The pre-feasibility study of the North-South High-Speed Railway project was submitted to the prime minister last week by Minister of Transportation Nguyen Van The through Report No.1281/TTr-BGTVT.
The North-South High-Speed Railway’s pre-feasibility study was conducted by a domestic consulting partnership lead by Transport Engineering Design Inc. (TEDI) with the support of a foreign consultant team including Padeco-Fukken-Yachio-Ernst & Young since November 2017.
According to the consultancy unit, north-south transport routes currently serve 49 percent of the population who account for 61 percent of the country’s GDP. Therefore, the North-South High-Speed Railway will help to reduce overload and improve transport quality.
Specifically, until 2030, the demand for inter-provincial passenger transport in the North-South corridor will reach 1.97 million passengers per day, accounting for 71 percent of the total passenger transport demand across the country. Meanwhile, the capacity of the infrastructure on the North-South corridor only reached 1.77 million passengers (a maximum of 162,000 passengers per day).
With this huge gap in supply and demand, in 10 years, the North-South route will be overloaded by nearly 194,000 passengers a day. The consultancy group affirmed that only investing in planning and upgrading the existing railway will not be enough.
“Let us imagine that currently, people may need half a day to drive by car from Hanoi to Vinh (Nghe An province), but it will only take two hours to travel by high-speed rail. This change will impact the population distribution along the high-speed railway route,” said Dr. Bui Xuan Phong, chairman of the Vietnam Railway and Economic Association under the Vietnam Union of Science and Technology Associations (VUSTA).
While conducting the pre-feasibility study report, the consultancy group researched three options to develop the railway.
The first option is to upgrade and optimize the capacity of the current monorail (50 trains per day, accommodating a top speed of 70 kilometers per hour). The second option is to upgrade the current monorail (1,000mm) to a bigger gauge (1,435mm). The third option is to optimize the current single-gauge railway and build a new route for private exploitation that can accommodate a maximum speed of 320 kilometers per hour.
The consultancy expressed the opinion that the upgrading or optimization of the current single-gauge railway can only meet the demand in 2020-2030. In addition, construction and upgrading would take 23 years and would affect regular train schedules.
Additionally, exploiting the passenger and cargo trains on the same line would cause further difficulties as these carriages travel at different speeds.
Therefore, the consultancy unit suggested the third option.
In the pre-feasibility study, the consultancy group proposed selecting a high-speed railway using multiple unit technologies and radio control.
“The use of the above technology ensures synchronicity, access to advanced technologies, convenient technology transfer, and minimizes investment costs for infrastructure construction,” said Nguyen Ngoc Dong, Deputy Minister of Transportation.
The preliminary calculations of the consultancy unit show that the total investment of the North-South High-Speed Railway project is about VND1.34 quadrillion ($58.26 billion). With such a huge investment, to reduce the pressure on the national budget as well as ensure effective investment, there is a horizontal and a vertical investment plan.
Specifically, the horizontal investment plan is to complete investment and exploit the high-speed railway on each section. Phase 1 (2020-2032) will focus on constructing the Hanoi-Vinh and Ho Chi Minh City-Nha Trang sections. Phase 2 (2032-2050) will construct the section connecting Vinh to Nha Trang to connect the whole route.
Meanwhile, the vertical investment plan is supported by many leading experts in the transportation sector.
The plan is to invest in the complete infrastructure of the entire route following high-speed railway standards and invest in equipment, transport means, and exploitation methods. Phase 1 will construct the entire Hanoi-Ho Chi Minh City route, ensuring the design speed of 350 kilometers per hour but only using diesel trains to travel at a speed of 150 kilometers per hour. Phase 2 will electrify and upgrade the information signal system and purchase high-speed trains to replace diesel trains for exploitation on the whole route.
However, after looking into the ability to meet the transportation standards as well as mobilizing the investment capital, the consultancy unit suggested the horizontal investment plan. The Ministry of Transport also agreed to select this option in its internal evaluation report and Report No.1281/TTr-BGTVT.
According to the consultancy unit, in case 100 percent of the capital is sourced domestically, the annual investment in Phase 1 will account for a maximum of 0.7 percent of the GDP and Phase 2 will account for 0.55 percent. In case borrowing 100 percent of the capital, with the current public debt situation, the government will not exceed the public debt ceiling of 65 percent of the GDP in either investment periods.
In order to ensure financial feasibility, the consultancy unit proposes applying the public-private partnership (PPP) model under which the state will provide about 80 percent of the total investment, while investors will buy trains and equipment with a rate of about 20 percent as well as take responsibility for operating, maintaining, and paying infrastructure rental fees.
[content_block id=4039 slug=posts-footer]
