Vietnam has its eyes on a high-speed rail network which would link Hanoi to Ho Chi Minh City in just seven hours.
The project was initially rejected in 2010 due to the estimated US$56 billion price tag, which was at the time almost half of the country’s entire GDP.
The Ministry of Transport is currently assessing whether the project is feasible. The project would then be expected to resume in 2020, although it’s estimated that the full high-speed rail line won’t be completed until 2050.
High Speeds, High Hopes
Since 2010, Vietnam’s economy has continued to grow at an average of around 6% per year, and this has ushered in new infrastructure projects such as the sky train in Hanoi and the metro in Ho Chi Minh City.
Many of these projects are being supported by outside financial assistance — namely by Japan. This one is no different; Vietnam and Japan signed a memorandum of understanding during a state visit in 2006 in which Japan promised to help fund the project.
It’s expected that high-demand sections of the line will be prioritized. Hanoi to Vinh, and Ho Chi Minh City to Nha Trang, are likely to be built first, with the rest of the line filling out later on. This will help manage the substantial cost of the project, tackling it in smaller US$5 billion to US$7 billion packages rather than one gigantic lump.
The line will use Japan’s Shinkansen bullet train technology, reaching speeds of up to 200 km/h in the first stage of the project, and 350 km/h once the whole line is complete.
Vietnam’s current railway line was completed in 1936 by the French colonial administration. It spans 1,726 kilometres from Hanoi to Ho Chi Minh City, with travel times between the two cities around 36 hours.
The new high-speed rail project will build an entirely separate rail line, and would cut travel times substantially. However, concerns have been raised over the cost of tickets for the service, which might well be out of reach of most Vietnamese citizens.
On top of this there’s the issue of reduced rail customers. The number of people travelling by rail in Vietnam reduced by 15% from 2015 to 2016, with just 9.8 million people choosing the service in 2016.
According to the Civil Aviation Administration of Vietnam, the number of people flying in the country rose almost 15% between 2010 and 2015. It’s expected that this rate of increase will continue until 2020.
With travel times between Hanoi and Ho Chi Minh City under two hours by air, and tickets costing around the same as a rail ticket, it’s easy to see why people are preferring to fly. This raises questions over the need to build the new high-speed line.
Connecting the Dots
But by connecting the country with high-speed rail Vietnam is moving in the right direction. Much of the country is inaccessible by air and relies on the frustratingly slow rail service currently in operation.
The authorities also plan on upgrading the current railway to reach speeds of 90 kilometres per hour for passengers, and 60 kilometres per hour for freight in the next four years.
Also, with the option of rail to popular tourist destinations and economic hubs outside of the major cities, Vietnam’s economy can only continue to reap the benefits.
If the project is given the green light, then all eyes will be on the budget, with previous infrastructure projects notoriously rolling over deadline and costing significantly more than expected.
The bigger the project, the bigger the opportunities for success… and for failure. At US$56 billion, this one’s the biggest.