Vietnam plans $17 bln railway routes to seaports

Vietnam plans to mobilize $17 billion to build two major railway routes linking with seaports in the northern and southern regions, and hopes to begin construction by 2030.

The Ministry of Transport said in a recent response to National Assembly delegates that the 380km Lao Cai-Hanoi-Hai Phong railway will link Lach Huyen terminal in the northern coastal city of Hai Phong with Lao Cai province, which borders China, via Hanoi. The estimated cost for building the 1,435mm dual gauge railway is $10-11 billion.

In the south, the 128km Bien Hoa-Vung Tau railway will link Bien Hoa town, an industrial hub in the southern province of Dong Nai, with the Cai Mep-Thi Vai terminal in Vung Tau town, Ba Ria-Vung Tau province. The 1,435mm dual gauge railway has an estimated cost of $6.2 billion.

Given their large investment outlays, the two projects are included in the Prime Minister's list of projects targeting foreign investment in the 2021-2025 period; and they would also use significant public investment, the ministry said.

The new railway routes will reduce road traffic linked to seaports and help cut logistics cost in the country. Logistics cost in Vietnam is equivalent to 17% of the GDP at present, above the global average of 10.6%; and the government hopes to reduce this to about 16% in 2025.

The cost of transportation via railways or waterways is equivalent to 50-70% of road transport, the ministry added.

Refrigerated container train

Last Friday, state-owned Vietnam Railways inaugurated a refrigerated container train connecting Song Than station in the southern province of Binh Duong with Dong Dang station in the northern border province of Lang Son to facilitate shipments to China. Binh Duong is a manufacturing hub in southern Vietnam.

The train, featuring 21 cars with 40 refrigerated containers, can carry 900 tons of goods on the 72-hour route. It will mainly deliver farm produce to the domestic market in China and the European market via transit in China.

In February, Vietnam Railways launched an international cargo route connecting Pingxiang town in China's Guangxi province with train stations in northern Vietnam.

In the first phase, two trains will run each day on the Kep-Dong Dang-Pingxiang route, transporting 80-100 containers in total. The service will deliver electronics, industrial goods, construction materials, industrial wood and raw ore.

In January, Vietnam Railways launched a container route connecting Vietnam with Kazakhstan, halving the travel time compared to maritime routes. Starting in Ho Chi Minh City it passes through Hanoi and Xi’an city in China en route to Kazakhstan’s biggest city of Almaty, carrying mostly electronic products.

Of the total freight transport volume of 1,109 million tons in the first six months of this year, up 15.9% year-on-year, railways accounted for 2.2 million tons, down 26.4%, according to the General Statistics Office. The railway sector's freight volume was the second lowest, only higher than the aviation sector with 0.2 million tons. The GSO attributed the fall to fewer export-import orders and fierce competition from waterway transportation.