Prime Minister Nguyen Xuan Phuc last week asked concerned government agencies to study the possibility of building a new transnational railway in Vietnam and consult experts to come up with the most suitable option.
La Ngoc Khue, former Deputy Minister of Transport, told VnExpress that a train that can carry both passengers and cargo, ideally at 200 kph, would be the most financially viable option. He said a transport ministry proposal to build a 320 kph railway will not be practical, given the country’s limited resources.
The railway sector’s share of transportation, both passengers and cargo, has been brought down to around 1.5 percent in recent years. For some comparison, cargo transported by rail in China is 750 times that of Vietnam.
Khue said these figures show major weaknesses in Vietnam’s railway system and an imbalance between the means of transport deployed in the country.
This has happened because the railway sector has suffered severe neglect for the last 40 years as authorities focused on building roads despite the fact that they take up a lot of land, carry high safety risks and consume high amounts of fuel.
The overdependence on roads has meant that logistics costs in Vietnam take up 21 percent of GDP, twice that of Thailand, lowering its competitiveness, according to the World Bank.
A pre-feasibility report by the transport ministry shows the 320kph train will be able to transport 364,000 passengers a day, but occupancy would rise to just around 40 percent of that figure by 2050.
Khue said it is clear that investment in a passenger exclusive railway route will not be of any real benefit.
The Japan International Cooperation Agency (JICA), which the ministry has consulted, has proposed that in addition to constructing a new railway, Vietnam should spend $1.8 billion on upgrading its existing railway system and use it exclusively for cargo transport. The upgrade will increase the railway sector’s transportation capacity by five times to 12 million tonnes a year.
However, Khue estimated that with 11 sections of the North-South Expressway being developed, road transport capacity could reach nearly 250 million tonnes a year when complete, far exceeding the railway sector’s capacity and would not change the current imbalance.
The prime minister has said that a high-speed railway, if built, needs to be the backbone of the country, connecting all regions and provinces.
This goal can only be achieved by a single railway system, not two, the former deputy minister said.
Data compiled by the Institute for Energy and Environmental Research shows that of 30 countries with railway systems studied, only a third have chosen speeds of over 300 kph. The rest, including developed countries like Norway, Finland and Denmark, have chosen trains with speeds of around 200 kph.
“Should Vietnam choose to go with the 320 kph option, it would be the poorest country in the world to do so,” Khue said. The country’s resources are not unlimited and developing such an advanced project will result in high costs and make it heavily dependent on foreign partners, he added.
Vietnamese companies are capable of developing a railway system with trains running at 200 kph, while a high-speed system will throw them out of the game, Khue said, adding that a transportation project should help take the skills and competence of domestic companies to the next level.
The transport ministry had revived the north-south high-speed railway in 2018 after it was rejected by the National Assembly in 2010 due to its astronomical $56-billion price tag, which was half of Vietnam’s GDP then. Experts have expressed concerns again over raising such huge sums of money.
The ministry proposed a 1,600 km long 320 kph railway route with a price tag of $58.7 billion. Several experts were concerned about the investment involved.
Dr. Vu Hoai Nam with the University of Transport had said that Vietnam should consider the project carefully because it would have to borrow money for it, increasing public debt significantly.
The Ministry of Planning and Investment, using calculations done by Dutch and German experts, said that by lowering the speed to 200 kph, optimizing the route and reducing the length of the route can bring the outlay by half to $26 billion.
At 200 kph, travel time between Hanoi and Ho Chi Minh City would be about eight hours, and five to six hours at 320 kph, it added.
Vietnam currently has over 3,000 kilometers of railway tracks, none of them high-speed.