Mega high-speed rail project gathers momentum

November 23, 2024 - 08:54
The ruling Party and Government have stated their commitment to prioritising Vietnamese enterprises in the execution of the project.
An artist's impression of the North-South high-speed railway project being on the agenda of the ongoing annual session of the National Assembly.

Vietnamese authorities are pressing ahead with the ambitious North-South high-speed railway project, a landmark endeavour in terms of both scale and required capital. Once completed, it is expected to transform the nation’s transport infrastructure, boost economic growth, and enhance connectivity between key regions.

The ruling Party and Government have stated their commitment to prioritising Vietnamese enterprises in the execution of the project. Leading domestic construction firms, while cautious, have expressed confidence in their capacity to deliver, aiming to reduce reliance on foreign contractors.

Vũ Hồng Phương, director of the Railway Project Management Unit under the Ministry of Transport, described the railway as a "particularly significant project" that has been under consideration for over 18 years.

In 2010, the Government submitted the project to the National Assembly for review, but it was rejected due to concerns about the country’s resources, industrial capacity, and construction expertise in light of the project’s scale.

Following a Party Politburo directive, the transport ministry conducted study trips to six countries with world-class high-speed rail systems, including Japan, France and China.

These trips informed a pre-feasibility report, which was approved by the Communist Party Central Committee earlier this year. The report is now under discussion at the ongoing National Assembly session, where it has drawn significant interest from lawmakers and the public.

The proposed double-track standard gauge (1,435mm) railway spans 1,541km from Ngọc Hồi Station in Hà Nội to Thủ Thiêm Station in HCM City. Designed for electrification, the line will support speeds of 350kph and a load capacity of 22.5 tonnes per axle. It will include 23 passenger stations and five freight stations, ensuring the system caters to both passenger and cargo transport.

The Party Central Committee has stressed the great importance of the project, setting clear objectives: securing parliamentary approval in 2024, beginning project preparations in 2025, and completing the basic infrastructure by 2035.

Construction is slated to start in 2027, beginning with the Hà Nội-Vinh and Nha Trang-HCM City sections. These two busiest segments are expected to deliver immediate benefits upon completion.

The project’s total estimated cost is US$67.34 billion, with approximately $33 billion allocated for infrastructure. Other components include control systems, power supply, and rolling stock.

Prioritising domestic enterprises

Director Phương highlighted that the project would offer a significant opportunity for Vietnamese businesses, provided the country maintains financial independence, and avoids over-reliance on foreign sources. The Party and Government have been consistent in prioritising domestic enterprises across all areas, including consulting, construction, and material production.

To address concerns from local companies, the project proposes an EPC (Engineering, Procurement and Construction) model. Once approved by the National Assembly, the transport ministry will prepare a feasibility report outlining how the project will be divided into sub-projects and EPC packages. Criteria for participation and bidding procedures will ensure transparency and competition.

Phương said that contractor selection—whether through tendering or direct appointments—would be carefully considered in subsequent phases to maintain fairness and efficiency. Clear regulations and strict oversight would be implemented to avoid delays or inefficiencies during the construction process.

Special policies, such as workforce training programmes and collaborations with international institutions, had been proposed to bolster domestic capacity.

A direct contracting mechanism was planned for land clearance and resettlement to expedite these processes. Lessons had also been drawn from previous large-scale projects, including the North-South Expressway, to improve material sourcing policies and avoid unnecessary reliance on imported materials.

Confidence in local capabilities

Nguyễn Quốc Hiệp, chairman of the Việt Nam Construction Contractors Association, said that Vietnamese contractors had made significant strides in recent years and were capable of handling major infrastructure projects.

He pointed to the successful completion of large bridges, tunnels, and expressways as evidence of domestic expertise. However, he acknowledged that the precision required for a 350kph railway would demand advanced technology and expertise.

Hiệp urged unity among contractors, calling on them to pool resources and share knowledge. He also pointed out that current bidding laws, which require prior experience with projects of similar scale, may pose challenges for Vietnamese firms.

Revising these regulations, he said, would provide opportunities for capable domestic enterprises to take on more responsibility in this landmark project.

Army Colonel Nguyễn Tuấn Anh, deputy general director of Trường Sơn Construction Corporation, emphasised the importance of collaboration, saying that competition among domestic firms had recently given way to improved cooperation.

He expressed confidence that, with policy support from the Party and Government, Vietnamese contractors could deliver on their responsibilities.

Nguyễn Đức Kiên, former head of economic consultancy to the Prime Minister, stressed the need for businesses to enhance technological investments and partnerships for mutual growth. He highlighted the importance of technological transfers, saying this was key to mastering new construction methods and meeting international standards.

Labour and training challenges

The project is expected to require around 240,000 skilled workers for infrastructure construction, 13,800 operational staff, and 2,000 consultants.

Mai Thanh Phương, chairman of the Railway Construction Corporation, said that immediate labour training might not be feasible during the initial preparation phase. He suggested importing skilled workers and engineers as a short-term solution, with long-term training strategies to follow.

Nguyễn Quang Huy, CEO of Đèo Cả Group, said his company had partnered with domestic universities to establish a research and training institute focused on railway and metro construction.

This initiative was expected to prepare a new generation of Vietnamese engineers capable of handling future projects. Huy also called on the Government to issue contractor standards promptly, enabling international collaboration and access to cutting-edge technology.

Army Colonel Phan Phú, chairman of the Ministry of Defence Corporation 319, identified land clearance as a recurring bottleneck in large-scale projects. He proposed initiating land recovery during the planning phase to streamline the process.

Clearer legal frameworks and more effective coordination with local authorities, he said, would ensure smoother resettlement and compensation efforts.

The project’s huge capital requirements present challenges for domestic enterprises.

Trần Cao Sơn, deputy general director of Central Construction Group, raised concerns about access to bank loans and other financial incentives. He questioned whether businesses would have sufficient financial support to mobilise the required resources and called for proper policies to mitigate risks for contractors.

Sơn also emphasised the importance of careful planning to avoid cost overruns and delays. Transparent financial oversight and flexible policies would be essential for ensuring that Vietnamese businesses could effectively contribute to the project, he said.

Despite these challenges, optimism remains high. Vietnamese enterprises have demonstrated significant growth and adaptability in recent years, particularly in infrastructure development.

The North-South high-speed railway project is not only a major economic undertaking but also a symbol of national progress. Its success will depend on the collective efforts of the Government, domestic businesses, and experts working together to overcome obstacles and seize opportunities. VNS

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