North-South Railway Approved
Last month, we wrote about new proposals to extend the long-awaited USD 67 billion, 1,500 km north-south railway line with extra track when an investment plan was submitted to the National Assembly for approval (Document No. 685/TTr-CP).
North-South Line Approved
Last week, the eighth session of the 15th National Assembly approved construction of the line, with 443 out of 454 deputies (92.5 per cent) voting in favour on 30 November. Set to cut travel times from around 30 hours to as little as five, the government hopes that the massive national infrastructure project will boost growth and improve the country’s reputation among foreign investors.
Construction is set to begin in 2027 with the first high-speed trains, travelling at up to 350 km-per-hour, scheduled to transverse the north-south line in 2035, passing through 20 cities and provinces with 23 stations along the route.
It is expected that the project may start inviting contractors and preparing bidding dossiers as early as 2025 – 2027. As we mentioned before when discussing the construction of the Hanoi and HCMC metro projects, large-scale infrastructure projects like this have a habit of running behind schedule and over budget.
There will be two kinds of trains running on the line. The first, high-speed trains will run from Hanoi to HCMC in around five hours, stopping at five major stations along the line. The second, slower trains (with speeds of around 280 km-per-hour) will run on routes between major hubs such as HCMC to Nha Trang.
Building Domestic Capacity and Boosting Technology Transfer
Unlike previous rail infrastructure projects, such as the Hanoi and HCMC metros, Vietnam aims to fund most the north-south line with domestic funding and private finance, not official development assistance (ODA) from foreign institutions or governments, as this tends to come with certain restrictions, such as choice of contractor.
In doing so, the government aims to modernise its domestic rail and construction industries by increasing technology and knowledge transfer from the foreign companies chosen to participate in the project. In short, Vietnam hopes to become more self-sufficient rather than depending on foreign companies for the construction of domestic infrastructure projects.
Improving Logistics Performance and Increasing Economic Growth
The line is not just designed to reduce passenger times – important though this is. It also aims to improve Vietnam’s logistics performance, increasing cargo capacity on the country’s antiquated rail network and relieving pressure on road and air freight routes.
The faster movement of goods nationwide – and across borders, as the north-south line will connect to the Trans-Asia-Railway – should reduce logistics costs. In doing so, it should boost exports and economic growth, further cementing Vietnam’s position as a transport hub in the region.
In total, the north-south railway line is predicted to require the clearance of more than 10,000 hectares of land and the resettlement of over 120,000 people. It is also expected to create thousands of jobs in construction and other related industries while increased connectivity is predicted to boost growth in second-tier cities along the route.
Disclaimer: This article and its content are for information only and are not given as legal or professional advice. they do not necessarily reflect all relevant legal provisions with respect to the subject matter. Readers should seek legal or professional advice before taking or refraining to take any action.
