On November 30, the National Assembly approved the largest infrastructure project in Vietnam’s history: the US$67 billion, 1,500-kilometer-long high-speed rail (HSR) line connecting Hanoi and Ho Chi Minh City.
Some versions of this hugely ambitious development have been under consideration for years, though it was rejected in the early 2010s due to cost concerns.
Vietnam’s economy has grown dramatically since then, while the limitations of the existing rail network – largely built by the French during the colonial era – are stark. Meanwhile, the air route between Hanoi and HCMC is regularly among the world’s busiest, highlighting travel demand between the two cities.
Once completed, the HSR line will see trains travel up to 350 kph on double-gauge 1,435 mm tracks with 23 passenger stations and five cargo stations. The National Assembly requested that a full feasibility study be completed in 2025, with construction to begin in 2027 and trains to be running along the entire route by 2035.
Previous proposals had two sections – Hanoi to Vinh and HCMC to Nha Trang – operating by 2035, with the remainder completed over the ensuing decade.
While laudably ambitious, the difficulty of completing the entire line by 2035 cannot be overstated. Much smaller projects such as HCMC’s first metro line, which costs less than US$2 billion and covers 20 kilometers, have been plagued by numerous delays—the latest schedule is for the metro line to open on December 22nd.
In domestic media coverage, officials have acknowledged these challenges while projecting confidence and emphasizing the importance of this national-level undertaking.
They have also stressed the need for financial independence. In October, the government proposed using domestic capital to fund the HSR route while avoiding official development assistance in the form of loans.
According to VnExpress International, the annual cost of the project would account for 16.2% of public investment through 2030.
The total estimated cost is $5.9 billion for land clearance and relocation, $33.2 billion for construction, $11 billion for equipment, $800 million for project management, $3.61 billion for construction investments, $900 million for other costs, and $11.85 billion in contingency funding.
To help raise further funding, Prime Minister Pham Minh Chinh proposed issuing government bonds.
Less clear at this stage is where the technology needed to build and operate an HSR will come from. China and Japan, among other countries, have expressed interest in helping to develop the project. Both countries have extensive experience with high-speed rail and already invest heavily in Vietnam, but the government’s reluctance to take on debt is clear. Given public sentiment toward Vietnam’s northern neighbour, the possibility of Chinese involvement raises further political sensitivities.
In any case, the HSR approval has been hailed both domestically and internationally. It will be a transformational project for Vietnam, quickly linking major cities and likely driving investment in currently overlooked areas.
Once completed, trains are expected to take just five hours to run the full route, a journey that currently takes about 30 hours. In addition to relieving pressure on overcrowded airports, this would also provide viable travel alternatives to Vietnam’s expressway network.
It will also greatly improve the country’s regional competitiveness, as Southeast Asia has just one operating HSR line – Indonesia’s China-backed route connecting Jakarta and Bandung. Thailand is currently constructing a line, while Malaysia canceled its planned East Coast Route.
Vietnam’s Ministry of Transport estimates that the construction of the HSR alone will add almost 1% to the annual GDP, with an internal economic rate of return of 12%.
The benefits are clear, though cautious optimism is warranted given the country’s track record on major infrastructure projects. One certainty is that everyone will be closely watching – and eagerly anticipating – Vietnam’s first high-speed trains.
Elsewhere in infrastructure development, work on the first phase of Long Thanh International Airport in Dong Nai Province is progressing well. The first terminal and runway, as well as the air traffic control tower, are shaping up for the US$15.5 billion megaproject.
However, there needs to be clarity over when this may be completed. The state-owned Airports Corporation of Vietnam proposed delaying the opening from late 2025 to late 2026 to build a second runway and clear land for terminals planned in later stages. ACV argues that this would avoid disrupting operations once Long Thanh is open.
The National Assembly approved this delay in its recent session, but a few days later Prime Minister Pham Minh Chinh ordered work to be completed by December 31, 2025 so that the airport could open by February 28, 2026.
In Ho Chi Minh City, Tan Son Nhat’s third terminal is also moving along well and is expected to open next year, bringing relief to the chronically overcrowded facility.
Regarding road networks, as of August, Vietnam had completed about 2,000 kilometres of high-speed expressways nationwide and aims to add another 1,000 kilometres by the end of 2025.
In long-awaited good news for Ho Chi Minh City, the much-delayed Ben Thanh-Suoi Tien metro line is expected to enter operation next week, 22 December 2024. The line spans almost 20 kilometres and features 11 above-ground stations and three underground stations. Built with Japanese technical and financial assistance, this project—the city’s first metro line—ushers in a new era for transportation.
Writing credit Michael Tatarski
