Vietnam’s high-speed rail project revived

Vietnam’s proposed North-South High-Speed Railway (HSR) is expected to improve transport quality for nearly half of the country’s population.

The country’s Ministry of Transportation presented a pre-feasibility study for the project to Vietnam’s Prime Minister Nguyen Xuan Phuc earlier this month, and the report created with the support of a foreign consultancy team found that north-south transport routes currently benefit 49 percent of the nation and serve a population which accounts for 61 percent of the country’s gross domestic product (GDP).

Having shelved the initial project in 2010, the Vietnamese government is now looking into reviving it. A study last year reported that a proposed 1,545-kilometre (km) HSR connecting Hanoi to Ho Chi Minh City with 20 stops may cost more than US$58 billion. Interestingly, the original project was shelved in 2010 over an estimated US$56 billion price tag.

In 2007, Vietnam’s then-Prime Minister Nguyen Tan Dung announced plans for a 1,630 km track linking Hanoi to Ho Chi Minh City. It was expected to reduce travel time by rail from over 30 hours to just under 10.

The project was initially estimated to cost US$33 billion and is based on Japan’s Shinkansen bullet train technology. Funding would be provided by the Vietnamese government, Japanese development assistance funds and loans raised by Vietnam Railways.

However, by 2010, cost estimates ballooned to over US$56 billion. Critics argued that the cost was too high, the resultant high fares would be unaffordable and the railway would not be able to serve the majority of Vietnam’s citizens as they mostly lived in rural areas.

Transport of choice

Rail may not be the transport of choice for Vietnamese. The latest available statistics show train ridership at 11.2 million, compared to 3.1 billion people who travelled by road; 164 million on inland waterways; and 31.1 million by air. The rise of regional budget airlines such as AirAsia, Jetstar, and VietJet have also made air travel cheaper, faster and more convenient than rail.

About 85 percent of rail transportation in Vietnam is on the 1,726 km North-South Railway between Hanoi and Ho Chi Minh City. The line was bombed numerous times during World War II during the Japanese invasion of French Indochina, the First Indochina War and the Vietnam War. Much of the repairs to it cannibalised materials from minor railway lines.

Apart from slower speeds, rail transport in Vietnam is also fraught with accidents and train crashes. Along the almost 3,000 km North-South Railway linking Hanoi to Ho Chi Minh, there are more than 4,200 illegal crossings, and in many sections, there are no safety corridors – houses can be found alongside the tracks.

Vietnam Railway Authority’s deputy head, Khuong The Duy said in 2017 that relocating these houses to create a 15-metre boundary may cost as much as US$2.2 billion based on 2013 estimates. The actual cost could now be significantly higher. In some cases, these squatter houses have grown into large urban areas.

In June 2017, the government of Vietnam decided that rail is crucial to the national transport network. It amended the Railway Law, which came into effect in July 2018. Investors are offered easy access to land and funding, cheap loans and tax waivers.

The revived HSR plans call for construction to be done in three parts: Hanoi to Vinh city (285 km); Vinh City to Nha Trang (364 km); and Nha Trang to Ho Chi Minh City (896 km). The first and third sections would be developed in the first phase at a cost of over US$24 billion.

The Tedi-Tricc-Tedis consortium which created last year’s pre-feasibility report said high-speed trains with speeds of up to 350 kilometres per hour (km/h) can compete with air transport. However, it recommended limiting speeds to around 200 km/h in the first phase of operation and increasing it upon full completion of the line.

The Belt and Road Initiative (BRI) gave rise to HSR projects in Lao PDR, Thailand, Malaysia and Singapore, to create an HSR connection from China to Singapore (Malaysia has since postponed plans for its HSR link to Singapore). Only Cambodia and Vietnam lack HSR projects.

It may be a bitter pill to swallow today for Vietnam as the country laid claim to having the first and most modern railway system in Southeast Asia back in 1881; with the 70 km Saigon (now Ho Chi Minh City) to My Tho line. The French who occupied Saigon then, continued with several other rail projects, including the North-South railway.

Despite competition from budget airlines and the unpopularity of rail travel, developing a modern HSR system may just be more a matter of pride for Vietnam than a necessity.

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