Vietnam is one of the most promising economies in terms of development in Southeast Asia. However, owing to lack of infrastructure, the Socialist Government of the People’s Republic of Vietnam has come up with a plethora of projects across the transportation sector under its Vision 2030. The socio-economic development plans (SEDPs) outline a series of five-year plans. The third plan – Five-Year National SEDP, 2016-20 – has prioritised private sector development, service sector development, integrating urban infrastructure, increasing public sector efficiency, etc. Amended in March 2009, the transportation-specific development plans (that cover the land, water and air transport infrastructure segments) are consolidated under the Transport Development Strategy 2020 (Transport Strategy 2020) to align with the country’s broader vision towards 2030.
The plan envisions 6.24 billion passenger movements annually by 2020. Of this, 86-90 per cent of the passenger movement will be by road, 1-2 per cent by rail, 4.5-7.5 per cent by inland waterways and 1-1.7 per cent by air. Further, total cargo volumes are expected to increase to 2.09 billion tonnes, of which 65-70 per cent will be moved by road, 1-3 per cent by rail, 17-20 per cent by inland waterways, 9-14 per cent by sea and the remaining 0.1-0.2 per cent by air.
Road
Roads accounts for a dominant share of freight transport in Vietnam, serving 77 per cent of all freight transport and 94 per cent of all passengers transported in 2016. Amongst the Association of Southeast Asian Nations countries, Vietnam has the highest number of road and bridge projects in the pipeline. The Vietnamese government has planned to invest $134 billion during 2016-40 in developing the road sector.
The Ministry of Transport (MoT) in 2016 reported that of the 28,000 km of road network, only 18,000 km was high quality, paved national roads and another 26,000 km was paved or semi-paved provincial roads. Under the Transport Strategy 2020, the government has planned the development of two important road networks in the country. A detailed master plan has been put in place for developing the North-South expressway. Estimated to entail an investment of $17.9 billion, the 1,811 km long project will be divided into 16 sections. It is scheduled to be completed over a period of 13 years, ending in 2023. The North-South expressway will run from Hanoi to Can Tho. According to the MoT, 650 km of the expressway will be built during 2017-20. The project is being implemented on a public-private partnership (PPP) basis and the state will contribute 40 per cent of the total investment capital.
Sea
With 3,200 km of coastline along with 114 seaports (of which 14 are large and have modern facilities) and some of the world’s busiest maritime trade routes, Vietnam’s sea transport segment is also poised for major long-term expansion. The country’s three largest ports are Saigon port in the south, Hai Phong port in the north and central Da Nang port.
Marine trade has expanded rapidly in recent years. In particular, the container throughput increased from 4.39 million twenty-foot equivalent units (TEUs) in 2008 to 12.28 million TEUs in 2017, registering a compound annual growth rate of 12.1 per cent
The Vietnamese government has approved a master plan for the development of the country’s seaport system, which calls for $20 billion to build new seaports and upgrade existing ones by 2020. The key areas that have been planned for development under the Transport Strategy 2020 include modernising sea transport keeping in mind its environmental effects, increasing the competitiveness of maritime transport to actively integrate and expand the shipping market in the region and the world, developing sea transport in synchronisation with other modes of transportation, etc.
Rail
Under its Transport Strategy 2020, the country has embarked upon the development of its rail infrastructure as well. Vietnam’s rail network is centred on a 1,726 km single-track mainline running from Hanoi to Ho Chi Minh City. One of the key rail projects undertaken for implementation by the Vietnamese government involves the modernisation and expansion of the national railway network and the construction of subway lines in Hanoi and Ho Chi Minh City. The government also proposes to construct a North-South high speed rail line linking major cities and economic zones across Vietnam. In addition, the MoT and the Korea International Cooperation Agency are currently studying the feasibility of a 500 km railway link to Laos.
The pre-feasibility study of the North-South high speed rail line project was conducted by a partnership led by a local consulting firm, Transport Engineering Design, Inc., with the support of a foreign consultant team including Padeco-Fukken-Yachio-Ernst & Young. The project is expected to entail an investment of $58.26 billion and will be implemented in a phased manner. Phase 1 (2020-32) will focus on the construction of the Hanoi-Vinh and Ho Chi Minh City-Nha Trang sections. Phase 2 (2032-50) will construct the section connecting Vinh to Nha Trang to connect the whole route.
Aviation
The MoT has planned to spend $15.4 billion (VND 350.5 trillion) to develop the aviation sector by 2030, with $3.7 billion (VND 84.4 trillion) to be invested by 2020 itself. The country’s aviation industry is expected to have 23 airports with annual air traffic of 144 million passengers by 2020 and 28 airports with annual air traffic of 308 million passengers by 2030. In order to secure project funding from private players, the Airports Corporation of Vietnam has planned to implement PPP projects as well.
In line with the government’s efforts and high profitability of the sector, a slew of private investors have shown interest in the development of Vietnam’s aviation infrastructure. The Van Don International Airport is the first privately owned airport in Vietnam. Located in the north-eastern coastal province of Quang Ninh, the airport has been built with an investment of $310 million and has the capacity to handle 2.5 million passengers per annum (mppa); its passenger handling capacity will increase to 5 mppa by 2030.
Another important project under implementation is Terminal 3 of the Da Nang international airport. The terminal is expected to entail an investment of $430 million (VND 10 trillion) and is expected to increase the total capacity of the airport to 44 mppa. Besides, construction of Terminal 3 at the Tan Son Nhat international airport and the Phan Thiet airport project in Binh Thuan province are the other noteworthy projects being undertaken to develop aviation infrastructure in the country.
In sum
Rapidly increasing trade and economic and population growth have made it critical for Vietnam to upgrade its transportation sector. Although some of the planned projects face a funding gap, which could hamper their timely implementation, recent reforms in the national PPP framework bode well for the transportation sector. This is particularly important for the planned road and aviation projects, where rapid passenger growth has affected existing facilities.
