Vietnam’s High-Speed Railway is Back on the Agenda

Vietnam’s government has taken the first step toward building a long-planned high-speed rail along the country’s backbone, at a reported cost of $58.7 billion. according to a Reuters report Citing a government statement released yesterday, the country’s Ministry of Transport will next month submit a proposal to build the 1,545-kilometre railway to the Politburo, the top decision-making body of the ruling Communist Party of Vietnam (VCP).

The 1,545-kilometre rail line would connect the southern metropolis of Ho Chi Minh City with the capital Hanoi in the north, complementing the longer 1,729-kilometre railway line dating from the days of French rule. Like VnExpress reported last monththis new rail line would be used for passenger transport, while the existing rail routes would be used solely for freight transport.

The ministry’s plan foresees that the first two sections of the railway, which would have a combined length of 665 kilometers and would require an investment of 24.72 billion dollars, would be open to traffic by 2032. The entire project is scheduled to be completed by 2045. -2050. The Ministry already said waiting to start construction in the project for 2028.

In theory, rail upgrades are a logical move for Vietnam. The country’s thin and attenuated geography is ideal for rail infrastructure, and improving the speed and efficiency of the current “reunification express” linking Ho Chi Minh City and Hanoi, and its various extensions and branch lines, seems like a obvious. .

For this reason, a north-south high-speed rail has been on the agenda since at least 2006, when Japan and Vietnam signed a memorandum of understanding on railway development. (Tokyo is still the city of Vietnam partner of choicegiven the country’s allergy to large-scale Chinese infrastructure investments and persistent local sensitivities about the presence of Chinese workers in Vietnam).

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The main question is whether the enormous cost can be justified. Unlike its sister rival, the Chinese Communist Party, which has built tens of thousands of kilometers of high-speed rail since the turn of the century, the VCP does not have the technological know-how, industrial overcapacity, and surplus capital that have made breakneck economically feasible high-speed rail development for Beijing.

In fact, Vietnam’s bullet train plans have persistently sunk on the financial rocks. In 2010, the National Assembly of Vietnam rejected the high-speed rail proposal as economically unsustainable, arguing that few Vietnamese would be able to pay excessive fees.

“This project is too risky and too luxurious for Vietnam where we have so many other things to do with agriculture, education, electricity and other transportation projects,” said Vietnamese economist Pham Chi Lan. he told the Associated Pressarguing that the project would not serve the 70 percent of Vietnamese who live in rural areas.

The question is whether the economic and demographic logic has changed since then. The price of the project then $56 billion promoted to nearly half of the country’s gross domestic product (GDP) in 2009. But the country’s economy has more than double from $106 billion to $271 billion as of 2020, making the project marginally more feasible.

Even if the economy can be made to work, it would be almost a miracle if the project started construction according to the ministry’s schedule, let alone finished on time. The urban metro systems in Ho Chi Minh City and Hanoi have experienced persistent delays, stretching on for almost a decade, and there is no reason to think that a more complex high-speed rail project would be any different. This is especially so as land reclamation for the new line looms as a challenge of considerable complexity and political sensitivity, even for a one-party state like Vietnam.

Vietnam will one day have its bullet train, but it will likely be several decades before the first passengers are welcomed aboard the new Reunification Express.

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