Vietnam intends to allocate $8.37 billion towards the construction of a rail link to China.
Vietnam’s National Assembly has approved the construction of the Lao Cai-Hanoi-Hai Phong railway, a significant rail route to the Chinese border. With an estimated cost of $8.37 billion (or $15.96 million per kilometre), the project aims to improve transportation efficiency, lower logistics costs, and support long-term economic growth in the zone.
Project Overview
The 391-km railway will connect the border crossing point in Lao Cai Province to the port city of Hai Phong, with an additional 27.9 km of branch lines. It will traverse nine localities, including Hanoi and the provinces of Yen Bai, Phu Tho, Vinh Phuc, Bac Ninh, Hung Yen, and Hai Duong.
The line will be a single-track railway with a 1,435 mm gauge, serving both passenger and freight services. Design speeds are set at:
- 160 kph from Lao Cai to southern Hai Phong.
- 120 kph through Hanoi.
- 80 kph on other sections.
Funding and Completion
Funds for the project will come from the state budget and other legal sources. Relevant agencies will prepare feasibility reports this year, with the project expected to be completed by 2030 at the latest.
The National Assembly has also approved special mechanisms for the project, such as allowing the Prime Minister to issue government bonds to cover shortfalls in the annual investment plan without increasing the state budget deficit.
Special Mechanisms and Prioritization
The project includes several special mechanisms to streamline implementation, including:
- Mineral extraction for construction materials.
- Development in science, technology, and workforce training.
- Industrial growth and technology transfer.
Contractors working on the railway must prioritize domestically produced goods, services, and materials whenever possible.
Regional Context
The cost per kilometer for this project is comparable to other significant rail projects in the region, such as the Vientiane-Boten railway in Laos, which cost $16.77 million per kilometer.
Economic Impact
The Standing Committee of Vietnam’s National Assembly emphasized that the project is expected to meet rising transport demands, reduce logistics costs, and foster sustainable development. It will also strengthen Vietnam’s trade links with China while boosting connectivity across provinces, including Hanoi and Hai Phong, two key economic hubs.
