Vietnam’s railway modernisation on the anvil-
The Vietnam Railway Authority (VNRA) is planning to modernise Vietnam’s railway system. The estimated cost of the plan is $4 billion to $5 billion. Currently, the railway infrastructure of Vietnam is inadequate to meet the growing demand of goods and passengers. Moreover, the railway is considered to be the least preferred mode of transportation in Vietnam. In order to recover its lost market share, the VNRA is now planning to upgrade railway infrastructure along with easing customs procedures to make intercountry travel more convenient.
Current status
The railway system in Vietnam is owned and operated by the state-owned Vietnam Railways. The principal route is the single-track, north-south railway line running between Hanoi and Ho Chi Minh City. This line is 1,726 km long, which accounts for 66 per cent of Vietnam’s total network length of 2,600 km. The Vietnam national railway network uses mainly metre gauge, which accounts for 2,169 km of tracks, followed by mixed gauge (253 km) and standard gauge (178 km).
Road is the dominant mode of transport in Vietnam for both passenger and freight traffic, while rail remains highly underutilised. In the past five years, rail ridership has remained stable at around 12 million passengers, while the number of passengers carried by road has increased by more than 10 per cent.
In 2014, 1,070 million tonnes of freight traffic was carried overall in Vietnam, of which the road sector carried 76 per cent and inland waterways and shipping carried 22 per cent. Rail transport accounted for only 1 per cent of the total freight traffic carried in 2010, which fell further to 0.67 per cent in 2014.
Railway usage is minimal in Vietnam because of its limited network and long travelling time. Moreover, the current metre gauge does not support high speed trains and the conversion to standard gauge requires high investment. The Vietnam railway sector, despite improving its services, has been struggling to expand its market. The opening of many new highways has attracted more passengers and has led to a decrease in the demand for railway services. The quantity of cargo and passengers being transported has also plunged because of the inconvenience tourists face while crossing the Vietnam-China border gate.
The poor condition of rail infrastructure also has an impact on safety issues, especially at railway crossings. The poor state of railway infrastructure is also the cause of most of the railway accidents in Vietnam. As a result, the railway is now preparing itself to recover its lost market share.
Plans ahead
The government plans to upgrade the 1,726 km stretch of the north-south railway line from Hanoi to Ho Chi Minh City. The modernisation plan was introduced recently by the VNRA. The plan outlines major projects to be carried out until 2030. It aims to eliminate bottlenecks, such as the tunnels of Khe Net and Hai Van, and move the Da Nang Train Station out of the city; it has planned 90 other infrastructure upgrades to the railway system. Moreover, the country’s fleet of locomotives will be expanded to include 14 additional passenger trains and 24 freight trains.
Further, to eliminate the problems faced by inter-country tourists travelling between China and Vietnam, the VNRA has proposed that the Ministry of Culture, Sports and Tourism of Vietnam conduct administrative and customs procedures on the train. This will save time for passengers and make the international travel processes more convenient.
The VNRA has also suggested that tourists from China and Vietnam should be allowed to carry only their passports while travelling by train through the Dong Dang-Bang Tuong and Lao Cai-Ha Khau international railway stations. The railway authority is also planning to ensure healthy competition and close cooperation with other railway partners. The authority also suggested that all railway activities entailing unreasonable costs should be re-examined to lower charges. It has also proposed the offer of discounts when large cargo units are transported.
The Vietnam government has shortlisted two options to modernise the country’s railway system and increase train speeds. The first option is to increase the speed to 84.4 km per hour for passenger trains and 55.7 km per hour for freight trains by 2020 at a cost of about $3.96 billion while the second option is to increase the speed to 95.7 km per hour for passenger trains and 63.1 km per hour for freight trains at a cost of about $5.1 billion.
To execute the plan, the VNRA is considering different investment sources such as the state’s budget, official development assistance sources, and build-operate-transfer (BOT) and build-transfer models.
These changes will help the VNRA to attract visitors, passengers and cargo. Moreover, with China recently completing a 142 km link from Mengzi to Hekou on the border with Vietnam, there exists an added incentive for Vietnam to connect with its northern neighbour and biggest trading partner.
To conclude, while the strategy planned by the VNRA takes a long-term view of the development of railway infrastructure in the country, the need for an improved railway network is a far more immediate concern. The proposed changes are considered essential to boost the operation of railway services in Vietnam.
