- SCMP
HANOI: Tran Thi Minh Ha Vietnam says that it will build a US$67bil high-speed railway from Hanoi to Ho Chi Minh City, in a much-needed boost to infrastructure that is expected to drive growth and enhance its reputation among foreign investors.
The railway, which will stretch more than 1,500 km from the capital in the north to the country’s business hub in the south, will reduce the current journey time by rail from 30 hours to around five.
“The national assembly voted to approve a resolution on investment policies for the high-speed railway project on the North-South axis,” said a statement on Vietnam parliament’s website.
Vietnam’s transport infrastructure is considered relatively weak, with a road network struggling to keep up with demand and an underdeveloped rail system.
The expressway density is one of the lowest in the region, although Vietnam is pushing to expand it, while road transport costs are among the highest.
The country is an increasingly favoured destination for foreign businesses looking for an alternative to China, but low-quality infrastructure is seen as holding back investment.
Dan Martin, International Business Advisor of Dezan Shira & Associates, said the project would “supercharge the Vietnamese economy”.
Making it easier for crucial components to reach manufacturing hubs and expediting the delivery of finished goods, the railway will “boost production, reduce lead times, and solidify Vietnam’s role in global supply chains”, Martin said.
Deputy Minister of Planning and Investment Tran Quoc Phuong earlier called the new line “a breakthrough” in the country’s infrastructure that would boost the country’s gross domestic product by an average of 0.97 percentage points annually.
“It is the wish of the people and the determination of the political system to have an international-standard high-speed railway,” he said prior to the approval. — AFP
