Vietnam needs ‘revolution’ in railway transport

03-Dec-2021 Intellasia | Vietnamnet | 5:02 AM Print This Post

Vietnam’s railway system, after more than 100 years of operation, is outdated.

In recent days, the news about a Japanese partner giving 37 40-year-old train carriages to Vietnam has caused mixed feelings. The Japanese train carriages are more modern than the carriers currently used in Vietnam, which admittedly could be beneficial despite their age. But it is sad that over the past 100 years, everything has changed but the Vietnam railway industry has not. The Japanese carriages after 40 years of use are still considered good for Vietnam.

In recent years, although the domestic railway industry has improved quality, it has a single-gauge rail and outdated technology, and has always been inferior to aviation and road transportation.

Dang Sy Manh, general director of Vietnam Railways Corporation, said the actual market share of passenger rail transport accounts for less than 1 percent compared to other types of passenger transport.

The railway infrastructure, including rails, locomotives, and carriages, was invested in and built during the French colonial period. While most countries currently use a 1,435 mm gauge, Vietnam’s railways still maintain the 1,000 mm gauge.

In addition, the rail system has many bridges and curves of small radius through mountain passes, while many works have reached the end of their life, so the running speed is limited. The fastest train on the North-South route takes 32 hours, making it difficult for railway transport to compete with road and air.

All 300 locomotives of the Vietnam Railway Group were imported from Czechoslovakia, Germany, China, Belgium 30-40 years ago. The 1,030 passenger carriages and 4,000 freight wagons must use tractors to operate, which is inefficient. Even compared with old Japanese carriages of the same age with the same diesel-powered technology, Vietnam’s locomotives and carriages are more outdated.

Regarding the connectivity of railway infrastructure, Vietnam has a total of 3,143 km of rail with 15 routes, including seven main routes, which are even less synchronised and complete compared to when they were built by the French a century ago.

Lack of vision for railway development

Dr Phan Le Binh, a transport expert, told VietNamNet that railways are generally safer, with less emissions than other means of transport. The outdated railway has been caused by the lack of investment resources and more importantly, lack of proper attention.

It is estimated that the total capital demand by 2030 for both upgrading the old railway and investing in a new route will be about 24,000 billion VND. However, according to the Ministry of Transport, in the approved medium-term public investment plan for the 2021-2026 period, the estimated budget allocation for railways is just over 15,900 billion VND, accounting for about 4.7 percent of the total capital for the transportation sector (about 336,475 billion VND).

In 2021, the investment capital for railway infrastructure arranged through the Ministry of Transport is 4,121 billion VND out of a total of nearly 43,000 billion VND (accounting for about 9.6 percent of the total capital for the transport sector), but more than half of which (2,821 billion VND) spent on annual maintenance.

According to a transport expert, lack of capital is only part of the reason. The main reason for the backward and slow development of the railway is its super-low socio-economic efficiency, which does not meet expectations.

In the past few decades, Vietnam has focused on developing roads and aviation, and lacked vision and has not focused on railway development. While developed countries consider high-speed rail investment as a “lever” for socio-economic development, Vietnam lacks the determination to invest and bring the high-speed rail project into operation.

Vu Anh Minh, Chair of the Board of directors of the Vietnam Railways Corporation, said capital is an important factor, but most importantly the state needs to build a mechanism to attract investment capital in railways.

Even with the high-speed railway project, if Vietnam is determined, it can build the necessary sections in advance. When the project is feasible, the state only needs to spend money to build infrastructure, and at the same time offer other benefits from the project to call for private capital.

“The state can allow private enterprises to invest in the system of railway stations, cargo yard, means of transport to reduce pressure on the state budget. With suitable investment attraction mechanisms, we will not have to worry about a lack of capital for railways, including high-speed railways,” Minh said.

Building two segments of North-South high-speed railway first

According to the railway network master planning for the period 2021 2030, with a vision to 2050, the railway routes will be upgraded, and will connect to international transport routes. The plan calls for investment and resources to kick off construction of new routes. Priority will be given to the North-South high-speed railway (the two sections of Hanoi Vinh and HCM City Nha Trang) in the period of 2021 2030.

It is expected that the Hanoi Vinh and Nha Trang HCM City routes will be built from 2025 2026 and put into operation in 2033 2035.

According to the proposal of the consultant, the total length of these routes is 1,545 km, double track, 1,435 mm gauge, electrified, with design speed of 350 km/h, and the total investment of 112,000 billion VND.

Regarding capital resources, the consultant proposes that the state invest, own and manage high-speed railway infrastructure, and calls for private companies to invest in vehicles, and operate and maintain infrastructure, and pay infrastructure rental fees to the state. The state will encourage domestic enterprises to produce carriages and information systems to reduce costs.

Dr Phan Le Binh said that the modernisation of the railway system has been considered carefully in the past 10 years. This is the time to come to a decision on how to invest accordingly.

Whether the goal of building a high-speed railway is feasible or not depends greatly on the national orientation with the railway sector. Although investment capital for railways is huge, it is completely within the state regulation. Even the goal of starting the construction of the first segments of the route by 2025 2026 is feasible if the project is approved soon.

Vu Anh Minh said that the railway is the lifeblood of the country. The railways contribute to reducing freight costs, especially when there is a high-speed railway.

“When there is a high-speed railway, people in Ninh Binh and Thanh Hoa can go to work every day in Hanoi with a time of 30-45 minutes, so they do not have to live there. This will contribute to reducing pressure on the capital city’s traffic,” Minh said.

In addition, the construction of high-speed railway will also promote public investment, creating more jobs for businesses and workers. It will help domestic enterprises develop the mechanical industry, and railway electrification industry; and it will approach and apply technology used in the management and operation of railway traffic of developed countries.

In particular, when the railway develops, it will reduce transportation costs, and increase the competitiveness of domestic goods by reducing logistics costs.

When logistics costs are low, it will make an important contribution to trade facilitation, creating added value and improving the competitiveness of imported and exported goods.


Category: Economy, Vietnam

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