Nguyen Ngoc Dong, Deputy Minster of Transport, spoke to online news website Viet Nam plus about the need to begin a study on the feasibility of building a North-South express.
Will you explain why the Ministry of Transport decided to restart the study on the construction of the North-South Express Train?
According to the Strategy for Railway Development, which was approved by Prime Minister Nguyen Tan Dung in early 2015, the transport sector will conduct a study regarding the construction of the North-South Express Train before 2020. Under the plan, the express line will be built as a double standard gauge track covering a 1,435 km line.
Prior to the construction of the North-South Express Train, Viet Nam will build the 295 km portion, from Ha Noi to Vinh, and the 362 km portion between HCM City and Nha Trang.
It is expected to be completed between 2020 and 2030. The Ha Noi-Vinh and HCM City portions will allow trains to reach 160-200 km per hour and then will increase to 350 km per hour in the future.
By 2050, construction of the North-South Express Train will be completed throughout the north-south axis. After 2050, the speed will increase to 350 km per hour.
I should say the construction of the North-South Express Train is the largest project ever under taken by the Ministry of Transport. That's why it needs time to study the project thoroughly.
Of course, as part of the strategy we also mention the importance of running the present north-south railway line to a maximum speed of 80-90 km per hour for passenger trains, and 50-60 km for cargo trains. And the North – South Express Train will mainly be used to carry passengers.
So from now till 2020, the ministry will focus on studying various scenarios and develop plans to mobilise capital resources to start to construct the line after 2020. As I mentioned above, our study will first focus on the portions of Vinh-Ha Noi and HCM City-Nha Trang.
Do you think that the future study will take into consideration ideas raised during previous discussions at the National Assembly on June 19, 2010?
In the past, we already had studies performed by KOICA from South Korea, JICA from Japan and the Viet Nam Rail Corporation. And no doubt, to prepare for the study this time, we'll review what is available and what is not available and make the best from them.
This project, I should say, is somehow similar to the construction of the Long Thanh airport. So we have to consider carefully about the investment needed and capital mobilisation methods, particularly the private-public partnership model.
In the previous study (in 2006), it was estimated that the construction of the North-South Express Train would cost about $33 billion. And then in the 2010 study, the projected cost jumped to $56 billion. Do you think the projected cost this time will increase?
It is hard to come up with a precise projected cost in the pre-feasibility study. It is a common practice throughout the world for projected costs to often by based upon similar projects in other countries.
In 2010, the projected cost of $56 billion was based on similar projects built in South Korea and Japan. But our case is different from them, as we cannot manufacture train locomotives, facilities or equipment. So, no doubt, our costs will be higher than theirs. And further more, most of the project's investment comes from ODA or commercial loans.
Does the Ministry of Transport know about the project's pay-back period and whether capital resources will be raised from the state budget, private sectors or direct foreign investment?
Viet Nam is in the process of an international integration, so all investors are welcome, as long as they respect our laws. However, as a signatory to the World Trade Organisation (WTO) and the Asia Pacific Trade Agreement (APTA), we have to abide by these agreements.
As a normal practice, the cost of manufacturing one km of railway line is four times more expensive than that of making one km of road. So it is very difficult to talk about the pay-back period for a railway project, not only for Viet Nam but throughout the world. That's why we will have to think about which sub-projects will seek private investors. In other words, it is the government's responsibility to invest in infrastructure development.
According to a report prepared by JICA, it will take Viet Nam between 25 to 30 years to complete the North-South Express Train, including training staff, raising capital investments, as well as developing management and operation. So if we set the target to have the project completed in 2050, we have to start in 2020. — VNS