THE prime minister of Vietnam, Mr Nguyen Tan Dung's, decision on February 10 to approve the country's Railway Development Strategy until 2020 and vision to 2050, may prove to be the watershed moment for the development of railway infrastructure in the Southeast Asian country.

For decades Vietnam has suffered from a lack of funding for its rail network. But with average annual GDP growth of 7% over the past 10 years and its population now hitting more than 90 million, the world's 14th largest, the government regards the sustainable development of a transport system, including improving and expanding its existing railway network, as a high priority to boost socio-economic growth.

Hanoi Line 2Specifically the strategy focuses on upgrading the country's existing 2237km metre-gauge network, including the 1726km single-track main line between Hanoi and Ho Chi Minh City, up to 2020. In November 2014, Vietnam Railway Administration (VNR) submitted a detailed plan to modernise the line to the Ministry of Transport, which is in accordance with the strategy, and is currently awaiting government approval. The plan calls for investments totalling $US 8.9-10.2bn, which will help to increase speeds to 80-90km/h for passenger services, and 50-60km/h for freight, by 2020. It proposes upgrading certain sections on the line, constructing the Khe Net and Hai Van tunnels, and reinforcing weak bridges. It also foresees the procurement of new rolling stock and equipment that will boost capacity on the route.

The government is also set to commence a study into the long-term goal of constructing a new 1435mm-gauge north-south line from Hanoi to Ho Chi Minh City, which will accommodate speeds of 160-200km/h upon its completion in 2030, with a view to increasing line speeds to more than 350km/h after 2050.

The new high-speed proposal follows a similar plan that was rejected by the National Assembly of Vietnam in 2010 due to the huge investment cost of around $US 56bn, which is equivalent to around 50% of Vietnamese GDP. However, the government is keen to revisit the idea as a means of satisfying future transport demand between the country's southern and northern urban centres. The Ministry of Transport is currently working on a feasibility study which it hopes will answer the National Assembly's concerns and if approved, the Ministry is aiming to start construction in 2020, and begin operations four to five years later.

The strategy also calls for the development of the Tay Nguyen (Central Highlands) line, a link to Cambodia which will form the Vietnamese section of the southern corridor of the trans-Asia line to Europe as well as developing links to major seaports and industrial regions after 2050. And with China recently completing a 142km link from Mengzi to Hekou on the border with Vietnam, which provides a direct link to Kunming, the impetus is there for Vietnam to connect with its northern neighbour and biggest trading partner.

While the strategy takes a long-term view on the development of railway infrastructure in Vietnam, the need for improved urban railways is a far more immediate concern. According to the International Public Transport Association (UITP) and consultant Arthur D Little's Future of Urban Mobility study, Hanoi, which has a population of 7 million, was ranked 83rd out of 84 cities included in the work's urban mobility index due to its high-traffic density. Ho Chi Minh City, Vietnam's southern economic hub with 7.9 million residents, suffers similar problems with a lack of transit options effectively forcing people to battle their way through the congested streets.

The railway strategy prioritises the development and completion of urban railway networks in Hanoi and Ho Chi Minh City, reinforcing the government's master plans for development of urban rail infrastructure which was published for the respective cities in 2011 and 2007. The strategy also calls for mass transit networks in Da Nang and Can Tho but only after the completion of works in Hanoi and Ho Chi Minh City, so it will be a few years before these schemes get off the ground.


Hanoi is aiming to build eight urban railway lines by 2030, with development of four projects underway.

This includes Line 1, which will run north-south, and consists of upgrading a VNR metre-gauge line into an electrified, double-track, elevated railway which supports higher frequency operations and will accommodate both regional and suburban services. VNR is managing the project, which is financed by a loan from the Japanese government following an agreement signed in 2008.

The initial aim was to complete the first 15.36km section of the 38.7km line by 2018. However, this has been thrown into doubt. Construction has yet to start on the line following a bribery scandal involving Japan Transport Consultants (JTC) and VNR which emerged in March 2014 after JTC's president admitted during a Japanese investigation that the company had bribed VNR's officers to speed up the project.

This resulted in a subsequent investigation by the Vietnamese Ministry of Transport which led to the arrest of five high-ranked VNR officers and their prosecution in June. The Japanese government subsequently requested a refund of the disbursed amount in the consulting contract. Responsibility for the project has now been transferred from VNR to the Ministry of Transport's Railway Project Management Unit, and is unlikely to proceed until the refund is settled by the Vietnamese government.

The project to build the first 11.35km underground section of another north-south line, the entirely underground 35.2km Line 2, is also running behind. Hanoi City government agency, Hanoi People's Committee (HPC), is managing the project and Japanese Overseas Development Authority is responsible for construction and basic design and tender documents have been prepared. However, the initial cost estimates of Dong 19.5 trillion ($US 890m) have since been identified as far too low. The Vietnamese National Assembly subsequently initiated a review, hiring a third party consultant to check the revised cost estimate of Dong 51.75bn, an increase of 265%, with government approval of this review now pending, and a revised opening date of 2018 looking increasingly optimistic.

Line 2A is Vietnam's first completely-elevated railway, and construction is underway. However, this project is again suffering from delays. In a meeting held on July 7, the Ministry of Transport confirmed that the opening of the 14km line, which runs from Ha Dong in the southwest to Cat Linh in the city centre, has been pushed back from the end of 2015 to around June 30 2016. One reported cause of the delay is the failure to meet sub-contractor payments of up to Dong 367bn.

