Option Valuation

Option 1: applying Vehicle Quota System, the Singapore experience. 

Efficiency: the key advantages of this solution are firstly, the Hanoi government can effectively reduce the volume of new registration vehicles each year and thus, the number of vehicles flow on the road are substantial reduction. In the meantime, local government has more time to think of alternative efficient solutions to address the traffic congestion issue e.g. mass rapid transportation, subway train. Secondly, it can help to meet the UNFCCC commitment of emission gas reduction.  And, it can be an effective argument against other international agreements obligation; because reducing the gas emission from vehicles that mean the response to mitigate the impacts of climate change to humanity – which is the global issue. 

Disadvantage: the main risk of this solution is that if the vehicle quota system applies, it will take effect to the overall Hanoi capital and does not directly take effect to the 36 classic streets area. In addition, there could be a strong resistance of Hanoi people with the argument such as: the Vietnam government plan is to make Vietnam become an oriented-market economy[1] in 2013 (Decision 08/10/2009 of Government office) . The action of Hanoi government, which controls the vehicle volume,  is an intervention action to the car and motorbike market and that is not how a market economy works. 

Time Frame: this solution will take effect in the next 2 years and need to be evaluated its efficiency once a year. 

Resource: the finance for this solution is not much, whereas the local government can use the additional money, collected from the bidding to get COE, to improve or maintain the roads. 

Problem-solving: this option will not be likely to address the congestion issue adequately.


Option 2: applying Electronic Road Pricing model at 36 classic streets. 

Efficiency: the main advantages of this solution are firstly, the vehicles owners are aware of expensive cost and discourage to enter the 36 classic streets during the peak hours. Alternatively, the traffic congestion at 36 classic streets will be mitigated during the peak hour. Secondly, it can help to prevent the corruption of police force because the fee collection is done automatically by electronic devices. 

Disadvantage: the weaknesses of this solution are as followed, firstly, there could be a high opposition of Hanoi people and businessmen at 36 classic streets. The Hanoi people can complain that Vietnam just became a lower middle income country and we – vehicles owners – already had to pay various kind of fees to own the vehicles such as: registration fee, maintenance road fee, imported tax …etc and that is not suitable for our context yet. Besides, the businessmen will complain that their daily businesses are affected due to lesser vehicles entering 36 classic streets during the peak hour. In addition, it could be hard to implement this ERP model because the key point of ERP is the entry access must be limited but there are multi entry access to 36 classic streets. 

Time frame: this solution will take affect at least in the next 4 years include 3 years of devices installation and 1 year of informing citizens as well as skill training for traffic officers. 

Resource: this solution does not require much land use on the road but requires much financial resources to install the new technology devices. 

Problem-solving: if this option is employed, the contemporary congestion issue could be reduced in a short time. Then it will soon return because the high cost of entering central area will be soon balanced by citizen income improvement, due to Vietnam has a rapid economic growth pace as a whole and Hanoi capital as particular.


Option 3: applying Vehicle Free Zone policy. 

Efficiency: the obvious advantage of this solution is that it will take effect immediately to cope with traffic congestion at 36 classic streets. Moreover, it can help to improve the air quality, create a comfortable or green space for people, enhance the attractiveness of 36 classic streets and thus, advance the living environment for Hanoi people as a whole and the inhabitants in 36 classic streets as particular. In addition, the measure is quite simple and straight forwards so it will less be affected by corruption. 

Disadvantage: Firstly, the parking place for vehicles, the Hanoi government needs to build a multi-storey parking building nearby the area to meet the demand of large vehicles. Secondly, the opposition of local businessmen, they might object this policy because their daily businesses will be indirectly affected such as: the delivery trucks can not approach to their shops/restaurants. It can be simply resolved by arranging the time for goods delivery – this was successfully used in car free zone of the above example of old Hanseatic town in particular and others in general (Topp & Pharoah, 1994). Thirdly, the parking area for the vehicles of inhabitants in 36 classic streets while the multi-storey building is under construction, it will not cause much trouble because the houses in 36 classic streets normally do not have garage inside the house due to the old architecture. Cars often park outside the 36 classic streets area and motorbikes only park in the house. So in the meantime, it can simply solve by issuing a special label, which allows the motorbikes owners to enter 36 classic streets any time but they are just allowed to lead the motorbikes but not drive, for those motorbikes owners.  Vehicle owners have to park at the multi-storey parking buildings once they have done.

Time frame: this solution will take effect immediately, once it is applied. The building of parking places may require from 1 to 2 years to accomplish. However, the measure must be implemented in at least 1 year to evaluate the effectiveness.

Resource: the capital reserve for this solution is not substantial. However, it needs more land to build the multi story parking places nearby the 36 classic streets area. 

Problem-solving: It is likely that if this measure is implemented it will significantly decrease the number of cars and eventually reduce the traffic congestion in 36 classic streets area.


[1] Market economy is an economy in which decisions regarding investment, production and distribution are based on supply and demand and the prices of goods and services are determined in a free price system.