Brian Jeffrey
High-Speed Rail Project Review by Economic Committee
On the evening of November 4, following a session of the National Assembly (NA), the NA’s Economic Committee met for its 20th session to evaluate the investment proposal concerning the North-South high-speed rail project.
During the discussions, Vice Chairman Nguyen Minh Son highlighted global perspectives, noting that although high-speed rail can enhance economic development, many lines operating at speeds of 320–350 km/h face challenges in being financially sustainable.
While several committee members pointed out that profit is not the top priority due to the project’s strategic importance, they acknowledged that the initiative needs a solid commitment owing to the limited government funds available for major projects.
There was widespread agreement among committee members on the project’s importance, as well as its scale and high-speed design. They underscored the pressing issue of funding and the need to manage public debt carefully. Despite modifications to the original proposal over the years, financial sources remain a significant concern, reminiscent of worries from 14 years ago.
In 2010, the National Assembly faced an unprecedented vote on a $56 billion high-speed railway proposal, which sparked divided opinions: 37% in favor, 41% against, while others abstained. At that time, Vietnam’s GDP was approximately $105 billion, prompting debates about the economy’s capability to support such an investment and the implications of high ticket prices on the public.
Nguyen Van Phuc, the former deputy chair of the NA Economic Committee, recalled that the key issues raised by the assembly were whether the economy could absorb the $56 billion expenditure and if it would provide any substantial benefit to the public.
Under the guidance of NA Chairman Nguyen Phu Trong, the decision was made to delay the project after three rounds of consultations with members and experts, ultimately favoring a cautious, democratic approach that garnered public backing.
Some government members who were involved at the time expressed regret, suggesting that initiating construction in smaller phases, such as the Hanoi–Nghe An or Ho Chi Minh City–Nha Trang segments, might have facilitated easier approval. They speculate that if incremental steps had been adopted, the complete North-South line could have been operational by now.
Over the past 14 years, Vietnam has developed several alternative transport routes, including a 3,000-kilometer coastal road, enhancements to National Highway 1A, a 2,000-kilometer expressway, and the lengthy Ho Chi Minh Highway, demonstrating substantial investment in various infrastructures.
Currently, the high-speed rail proposal enjoys significant political support with a renewed commitment for completion. The Politburo has declared the project crucial due to its economic, political, social, defense, and international integration roles, branding it as a national emblem. The latest plan suggests a public investment model to develop a 350 km/h passenger railway capable of serving defense and emergency logistics as well.
Nonetheless, several vital questions persist: What technology should be adopted? How will the annual funding requirement of $5.6 billion be secured? How can domestic private investment be encouraged in a project heavily reliant on state funding? Additionally, how can operational costs be effectively managed if, similar to other global high-speed rail lines, the service does not turn a profit?
Looking ahead, the focus will shift from whether to advance the project to identifying the most practical and effective pathway forward.
