transport economics will effectively boost urban development," said Mr. Thanh.

Transport projects are expected to improve overall accessibility and reduce transportation costs, in turn increase economic productivity and development. The projects can have various impacts on a community’s economic development objectives, such as productivity, employment, business activity, property values, investment and tax revenues.

Hanoi city - Lao Cai province highway. Photo: Hoang Ha

Transport improvements usually increase the scale and scope of economic, mostly for freight and social interactions, mostly for passengers. There is a wide range of economic benefits conveyed by transportation systems, some direct, some indirect (accessibility and economies of scale), and some induced. They are impacting transport supply and demand as well as the economy.

The direct benefits are mostly related to capacity and efficiency improvements that impact users and operators, particularly in terms of time and costs savings.

The indirect benefits are mostly related to accessibility gains and better economies of scale. Landowners also usually derive higher rents from the increasing intensity of passenger and freight traffic taking place in the vicinity.

The induced benefits are mostly related to economic multipliers and increased opportunities. Society benefits from increased mobility since individuals have a wider range of options for their activities and the associated social opportunities (education, social interactions, leisure).

Reducing the transport cost and time thanks to a developed transport infrastructure network is also a resource for transport economics.

Solutions to develop transport economics

To awaken the potential of transport infrastructure in big cities, especially in Hanoi and Ho Chi Minh City, Phan Truong Thanh put forth some solutions, including reviewing and completing policy mechanisms in investing and managing transport infrastructure.

Besides, applying science and technology in transport infrastructure must be enhanced, especially in supervising toll collection and penalties for traffic violations, Thanh said.

In addition, Thanh proposed to exploit and use effectively the land fund at major traffic hubs (railway stations, bus stations, wharves, ports, among others).

“I believe that, with awareness, responsibility and efforts of cities across the country, transport economics will be a driver, positively contributing to the development of modern and sustainable cities in the time ahead,” Thanh stressed.