Deputy Prime Minister Trinh Dinh Dung said that the Vietnamese railway sector needs reforms to deal with the many problems it faces.
On December 22, Deputy Prime Minister Dung visited Hanoi and Giap Bat stations and worked with Vietnam Railways on the sector’s development strategy.
According to the Deputy PM, the railway sector is facing many difficulties, including outdated infrastructure. The railway network has not yet been linked to new economic zones and industrial parks, particularly sea ports. Railway projects have to date attracted only a modest private sector investment.
At the meeting with the Deputy PM, Deputy Minister of Transport Nguyen Ngoc Dong, said Vietnam had 3,143km of railways, but large parts of this were very out of date.
Some railway routes, including Yen Vien-Pha Lai-Ha Long-Cai Lan, have been delayed due to the capital shortfalls. In many places, railway safety corridors have been seriously encroached upon by local residents.
Deputy Prime Minister Trinh Dinh Dung (second from the left) inspects Hanoi Station
“Only 40% out of the total capital of between VND1.7 trillion (USD80.9 million) and VND2 trillion has been used to repair and maintain railways every year. Actual railway investment accounts for only 2-3% of the transport sector’s total investment,” Dong added.
Dong also mentioned the low competitiveness of the railway sector compared with road and aviation transport services. In 1995, the railway sector held up to 11.7% in the country’s total transport of passengers and 7.9% in cargo transport; and the rate fell to 3.2% and 1.9% respectively in 2014.
Vu Ta Tung, Director of Vietnam Railways, said that Vietnam needs around USD1.8 billion to upgrade the current North-South railway route.
Deputy PM Trinh Dinh Dung urged the railway sector to raise the speed of the north-south railway route to 90km/h; upgrade railway equipment, particularly increase the connection between railway routes and economic zones and seaports.
Vietnam Railways Corporation was also required to complete a report on a hi-speed north-south railway to seek investors to submit to the National Assembly.