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Investment opportunities abound in railway infrastructure

The Vietnam Railway Authority (VNRA) submitted a statement on October 18 requesting that the Ministry of Transport (MoT) review the amended Railway Network Plan for the rest of the decade.

The first major highlight of the statement is the recommendation by the VNRA to adjust the length of the North-South high-speed railway from 1,545km to 1,541km.

This adjustment will better align with the National Master Plan and with the recently approved investment policy proposal for the North-South high-speed railway.

The second major highlight is the proposal to move up investment timelines for two railway lines, the Lao Cai - Hanoi - Haiphong line and the Thap Cham - Dalat line. Completion of the two lines is now expected before 2030.

The Lao Cai - Hanoi - Haiphong railway line will primarily serve long-distance passenger transport and goods, with the gauge width allowing it to journey further into China.

Meanwhile, the Thap Cham - Dalat railway line will be restored on its old route, which was decommissioned a long time ago, covering a length of 84km.

The line will complement the development of key tourist destinations along its route, including Dalat city and Phan Rang - Thap Cham city, enticing investment and propelling socioeconomic growth in the provinces of Ninh Thuan and Lam Dong.

Both railway lines are viable for early investment.

The MoT is accelerating the preparation of a pre-feasibility study report for the Lao Cai - Hanoi - Haiphong railway line, spanning approximately 380km with an estimated investment of $11.6 billion.

The investment policy is expected to be finalised in 2025, with project implementation to start before 2030.

Additionally, the MoT is requesting permission to use a grant of approximately $20.8 million from the Chinese government to prepare a feasibility study report for the Lao Cai - Hanoi - Haiphong railway line, paving the way for the project to begin selecting contractors by the second half of 2025.

For the Thap Cham - Dalat line, the MoT and the VNRA have received a public-private partnership investment proposal from Bach Dang Hotel Complex Trading-Service JSC.

The project will receive investment of over $1 billion with a payback period of 30 years, being divided into two parts.

The main component involves restoring the route from Thap Cham Station to Trai Mat Station, covering 76.8km, which includes the restoration and construction of 64 bridges, five tunnels, 11 stations, and the entire upper structure of the railway.

The second component includes upgrading the section from Trai Mat Station to Dalat Station, currently in operation, a 6.7km stretch involving the preservation of both stations.

According to Tran Chung, former director of the State Authority for Construction Quality Inspection, "If these two railway projects proceed as planned, they will create a significant infrastructure investment market for domestic railway construction and engineering contractors after many years of stagnation."

"Furthermore, these projects will serve as valuable training grounds for infrastructure companies currently specialising in bridge and road construction, allowing them to gain experience in railway projects in preparation for the North-South high-speed railway and urban railway lines in Hanoi and Ho Chi Minh City," Chung added.

The national railway network is expected to encompass 25 lines, spanning 6,354km by 2050. The total funding needed by 2030 is estimated at VND240 trillion ($10 billion), sourced from the state budget, private capital, and other legitimate funds.

Source: Vietnam Investment Review