After 23 years of failing to build one, how far is Vietnam's dream of high-speed rail?

Time Weekly

2024-06-30 17:12Times Weekly official account

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01Vietnamese Prime Minister Pham Minh Chinh said on the sidelines of the World Economic Forum in Dalian that Vietnam needs China's assistance in railway design, construction and technology transfer.

02Vietnam plans to build two cross-border railways, one connecting China's Yunnan Province with the northern Vietnamese port city of Haiphong, and the other connecting China's Dongxing City with Haiphong.

03Vietnam's Minister of Transport Nguyen Van Thanh hopes that China will help build a 1,500-kilometer north-south high-speed railway, which is expected to start in 2026-2027.

04However, Vietnam's high-speed rail project has been planned, rejected and re-planned many times, and has not yet been truly implemented.

05 In addition, the Vietnamese government has also thrown an olive branch to the German Siemens Group, but Siemens has not made it clear whether to undertake the entire north-south high-speed rail project.

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Source of this article: Times Weekly Author: Ma Huan

Vietnam, again, wants to build high-speed rail.

On June 26, Bloomberg quoted a statement published on the Vietnamese government's website, saying that Vietnamese Prime Minister Pham Minh Chinh told Lou Qi Luong, chairman of the China Railway Communication and Signal Group, on the sidelines of the World Economic Forum in Dalian, that Vietnam needs China's assistance in railway design, construction and technology transfer.

According to Lianhe Zaobao, Vietnam plans to build two cross-border railways, one to connect China's Yunnan province with the northern Vietnamese port city of Haiphong, and the other to connect China's Dongxing city with Haiphong.

Vietnam's transport minister, Nguyen Van Thanh, also expressed hope that China can help build a 1,500-kilometer north-south high-speed railway, which connects the capital Hanoi with Ho Chi Minh City, the largest economic city, and is expected to start construction in 2026-2027.

In fact, many years ago, Vietnam began to plan for the high-speed rail project, but for various reasons, its plan was rejected and failed.

With the smooth passage of the first high-speed railway in Southeast Asia, the Jakarta-Bandung high-speed railway in Indonesia, and the steady progress of the China-Thailand high-speed railway, the Vietnamese people have re-realized the necessity of high-speed rail.

The project has twists and turns

Vietnam's high-speed rail plans have had several setbacks.

There are two opinions in Vietnam: some have suggested upgrading the old railways to an average speed of 160-200 kilometers per hour for passengers and freight; Others believe that high-speed trains with speeds of 300-350 kilometers per hour should be built. Officials at Vietnam's State Railways argue that Vietnam should follow the lead of other countries by building new high-speed railways while preserving old passenger and freight routes.

As early as 23 years ago, in 2001, the Vietnamese government began planning for the high-speed rail project. In 2006, when then-Vietnamese Prime Minister Nguyen Tan Dung visited Japan, Japan pledged official development assistance for Vietnam's construction of the North-South high-speed railway, and the two governments signed a memorandum of understanding on the North-South high-speed rail project.

越南铁路 图源：Vietnam Investment Review

The North-South high-speed rail project initiated by Nguyen Tan Dung is known as Vietnam's "Dream Project". According to this plan, Vietnam, with Japan's assistance, will build a high-speed railway on the Shinkansen model. With an investment of US$56 billion (equivalent to 60% of Vietnam's GDP at the time), the "Dream Project" will start construction in 2014 and be fully operational by 2035, with a speed of 350 kilometers per hour.

However, in 2010, the "Dream Project" was rejected by Vietnam's National Assembly.

At that time, some people constantly raised objections or asked for caution during the deliberations of the Vietnamese National Assembly. Le Dang Dieh, a visiting scholar at the Hanoi School of Economics, said that the investment is very risky, and the general public will prefer the government to focus on more urgent needs such as medical security and power supply.

In 2013, the Japan International Cooperation Agency (JICA) submitted a report on the North-South high-speed rail project to Vietnamese authorities, proposing a proposed route and financing model, but the plan was not finalized. Since then, the Vietnamese government has conducted a long-term study on the North-South high-speed rail project in cooperation with relevant foreign enterprises.

It wasn't until 2019 that Vietnam's Ministry of Transport submitted another proposal with a lower price. The investment in the new scheme has been reduced by more than half to about 40% of the old scheme, while the designed speed has been reduced to 200 kilometers per hour.

Even so, Vietnam's Ministry of Planning and Investment believes that the total project cost is too high and may lead to a delay in the construction of railways and other infrastructure in other cities in Vietnam over the next 30 years.

The plan was eventually shelved, and the Japanese side was confused by Vietnam's operations. According to the Nihon Keizai Shimbun, a JICA official expressed confusion: "We can't take any action until we find out what the Vietnamese government is doing." ”

What are the other problems with the restart

In recent years, Vietnam's economy has grown rapidly, and the construction of high-speed rail has always been an agenda that the Vietnamese government cannot avoid.

In 2021, Vietnam issued the "2021~2030 Railway Network Plan and Long-term Plan to 2050", once again proposing to complete the construction of the North-South high-speed railway.

This time, there is a new voice within Vietnam about whether to build a high-speed railway. Vietnam's railways are now obsolete after 100 years of use, and the railway system has long been at a disadvantage, lacking competitiveness compared to land and air transport, and the development of high-speed railways is a solution that has been discussed for many years, but the decision is quite slow.

The government also noted that the North-South high-speed rail project could increase Vietnam's GDP by about one percentage point per year, while also greatly boosting domestic employment.

However, the high-speed rail project is large and complex. Deputy Minister of Transport Nguyen Dan Huy noted that Vietnam's railway industry does not have sufficient capacity to produce vehicles, equipment and components for the project, and there is a shortage of highly skilled experts to operate the project.

In October 2023, the China-India Jakarta-Bandung high-speed railway was officially put into operation, becoming the first high-speed railway to be completed in Southeast Asia. Also in December of that year, Vietnam and China signed dozens of cooperation agreements, including railway projects.

Since the beginning of this year, Vietnam has also sent a number of officials to visit China Railway Corporation to seek cooperation in high-speed rail. During his visit to China from June 25 to 28, Vietnamese Prime Minister Pham Minh Chinh expressed his desire to study the possibility of high-speed rail cooperation between the two countries.

图源：Vietnam Investment Review

However, Vietnam has not given up the possibility of cooperation with other countries.

On March 11, Vietnam's Finance Minister Hu Duc Phuc held talks with Japanese Finance Minister Jun Suzuki to reintroduce the North-South high-speed rail project, which this time has increased to $67 billion, bringing in 30% of foreign capital and raising the rest domestically, according to the Vietnam News Agency. Viet Nam hopes that Japan will provide financial assistance for the project.

Lu Quang Sheng, dean of the Institute of International Relations of Yunnan University, revealed that the Vietnamese government had also extended an olive branch to the German Siemens Group, which said it was willing to provide vehicles and technology transfer and provide rail signaling systems, but did not make a clear statement on undertaking the entire North-South high-speed rail project.

Vietnam is ambitious, but the high-speed rail plan has not really been implemented.

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