Vietnam aims for high-speed rail in 2035

The National Assembly (NA) late last week adopted the country’s hallmark resolution on developing the high-speed railway, costing an estimated $67.34 billion.

A high-speed rail line spanning the nation is a gigantic undertaking, but leaders believe it is vital

The government proposal for the project outlines diverse funding sources, including allocations from the central budget in medium-term plans, contributions from local budgets, mobilisation of low-cost capital, and funds generated through increased revenues and expenditure savings. Private investors will also be invited to develop commercial and service areas at stations, as well as additional facilities during construction and operation.

Construction is set to commence in late 2027 and is scheduled for completion by 2035. It is hoped that preparatory work, including feasibility studies and design approvals, will be completed by the end of 2026.

The 1,540-km railway will stretch from Hanoi’s Ngoc Hoi Station to Ho Chi Minh City’s Thu Thiem Station, passing through 20 provinces and cities. Designed with a modern double-track system, the electrified railway will accommodate speeds of up to 350km per hour. While primarily designed for passenger transport, the railway will also meet dual-use requirements for national defence and security and could transport goods when necessary.

Using more than 10,800 hectares of land, the project will feature state-of-the-art infrastructure, including rail and signal systems comparable to those in developed countries.

Many NA deputies emphasised the importance of involving Vietnamese enterprises in the project. Le Dao An Xuan, representing the south-central province of Phu Yen, highlighted the opportunities for domestic businesses to supply equipment and machinery.

“This project will offer many opportunities to domestic businesses to provide equipment and machinery,” Xuan said. “I have seen that many companies have expressed their wish to engage in supply chains of the project. This is a very encouraging signal for the companies who are growing from strength to strength. Thus it is suggested that the government stipulate the specific the localisation ratio in the investment portfolio of the project. This will help drive Vietnam’s railway industry.”

NA deputy Duong Khac Mai representing the Central Highlands province of Dak Nong echoed these sentiments, stressing the importance of wooing domestic private investment. He noted that this would enable Vietnamese businesses to grow, acquire advanced technologies, and reduce reliance on foreign suppliers.

“This will also help mobilise resources from the whole society to reduce pressure on the state budget,” Mai said. “A 100 per cent state-funded project does not mean that the state should handle every aspect. Private investors with expertise in manufacturing rails, equipment, and train cars, as well as providing maintenance services, can create a market worth tens of billions of US dollars. Additionally, private enterprises could invest in station construction and related services, areas in which they already excel in aviation, road, and waterway sectors.”

Economic expert Tran Hoang Ngan, an NA deputy representing Ho Chi Minh City, underscored the transformative potential of the high-speed railway. He cited examples from developed countries, where similar projects have provided modern, convenient transport for residents, tourists, and international investors.

“I had the opportunity to experience the high-speed railway from Zurich to Paris, and I strongly hope Vietnam will soon have such a modern transport system,” Ngan said. “Fifteen years ago, this project was discussed but delayed due to insufficient conditions, including an unstable macroeconomy and high public debt. Today, with a stable economy, lower public debt, and increasing GDP per capita, the time is ripe to proceed.”

Ngan added that the railway would enhance connectivity, facilitate travel, pull in tourists and investors, and unlock the economic potential of provinces along its route, particularly in central Vietnam.

He also made some proposals. Firstly, this is a high-speed means of transport, so the technical and safety requirements are extremely strict.

“Don’t neglect this requirement because it relates to costs or revenues. Climate change in our country is increasingly severe, and the number of storms in the East Sea every year is also very high. Attention should be paid to the number of stations, depots, and design,” he said.

“Secondly, the project cost is very large, because of the gigantic investment capital, it is necessary to focus on mobilising domestic capital, foreign preferential loans, and limiting the use of official development assistance capital,” he suggested.

The third aspect is that the construction cost is about half of the investment capital, or about $33 billion. It is recommended to focus on using domestic materials and mobilising domestic enterprises with good capacity to participate in this project, he continued.

“Fourthly, it is needed to develop supporting industries for this project and urban railways. And lastly, the government must prepare human resources for the high-speed railway and urban railway industries,” Ngan explained.

The colossal railway project was initially tabled at the NA in 2010. However, due to capital shortages, it was delayed until now.

The first study report on a high-speed railway line in Vietnam was made by the Korea International Cooperation Agency in the 2005-2008 period, with priorities set to be placed on the two sections of Hanoi to Ha Tinh, and Ho Chi Minh City to Nha Trang.

A second similar report was conducted in 2008-2009 by a Vietnam-Japan joint venture company, with the investor being state-owned Vietnam Railway Corporation. Under this report, total investment capital for the project, running from Hanoi to Ho Chi Minh City, was about $55.8 billion, or half of the economy’s GDP.

Major railway requires debt considerations Concerns have been raised regarding the investment capital schemes and public debt safety for the national project to construct the North-South high-speed railway, an iconic venture anticipated to boost economic growth significantly.

The Capital Law to help develop Hanoi's railway system The Capital Law, set to take effect in January, permits investment in the development of Hanoi's urban railway system, prioritising the Transit-Oriented Development (TOD) model to ensure modernity, compatibility and sustainability.

Local groups poised to work on $67-billion railway Several domestic enterprises are stepping forward to join the building materials and manufacturing segments for the North-South high-speed railway project.