Vietnam has announced plans to build a $67 billion high-speed railway connecting its capital, Hanoi, with Ho Chi Minh City, the nation’s bustling economic hub. Approved by the National Assembly on Nov 30, 2024, this ambitious project is set to transform the country’s infrastructure, significantly cutting travel times and bolstering Vietnam’s position as a key player in global supply chains.
Spanning over 1,500 kilometers, the high-speed railway will link the north and south of the country, reducing the current 30-hour train journey to just five hours. This massive infrastructure project, which will include 23 stations across 20 cities and provinces, aims to address the country’s inadequate transport system.
Vietnam’s current road and rail networks struggle to meet growing demand, with the nation ranking low in terms of expressway density compared to its regional peers. Additionally, road transport costs remain among the highest in Southeast Asia, which poses challenges for businesses and logistics.
Deputy Minister of Planning and Investment Tran Quoc Phuong hailed the project as “a breakthrough,” expressing optimism about its potential to boost Vietnam’s economy and elevate living standards.
Economic Impact and Strategic Significance
Experts have lauded the high-speed railway’s potential to supercharge Vietnam’s economic growth. Dan Martin, International Business Advisor at Dezan Shira & Associates, noted that the project would enhance the country’s manufacturing and logistics sectors by facilitating faster movement of goods and components.
The railway is expected to:
- Improve connectivity between key regions.
- Reduce lead times in manufacturing.
- Strengthen Vietnam’s position in global supply chains.
Martin described the railway as a transformative step, saying, “It will solidify Vietnam’s role as a crucial player in Southeast Asia’s rapidly developing high-speed rail network.”
The railway is also projected to boost Vietnam’s GDP by an average of 0.97 percentage points annually, according to government estimates. This significant economic impact underscores the project’s importance in driving national development and attracting foreign investment.
Addressing Previous Concerns
The high-speed railway project has faced hurdles in the past. In 2010, the National Assembly rejected an earlier proposal for a similar project, then estimated to cost $56 billion, due to concerns over affordability.
However, the economic and geopolitical landscape has since evolved. Southeast Asia has seen growing momentum for high-speed rail, with countries like Indonesia and Laos completing their own rail lines in recent years. These developments have encouraged Vietnam to revisit the idea, emphasizing the need for modern infrastructure to sustain its rapid growth.
Enhanced Connectivity for Citizens
For Vietnamese citizens, the high-speed railway promises greater convenience and travel options. The project aims to create a faster, more reliable mode of transport for both long-distance and regional travel.
University student Pham Dang Quang, speaking aboard a train from Hanoi to Hai Phong, expressed excitement about the railway. “It will be amazing to travel from Hanoi to Ho Chi Minh City in the morning and return the same evening,” he said.
The railway is also expected to enhance regional integration within Vietnam, connecting urban centers with rural areas and boosting local economies.
While the project’s potential benefits are immense, Vietnam’s track record with major infrastructure projects raises concerns about delays and cost overruns. The high-speed railway is scheduled for an eight-year construction period, beginning in 2027 and aiming for completion by 2035.
However, past projects have faced significant setbacks. Hanoi’s second metro line, for example, opened this year after nearly a decade of delays, while Ho Chi Minh City’s first metro route, initially set to launch in 2018, remains incomplete.
Additionally, Vietnam ranks 52nd out of 185 economies on the Global Quality Infrastructure Index 2023, trailing several ASEAN countries. This ranking highlights the need for improved project management and execution to ensure the railway’s timely completion.
Despite the challenges, the high-speed railway represents a bold vision for Vietnam’s future. By addressing critical infrastructure gaps, the project will create new opportunities for economic growth, strengthen Vietnam’s appeal to foreign investors, and improve the quality of life for its citizens.
As Southeast Asia embraces high-speed rail as a cornerstone of regional development, Vietnam’s $67 billion investment signals its ambition to lead in the race for modernization. The next decade will determine whether this transformative project can fulfill its promise and propel Vietnam toward a more connected and prosperous future.
