Reservations, optimism as Vietnam lawmakers debates railway project

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A scrap metal trader passes a railway crossing in Ho Chi Minh City's Binh Thanh District. The Government plans to build a $56 billion express railway line connecting Hanoi and Ho Chi Minh City, but some NA deputies are worried the project will be a huge financial strength. (Photo by Nghia Pham)

A majority of legislators have agreed on the need for an express rail route traversing the S-shaped length of the country, but many of them are still very concerned over the project's funding and timing.

"The project costs a total of US$56 billion while the country is overspending by 5-7 percent every year. We will also invest another $36 billion in a nuclear power plant. How can we borrow (all this) money and repay?" asked deputy Nguyen Minh Thuyet of Lang Son Province at the ongoing session (May 20-June 19) of the National Assembly (NA) last Friday.

Earlier in the session, Transport Minister Ho Nghia Dung had reported on the plan to construct the $55.8 billion express railway project running 1,570 kilometers from Hanoi to Ho Chi Minh City.

The project will be constructed through 2035 on a total area of 4,170 hectares, forcing 9,480 households to relocate and another 7,049 to lose part or all their arable land.

Prime Minister Nguyen Tan Dung reiterated the necessity of the project. Speaking to the media on the sidelines of the NA session, he said: "We have considered transport by road, waterway and air, but these would not be able to satisfy transport demands. It is necessary to build an express railroad.

"It is necessary to remember that Japan began construction of an express railway in 1964 but could only repay all its debt to the World Bank in 1990. Similarly, we could borrow official development assistance now and pay it back in 40 years."

Transport Minister Dung also said the project's economic effectiveness maybe little, but it would help boost economic growth and bring good social effects.

However, several deputies suggested that the project be constructed later than the scheduled time of 2012 to focus on more urgent issues.

Not now

Ha Thanh Toan of Can Tho City said people prefer to travel by air for long distances, by road for short distances and to transport goods by sea. "Thus, we should now invest in other projects rather than the express railway," he said.

Deputy Phung Thanh Kiem of Lang Son Province also said the express railway project was not urgent. The government should be clear on what it should focus on to improve transport systems in the next decade, he said.

Nguyen Van Phat of Thanh Hoa Province suggested improving the existing railway network instead of building a new one.

The NA's Science, Technology and Environment Committee, which had examined the project before it was submitted for discussion at the NA session, was also concerned over its feasibility due to the large financial outlay and the lack of certainty that travelers will choose to use the bullet train.

The committee's chairman, Dang Vu Minh, said the project would need an average of $2.63 billion a year, of which two-thirds will be raised through loans. "In the context of debt to foreign countries amounting to 38.9 percent of GDP... it would increase the country's debt significantly if we borrow for this project," he said.

"With improved transportation by road and air, railways will not be preferred by all 57 million passengers as the government estimates. Many people cannot afford the new railway ticket, which is equivalent to 75 percent of an air ticket," he said.

Minh felt it was necessary to build the express railway but that the project should focus on some major sections and put off the rest till later.

In a report issued last year, the Nikkei business daily said Japan's government and its railway industry, facing domestic saturation, want to expand the market overseas for Shinkansen trains and have high hopes to exploit the potential in Vietnam.

However, the report added that cost estimates were still inadequate, and that Japan is believed to have suggested that Vietnam postpone the planned opening of the high-speed rail service until 2036 or later.


Many deputies also expressed their belief that the express railway would help boost the country's growth and improve the country's infrastructure to a developed stage.

Deputy Vo Hong Phuc of Thanh Hoa Province, also Minister of Planning and Investment, said people shouldn't use the current context when commenting on the project. "These calculations should be based on the future prospects of our developed country."

Several deputies from Ho Chi Minh City also supported the plan.

"It would be better if the project was completed earlier than planned," said Nguyen Dang Trung, Chairman of HCMC Bar Association.

Tran Du Lich, deputy head of HCMC delegates, said the $56 billion investment is a huge amount but the project was still feasible because it would be invested over dozens of years and taken from different sources, including public-private partnerships.

Deputy Dang Ngoc Tung was also optimistic about the prospects of an express railway. "Many constituents have told me that they wish the project could be completed soon. I am sure that residents in HCMC would be eager to travel through the country with the new railway."

The plan is scheduled to be revisited at the upcoming session on June 8 and set for approval on June 19.

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