North-south Express Railway Project: Unconvincing

In the national traffic system development and planning strategy, the North - South express railway is drawing deep concerns of people as it is a backbone traffic route for the regional economic development. However, reports on the implementation of the titanic project are not understood thoroughly.

 

According to many people, the North - South express railway is a mammoth project but the reporting and examination carried out by lenders will lead to doubts of objectivity and independence. At a workshop on building North-South high-speed railway held by the Ministry of Transport and the Vietnam Union of Science and Technology Association (VUSTA), many experts expressed their concerns that if the titanic railway project is not carefully calculated and balanced on the basis of budget viability, Vietnam will incur huge debts.

 

According to the plan, the North - South express railway will cost up to US$5.8 billion and is built from section to section. The 300 km Ha Noi-Nghe An will be built and put into operation first, before Ho Chi Minh City - Nha Trang route. In 2035, the entire railway system is expected to be completed.

 

According to the plan of the Vietnam Railway Corporation, by 2030, the travel demand in Vietnam will reach some 534,000 passengers a day while the system, including roads, waterways, airways and railways, can support only 378,000 passengers. The development of express railway will not only meet the growing travel demand of people but also improve the quality and shorten the travelling time. Besides, it is also a driving force for railway-connected localities to boost the economic development.

 

Regarding preparatory activities for the project, Mr Pham Sy Liem, Vice President of Vietnam Construction Association, said: Even though this is a great project, the implementation of concerned parties is completely cursory. They spent only six months for studying and two months for verifying the North - South high-speed railway. “How can such a large project be completed in such a short period of time,” said Mr Liem. “We determine that the largest source of capital for this project is ODA capital from Japan. Why were the reporting and examination done by this partner? This causes the lack of objectivity and independence.”

 

Mr Liem added that Vietnam had to be very careful in executing this project because it relies on borrowed capital. He stressed: “Japanese ODA loan for Vietnam is very large, borrowing conditions are quite easy but the value for each project is too large. For example, Vietnam had to borrow to US$550 million of ODA loans from Japan to build Can Tho Bridge while it used only US$60 million from Australian government to erect My Thuan Bridge. Perhaps, the ODA loan from Japan for building North-South high speed railway in Vietnam could be expensive.”

 

The continuous capital growth for building the project is also a concern. “Over two years ago, the investment report estimated total cost for North - South express railway at US$33 billion but now the figure was lifted to US$55 billion and could be US$100 billion in next five years. I feel extremely worried about the rush in implementing this large project,” he added.

 

Many participants to the workshop also expressed their doubts about the effectiveness of project implementation. Dr Nguyen Quang A, an economist, sceptically said: “I feel very happy to know that we will have express railways in the next 25 years. Moreover, it is extremely good if we can recover the investment capital in a few decades. In reality, Vietnam cannot overoptimistic because here resources are limited while there are many other things needed to be done like building subways and airports.”

 

Sharing the viewpoint with Dr Nguyen Quang A, Professor Nguyen Xuan Truc from Vietnam Bridge and Road Association had a doubt of the capital payback plan presented by the Vietnam Railway Corp. “In many countries, building the high speed railway is to serve the people who have to be on long way to work. So, Vietnam needs to consider whether Vietnamese people living in Vinh and working in Hanoi could be adaptable to the project or not because if people do not go to work by metros, the investment efficiency of the project will not be high. For instance, when the Ho Chi Minh Road is built, the report states a large number of vehicles used on this backbone road but the real figure is many times fewer.”

 

Criticising the report on the express railway project, many specialists said that there are many things to complete the project because in the following years, the traffic and transport sector will enhance investment and construction in a series of expressways, seaports and airports. Meanwhile, the investment capital for building infrastructure in HCM City and Hanoi is on very high demand. Meanwhile, the State Budget is limited, and we need to think twice before making a decision on investment.