Vietnam gov’t mulls special package for high-speed railway

The Vietnamese government is considering a package of special mechanisms for the construction of a colossal high-speed railway that will run the length of the country.

Deputy Prime Minister Tran Hong Ha has tasked the Ministry of Transport to coordinate efforts with other central agencies, the Commission for the Management of State Capital at Enterprises, local governments, and businesses to study the mechanisms that will facilitate the deployment of the project.

The package will feature mechanisms related to mobilizing funds; training officials and engineers; raising the localization rate in tandem with local railway industry development; attracting investment in the public private partnership format; alluring foreign direct investment and technology transfer; and operating and business models.

Such mechanisms, once elaborated, will be submitted to the Politburo, the Party's premier decision-making body, and the parliament for approval, according to conclusions of a meeting chaired by Deputy PM Ha last week.

Regarding scenarios, Ha noted that the would-be high-speed railway will be aligned with world developments, have a designed speed of 350 kilometers per hour, and become a “backbone” for transport as required by the Politburo.

He requested bridges and tunnels be built to ensure the straightest route possible. The two main terminals will be located in downtown Hanoi and Ho Chi Minh City, the two biggest cities in the country.

The Ministry of Transport last month sought feedback on three scenarios for construction of the railway. The designed maximum speed will be from 200 to 350 km/h for passenger transportation. Estimated costs range from $67.3 billion to $72 billion, around 17% of Vietnam’s 2022 GDP.

Giving its opinions, the Ministry of Construction opted for the third scenario, which will transport an estimated 133.5 million passengers and 20 million tons of cargo per year, and cost up to $72 billion.

Meanwhile, the Ministry of Planning and Investment showed its support for the second scenario, under which the maximum speed will be 200-250 km/h for passenger transportation and 120 km/h for cargo.

Citing international experiences, the ministry argued that the designed speed of 350 km/h is not suitable for dual purposes – passenger and cargo transport. Countries that have railways with high-speed of above 300 km/h have already mastered technologies in this industry, had a complete cargo railway network and a much higher GDP than Vietnam.