Worrying about the time to "put down money" to build a high-speed railway
Báo Dân trí•03/10/2024
(Dan Tri) - "Where is the money to build?", "How to master the technology?", "Will the progress be behind schedule"... are doubts about the North-South high-speed railway project, besides the superiority it promises.
With a long and narrow S-shaped territory, the two growth poles of Hanoi and Ho Chi Minh City are 1,500km apart, the policy of developing a North-South high-speed railway has been affirmed as inevitable. However, when to invest? Where are the resources to invest? Will it be behind schedule? Will it be effective after it is built?... are difficult questions that make the project approval a difficult decision, having to be "raised and put down" for nearly 20 years.
Giant project
According to the Pre-Feasibility Report, 67.34 billion USD (1.7 million billion VND) is the estimated investment cost for the complete North-South high-speed railway. This is a huge amount of money even for the most expensive spending sector such as infrastructure construction. To put it in perspective, the above amount is equivalent to the cost of completing 4 Long Thanh airports, 48 Landmark 81 buildings (HCMC), 77 Cat Linh - Ha Dong railway lines or more than 120 500kV North-South lines, circuit 1. It is also equivalent to Vietnam's budget revenue for the whole year of 2023. The North-South high-speed railway has a total investment of 4 times that of Long Thanh airport in its completed phase (Photo: Hoang Binh). So, where will our country find the money to pay for this unprecedentedly large project? The first point is that the State will not need to spend the entire amount at once, but will gradually disburse it over 12 years (from 2024 to 2035). According to the Consultant's proposal, the State will allocate an average of about 5.6 billion USD for the project each year. This 5.6 billion USD accounts for an average of 13.64% of the total capital spent on infrastructure each year (assuming stable GDP growth and the State regularly spends 5.7% of GDP each year on infrastructure). According to the proposal, the project will be invested in public with capital from the central budget allocated in medium-term periods. In addition, government bond capital, local contributions, low-cost ODA loans with few constraints... can also be included in the capital structure. TEDI - TRICC - TEDIS consultants have provided data proving that if the project is implemented, the criteria for public debt, government debt, and foreign debt by 2030 will still be lower than the permitted level. The research results generally show that balancing capital sources to build a high-speed railway is feasible. However, it comes with conditions such as steady economic growth and guaranteed project progress.
Technology problem
The scale of investment capital is not the only measure of the complexity of a high-speed railway project. The difficulty lies in the fact that Vietnam does not possess core technology. The level of understanding and experience in the field of high-speed railways is still very limited. As Deputy Minister of Transport Nguyen Danh Huy confided, the Ministry's leaders have traveled abroad for the past two years to study high-speed railways with the mindset of "knowing nothing, going to school". The delegation of the Ministry of Transport went to Spain to learn about the experience of building high-speed railways (Photo: Mt.gov). From international experience, the Ministry of Transport has proposed investing in a 350km/h railway, prioritizing passenger transport. The train uses distributed propulsion technology, electrification, and runs on a standard gauge track of 1,435mm. With the above plan, Vietnam will certainly have to "import technology" along with a team of consultants and contractors from abroad. The choice of technology from which country will depend on many factors, including constraints on technology transfer and the use of domestic contractors. It is expected that Vietnamese contractors can undertake the work of site clearance, construction of lower-level structures such as roadbeds, viaducts, tunnels, and rough items of stations... Upper-level structures such as rail equipment, signal information, trains, station equipment... will need to be imported from abroad. Sharing with the press, Deputy Minister of Transport Nguyen Danh Huy cited the story of the Japanese Honda 67 motorbike. That car has been popular in Vietnam for a long time, Vietnamese people cannot manufacture and produce it. However, whenever the car breaks down, Vietnamese people can fix it. The same goes for high-speed railway projects. Vietnam may not have the manufacturing technology, but at all costs it must be self-sufficient in operation, maintenance and repair to reduce dependence on foreign countries. To do that, the Government will have to develop specific policies for high-speed railway investment, build a supporting industrial foundation and a team of specialized human resources for this type.
The time is ripe
The railway era in Vietnam began in 1885, with the sound of the train whistle and the bustling footsteps of pedestrians on the Ben Thanh station platform. The Saigon - My Tho, Hanoi - Saigon, Hai Phong - Kunming... lines were built one after another. The Indochina Railway was a means of colonial exploitation of the French colonialists, but it also made Vietnam a country with railways very early in Southeast Asia. The route shaped large and small cities stretching from North to South. The national railway, developed during the French colonial period, is now outdated and in conflict with roads (Photo: Ngoc Tan) However, that glorious era has faded. Due to outdated technology and degraded infrastructure, railways have become a means of transport with a bad reputation such as being slow, frequently having accidents and incidents, and having low transport capacity. Looking at countries in the region, Vietnam's railway industry is in a "first-mover, last-mover" position. At the end of 2021, Laos opened a 160km/h high-speed railway connecting to China. In 2023, Indonesia inaugurated the first high-speed railway section with a length of 140km, designed speed of 350km/h. Mr. Nguyen Van Phuc, former Deputy Chairman of the National Assembly 's Economic Committee, said that in the vote on the investment policy of the North-South high-speed railway in 2010, the issue that most worried delegates was "first - where is the money". At that time, the total investment of the project was calculated to be 56 billion USD, accounting for half of Vietnam's GDP. Public debt safety and budget deficit are among the main factors that made the National Assembly decide not to approve the project. Now, after nearly 14 years, the country's potential has changed. GDP per capita in 2023 reached about 4,282 USD. The size of the economy in 2023 is about 430 billion USD, nearly 3 times higher than in 2010; public debt is low, only about 37% of GDP. "The scale of our country's GDP is now completely different, the potential of the economy is completely different. Hopefully, the basis for capital sources, financial security... to invest in the project will convince the National Assembly," Mr. Phuc shared.
The pre-feasibility study report for the North-South high-speed railway project is being prepared by the Ministry of Transport. The consultant for the report is the TEDI - TRICC - TEDIS consortium. According to this report, the project is designed with a double track, 1,435mm gauge, electrification, a design speed of 350 km/h, with priority given to passenger transport and the ability to transport goods and serve national defense when necessary. The total estimated investment is 67.34 billion USD.
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