Over the weekend, Vietnam approved the construction of a high-speed railway connecting the north and south of the country, a project estimated to cost $67 billion.
The 1,541-kilometer rail line will connect the southern metropolis of Ho Chi Minh City to the capital Hanoi in the north, supplementing the longer 1,729-kilometre railway constructed during French colonial rule. The new train is expected to travel at speeds of up to 350 kilometers per hour, reducing the journey between the two cities from the current 30 hours to just five hours and 20 minutes.
On Saturday, Vietnam’s National Assembly voted to move forward with the high-speed rail project, which has been on the government’s agenda for nearly two decades. According to state media reports, construction is expected to start in 2027, with Vietnam hoping that the first trains will begin running by 2035.
A high-speed railway makes a lot of sense for Vietnam, given the economic importance of the north-south corridor and the rudimentary state of the existing rail and road infrastructure. The Ministry of Transport projects that by 2050, even with significant investments in aviation and road transport, the north-south corridor will have unmet passenger demand of 122.7 million trips annually – a gap that the railway is intended to fill.
“This project is pivotal for restructuring transport shares and serves as a cornerstone for Vietnam’s leap into a new era of growth,” Deputy Minister of Transport Nguyen Danh Huy said over the weekend, as per the Associated Press. The existing north-south railroad, which is nicknamed the “reunification express,” will also be upgraded, and will continue to handle both freight and short-distance passenger transport.
According to state media reports, the high-speed rail line will pass through 20 provinces from north to south, and its bullet trains will stop at 23 passenger stations and five freight stations along the way. Tickets will be priced between VND1.83 million ($72) and VND7.34 million ($289), which, according to state media reports, comes to approximately 75 percent of the current airline fares.
Given the prominent position that the railway has enjoyed in the state media in recent weeks, the project has taken on great political significance for the Communist Party of Vietnam (CPV). In particular, it seems set to occupy a prime position in the party’s plan to launch the country into “an era of growth and resurgence,” as party chief To Lam said in a landmark speech last week.
The project also has an undeniable symbolic significance, emphasizing the historical watershed of Vietnam’s unification under communist arms. The project is earmarked for completion in a year when the CPV will celebrate the 60th anniversary of its victory over the southern Republic of Vietnam in 1975.
Underscoring the political significance of the project, Vietnam has said that it intends to fund the project itself. In October, the Ministry of Transport announced that the CPV Politburo had decided to build the project using domestic funds and technology, in a “spirit of independence and self-reliance.” Subsequent reporting suggests that the government has “also left room for international loans, noting that if preferential funding becomes available, they would propose this option for consideration by relevant authorities.” At the same time, Vietnam will seek to “ensure better control over construction, technology transfer, and long-term operations.”
Government officials say that their choice of high-speed rail technology “will be based on both cost and the potential for domestic technology acquisition,” as a state media report put it. Among the likely partners are companies from Japan and China, which have been partners in the development of the metro systems in Ho Chi Minh City and Hanoi.
In any event, the determination to move forward with the high-speed rail project marks a significant step forward in Vietnamese capacity and ambition. A north-south high-speed rail has been on the agenda since at least 2006, when Japan and Vietnam signed a memorandum of understanding on the railway’s development, but for many years the cost has been deemed well beyond Vietnam’s capability. In 2010, the National Assembly rejected the rail proposal as economically unsustainable, arguing that few Vietnamese would be able to afford the excessive fares.
Things have changed in the years since, however. During that time, Vietnam’s economy has grown considerably, its GDP has nearly tripled from $147 billion in 2010 to $429 billion in 2023, according to the World Bank.
Even so, the project will require a long-term investment that may not pay off for several decades. For the first four years of its operations, VnExpress reported last week, revenues are expected only to cover the costs of operating the trains and maintaining the rolling stock. It said that the railway is expected to cost $500 million per year during this period, with the government footing a substantial part of the bill.
It also remains to be seen whether the 2035 deadline is realistic. If the sluggish progress on the Hanoi and Ho Chi Minh City metro systems is anything to go by, this will be a significant challenge. Both projects have dragged on for more than a decade, and the engineering challenges required for high-speed rail could create further bottlenecks. According to a pre-feasibility study quoted by VnExpress, around 60 percent of the rail line will run over bridges; 10 percent of the line – more than 150 kilometers – will run through tunnels.
Despite the financial and technological uncertainties that have surrounded the high-speed rail plan over the past 18 years, the CPV now appears to have put its support squarely behind the project. With political as well as financial capital soon to be invested, it is becoming increasingly likely that Vietnam will fulfill its high-speed rail dream – on whatever timeframe.