Vietnam needs $1.8 billion for rail upgrade to double speed

Trains on the north-south line are moving at a very slow speed of less than 45 kilometers (28 miles) per hour.

The Vietnamese government has planned to give the north-south rail link a much-needed upgrade to almost double the travel speed to 90 kilometers per hour.

Deputy Prime Minister Trinh Dinh Dung on Thursday said this plan includes modernizing the underlying infrastructure and making state monopoly Vietnam Railways financially efficient.

The company's revenue fell by half last year to VND2.6 trillion ($119 million) due to weakening passenger demand, amid the rise of local airlines and faster buses.

It said the number of passengers who traveled by trains in 2015 was estimated at 11.2 million, compared to the 20.7 million air passengers.

“About $1.8 billion is required to upgrade the railroad infrastructure so that trains can run faster,” said Vu Ta Tung, general director of Vietnam Railways.

The high costs to maintain the old system, ranging from VND1.7-2 trillion ($75-$88 million) a year, are already straining the state budget, which covers about 40 percent of the total.

In October, Dung announced that the Ministry of Transport was also working on a feasibility study for an express line that could allow trains to travel at up to 350 kilometers per hour.

This follows a similar plan that was rejected six years ago by national lawmakers, who said the investment of $56 billion, equivalent to nearly half of Vietnam’s gross domestic product in 2010, was too big. A new cost estimate for the rehashed plan has not been announced.

By VnExpress