The China Railway Group is responsible for construction and a groundbreaking ceremony was held on October 10 2011. Work has since progressed to the point where virtually all of the line's elevated structures are complete with work continuing on finishing stations and installing railway infrastructure. However, construction has been marred by a series of accidents, one of which resulted in the death of a construction worker and damage to vehicles in the site area.

The line will be served by a fleet of 13 four-car trains supplied by Beijing Subway Rolling Stock Equipment Company with Hanoi Metro Company formed in November 2014 to operate and maintain the line.

Loan agreements with the French government agency for development (e110m), the Asian Development Bank ($US 4.2m) and European Investment Bank (e73m) are in place to support the development of the 21km Line 3. HPC is managing the project and a $US 84m contract was awarded to South Korean construction firm Daelim Industrial in April 2014 to build the initial 8.5km elevated section. Work got underway in May that year and is due to finish in late 2016.

This initial phase will link Hanoi's main station in the Hoan Kiem district with Nhón in the west, with eight stations on the elevated section and four in a 4km underground stretch, the contract for which is yet to be awarded. An 8.5km southeast extension is planned in the longer-term, although additional funding is required.

HPC is also set to manage development of Line 5 a 34.5km standard-gauge double-track suburban line to serve the western districts of the city, and in January a draft proposal was submitted to the Ministry of Transport by VNR.

The line would accommodate speeds of 100km/h and link Van Cao in the central district of Ba Dinh with Thach Binh in Thach That, with a journey time of around 30 minutes between the terminus stations. The project has an estimated price tag of Dong 14.9 trillion and will be built in two phases with a target completion date of 2019 and 2024. The Japanese government has also supported a feasibility study to build the line as a public-private partnership (PPP).

Ho Chi Minh City

According to the 2007 transport plan for Ho Chi Minh City, the city aims to build six urban railway lines and three light rail, light metro or monorail lines. The plan was subsequently updated in 2013 to include two additional urban railway lines, Line 3B and Line 4B, taking the total to eight lines for the city, all of which will be managed by Ho Chi Minh City's People's Committee (HCMC-PC).

Japan is funding 88% of the $US 2.5bn project to construct Line 1, a 19.7km line running from Ben Thanh Market, the city's commercial centre, to Suoi Tien in the northeast. Work to construct the 17km elevated section with 11 stations from Ba Son to Suoi Tien commenced in August 2012 following the award of a $US 560m contract to a joint venture of Sumitomo Corporation, Japan, and Cienco 6, Vietnam. On June 4 the first span of the line was erected.

A further Yen 23.7bn ($US 191.9m) contract was awarded to the Shimizu Maeda Joint Operation to construct the 2.6km underground section from Ba Son to Opera in July 2014 and a request for tenders to complete the remaining 2km section from Opera to Ben Thanh Market is set to be launched imminently. Hitachi secured a $US 384m contract to carry out electrical and mechanical works on the line as well as install the track, signalling and telecommunications, fare collection systems and platform screen doors.

Hitachi will also supply the line's fleet of 17 three-car trains. A mock-up of the 110km/h, 1.5kV dc train was put on public display for a month at the future line's depot from March to April this year. The purpose of the display was to gather the opinions of the community before approving the design and starting production at Hiatchi's Kasado plant in Japan.

However, since the start of construction, difficulties with land acquisition procedures have delayed the project, with Sumitomo demanding compensation of Dong 2.5bn per day during one particular dispute at the end of 2014. With the project delayed by a reported 30 months, the city is currently reviewing the schedule, with its plan to start partial services in 2018 and on the complete line in 2020 looking increasingly unrealistic.

Work on Line 2 is similarly facing severe delays, with the Ministry estimating that it is at least two years behind its planned opening date of 2020. Preliminary construction on the 11.3km project began when Hoa Binh Real Estate Construction and Trading broke ground on an office building at the future 25 hectare site of the Tham Luong Depot in January. However, further contracts for line construction have not yet been awarded. A report submitted by the Ministry of Transport to the HCMC People's Committee in September 2014 estimated that the project was running $US 784m over budget due to inflation and the increasing cost of materials following improvements to design, with the cost rising from $US 1.3bn to $US 2.1bn.

The ADB, German Development Bank (KfW) and EIB are providing funding for the line, which will include a 9.3km underground section and run from Ben Thanh Market to Tham Luong Depot with 11 stations. An eastern extension is planned which would take the total length to 19km.

Financing is also in place for the first 8.9km underground phase of Line 5. The ADB is providing $US 500m, EIB e150m, and the Spanish government e200m, with the Vietnamese government meeting the remainder of the costs. The line will run from Sai Gon Bridge to Bay Hien. However, construction is yet to start, placing the target opening date of 2018 in severe doubt.

Prospects for the development of lines 3A, 3B, 4, 4A and 6 in Ho Chi Minh City, for now, remain firmly on the drawing board, and it is the same story for lines 4, 6, 7 and 8 in Hanoi.

Vietnam's efforts to get its railway construction programme up and running are commendable. Yet it clearly has its problems, with delays and some element of scandal seemingly impacting each of the projects now underway.

The government's rather modest goals of increasing rail's share of passenger transport to 1-2% by 2020, and 4-5% by 2050, despite its commitments to building new and improving existing infrastructure, is indicative of these difficulties. For now, it appears that there will be at least a few more twists and turns in the years ahead as deadlines loom and the battle to get these ambitious projects up and running intensifies.