How to mobilize 25,000 billion VND to restore Thap Cham railway

Proposal to restore 83.5 km of Thap Cham - Da Lat railway

Vietnam Railway Authority is reviewing the Pre-Feasibility Study Report for the Thap Cham - Da Lat Railway Restoration Project. The report was submitted by Bach Dang Hotel Service and Trading Joint Stock Company to the Ministry of Transport and Vietnam Railway Authority in December 2022.

The investor proposed the project to restore the Thap Cham - Da Lat railway line under the PPP method with an investment of nearly 25,000 billion VND. Photo: existing Da Lat station

Accordingly, the investor proposed to implement the Thap Cham - Da Lat railway restoration project under the PPP form. The project is under the investment decision authority of the Prime Minister .

The investment location is in Phan Rang - Thap Cham city, Ninh Son district ( Ninh Thuan province) and Don Duong district, Da Lat city (Lam Dong province). The restored route is about 83.5 km long, expected to include 16 stations and passenger stations (the old route includes 12 stations, the restored route adds 2 stations and 2 passenger stations).

“According to the approved Railway Network Planning, by 2050, the Thap Cham - Da Lat railway line will be restored to serve tourism”. According to Decision No. 1769/QD-TTg dated October 19, 2021 of the Prime Minister approving the Railway Network Planning: “For investment planning projects after 2030, in case localities or investors have investment needs, report to the Prime Minister for approval to implement earlier”.
Therefore, the Thap Cham - Da Lat Railway Restoration Project needs to be reported to the Prime Minister for approval to be implemented sooner," said the Vietnam Railway Authority.

Specifically, the project will restore the section from Thap Cham station to Trai Mat station, with a length of 76.8 km. Of which, the existing Thap Cham station will be renovated to connect to the route, a new passenger station will be built, and the cargo yard and warehouse will be upgraded and renovated; and a new depot and workshop for repairing locomotives and wagons in the Thap Cham area will be built.

The project will also restore and build new roadbeds based on the old route combined with adjusting some sections; Restore and build new 64 bridges, 270 culverts, 5 tunnels, 11 stations; Build the entire railway superstructure, including the cog rail section.

At the same time, the section from Trai Mat station to Da Lat station - the section currently in operation with a length of 6.7 km - will be upgraded, including the restoration and preservation of Da Lat and Trai Mat stations. The project also includes the purchase and installation of signal information systems and locomotives and wagons.

The entire Thap Cham - Da Lat railway is a single track, 1,000 mm gauge, designed speed of 30 - 60 km/h; using diesel locomotives and light-duty wagons.

The investor expects the project implementation progress from 2022 to 2029. Accordingly, the project implementation phase is from January 2025 to June 2029; Trial run and trial operation from June to December 2029.

Nearly 25,000 billion VND investment, what is the capital plan?

The investor proposed the total estimated investment for the Thap Cham - Da Lat Railway Restoration Project to be VND24,924 billion (excluding interest and financial costs), of which construction costs would be VND4,517 billion, equipment costs would be VND9,246 billion, and compensation, support and resettlement costs would be VND2,163 billion. If interest and financial costs are included, the total investment would be VND28,987 billion.

The investor proposed a contract to implement the project under the BOT form. Photo: illustration

According to Giao Thong Newspaper, Bach Dang Hotel Trading and Service Joint Stock Company proposed to invest in the project under the form of public-private partnership (PPP) with the form of build-operate-transfer (BOT) contract. Of which, the State budget capital from the Central or local level will spend 2,163 billion VND for site clearance and resettlement costs (accounting for 7.46%). Investor capital is 26,824 billion VND (accounting for 92.54%).

A representative of the Vietnam Railway Authority said that in July 2022, the Ministry of Transport assigned Bach Dang Hotel Trading and Service Joint Stock Company to preside over the preparation of the Pre-Feasibility Study Report for the Project to Restore the Thap Cham - Da Lat Railway Line under the PPP method.

After studying the project proposal of this enterprise, the Vietnam Railway Authority has guided the investor through the legal procedures. Accordingly, the investor needs to pay attention to the preliminary financial plan, demand forecast, revenue sources and the investor's ability to recover capital, the payback period and the project contract term, the payment capacity of the user community and the underwriter.

At the same time, clearly state the capital mobilization plan, including state capital participating in the project; State other projects operating according to the railway infrastructure of the invested project, the organization and management of project implementation between competent authorities, investors, project enterprises, localities, etc. Vietnam Railways also requests investors to state the type of project contract, analyze and compare a number of types of contracts on: preliminary technical and technological plans, preliminary financial plans, operational management, regulations on management and use of railway infrastructure assets, etc. to choose the appropriate type of contract.

“For this submission, the Vietnam Railway Authority has sent a document requesting the investor to fully supplement the components and quantity of documents such as the Pre-Feasibility Study Report, documents on the legal status, capacity, and experience of the investor... in accordance with the legal regulations on public-private partnership, the Construction Law, and related guiding documents to serve as a basis for review and submission to the Ministry of Transport for appraisal,” said a representative of the Vietnam Railway Authority.

The Thap Cham - Da Lat railway line was built by the French in 1908, and in 1916 the first trains began operating on the Thap Cham - Xom Gon section. The next section to Da Lat took 6 years to complete, in 1922 and in 1932.

This section of the line is very special, with a total of 16km of cog railway climbing the mountain in 3 sections. These sections are designed with additional cog rails between the two main rails of 1,000mm gauge. The locomotive is designed with additional gears attached to the cog rails. The line has a total length of 84km, 12 stations and runs through 5 tunnels through the mountains.

In 1986, almost all the rails and sleepers on this route were removed. Currently, only the Trai Mat - Da Lat section, about 7km long, is still being exploited for tourist trains.