For mega works like the North-South Express Railway, the country should focus its resources, ensure long-term effectiveness, and achieve multiple goals, said Prof. Dr. Nguyen Mai, chairman of Vietnam's Association of Foreign Invested Enterprises (VAFIE).
The public and press have been debating the maximum speed for the North-South Express Railway and whether it should be 200 km/h or 320 km/h. What do you think about this issue?
Currently, there are two proposed options, but I prefer the option with an operating speed of 320 km/h. This project was first tabled in 2007, but so far it has not been implemented. Countries like Japan and China are currently testing high-speed train networks with speeds of up to 600 km/h. In a scenario that the Ministry of Transport is about to submit to the government, the entire route will be put into operation by 2035. It means that after 12 years, maybe even longer, the railway, with a speed of 200 km/h as in option 1, will be outdated.
Another important issue is investment efficiency. We should take into account long-term effectiveness and aim for multiple goals. If we have the mindset of "making ends meet", it will lead to low investment efficiency. The construction of the North-South Expressway is an example. A series of sections on the route that have just been put into operation are already waiting for expansion applications to be approved. Therefore, when considering the investment efficiency of large projects such as the North-South Expressway and High-speed Railway, a long-term approach should be adopted.
Besides, infrastructure should always be one step ahead. Reality shows that places with convenient transport infrastructure see better economic development, and areas with expressways passing through are also more developed. Sa Pa town in Lao Cai province and Ha Long town in Quang Ninh province can be considered typical examples of benefiting from transport infrastructure.
Therefore, we should choose the most effective option but not the easiest one.
As a giant project, the North-South High-speed Railway will be implemented in phases. Could you share about this issue?
As scheduled, this October the Ministry of Transport will submit to the government a draft plan for the North-South Express Railway, before reporting to the Politburo, the premier policy making body of the Communist Party of Vietnam, in December. If passed, the government will submit it to the National Assembly for approval in 2024.
Then, relevant agencies will strive to complete preparations to start construction such as setting tasks for ministries, agencies and localities; holding negotiations with foreign partners; and organizing tenders to select contractors so that an investment policy can be approved in 2025 and work on the route can kick off in 2026.
As planned, by 2030 one section in the North and another in the South will be completed first. The entire route is expected to be finished by 2035, fulfilling many goals.
The project is expected to require a huge sum of capital. What do you think about mobilizing private sources for the project's implementation?
If the project is deployed under option 2 (a speed of 320 km/h), the total investment capital is estimated at about $58.71 billion, including $1.98 billion for site clearance, $31.58 billion for construction, $15 billion for equipment procurement, $5.82 billion for project management and consultancy, and $4.07 billion for contingency costs.
In my opinion, we should choose Japanese trains because the country has a system of new generation high-speed railways and stands ready to support Vietnam in the construction process. It is also the largest official development assistance (ODA) provider for Vietnam.
Carriages can be produced domestically as Vietnamese factories are thirsty for jobs, but they also need to innovate their technology. If we sign a locomotive purchase contract with Japan, it can include the transfer of carriage building technology, creating conditions to renovate technology for domestic enterprises and laying foundations for Vietnam to build other railway systems later without having to import equipment.
With about $32 billion in construction costs, we can combine capital sources from the state budget and public-private partnership (PPP) model. The state budget will be used to build tracks, bridges and tunnels. The construction of main stations should use private investments. This will create conditions for many domestic enterprises to recover and develop their production and businesses.
The expected investment capital for the whole project is more than $58 billion, once the mobilization of private sources and ODA loans is taken into account, and if construction is completed within 10 years, we will only have to invest about $5 billion per year, which is completely within reach.
The current story is to carefully consider what for foreign contractors and consultants, and what for domestic ones to achieve multiple goals and maximize efficiency.
The construction of the North-South Expressway proves that many Vietnamese enterprises have developed and mastered new technologies. They have also demonstrated their capacity to tackle difficult projects, while saving time and money.
Do you have any specific recommendations for the draft project?
Phase 1 should revise the express railway sections and carefully calculate the number of passengers. The southern section, Ho Chi Minh City-Nha Trang, should be kept unchanged but the northern section should be from Hanoi to Da Nang instead of Vinh town in Nghe An province.
Although the project is divided into two phases, 2026-2030 and 2030-2035, it is not necessary to wait for the completion of the first phase to deploy the second. After site clearance, the sections can be built alternately, shortening the construction time and thus saving money. This needs flexibility from both the National Assembly - the legislature of Vietnam - and the government.
We are completely capable of doing it quickly if we focus our resources and take a scientific approach. Lessons from the North-South Expressway construction will certainly be very useful. With the use of public investment capital, state agencies responsible for signing contracts need to exchange frankly with contractors and investors, and give rewards for quick performance and penalties for slow progress, avoiding delays and abuse of legal loopholes.