Vietnam approves $8.3 billion railway with funding from China

Vietnam's National Assembly has approved an ambitious $8.3 billion railway project designed to enhance connectivity between Vietnam and China.

A train journey along the Hai Van Pass offers breathtaking views of Vietnam’s coastline, winding through lush mountains and overlooking the South China Sea. Photo: Smoky Shin, Flickr CC BY-SA 2.0

This strategic initiative aims to modernize the country's transportation infrastructure and strengthen economic ties with its northern neighbor.

Funding throug Chinese loans

The approved railway will span approximately 391 kilometers, originating from the Lao Cai border gate in northern Vietnam, passing through the capital city, Hanoi, and terminating at the major seaport city of Haiphong. The project is slated for partial funding through loans from the Chinese government, reflecting a collaborative effort to boost regional connectivity.

Economic implications

By linking key economic regions, the railway is expected to streamline the movement of goods and passengers, thereby stimulating economic growth and facilitating trade. The enhanced infrastructure is anticipated to attract investment, boost export capabilities, and create employment opportunities across the connected provinces.

The Saigon–My Tho railway, opened in 1885, was Vietnam’s first railway line, connecting Saigon to the Mekong Delta. This 1887 illustration from Le Monde Pittoresque et Monumental by Paul Bonnetain showcases the early days of rail transport in colonial Indochina.

Replacing the existing colonial-era tracks

Designed with a standard gauge of 1,435 mm, the railway will accommodate trains traveling at speeds of up to 160 kilometers per hour for both passenger and freight services. This modern system is set to replace the existing colonial-era tracks, which have struggled to meet the demands of contemporary transportation needs. The upgrade promises a more efficient and reliable transit solution, aligning with international standards and significantly reducing travel times.

Strategic context

The approval of this project aligns with Vietnam's broader strategy to enhance its infrastructure and economic integration within the region. In addition to the railway, the National Assembly has set an ambitious GDP growth target of at least 8% for 2025, up from the previous goal of 6.5% to 7.0%. This move reflects the government's determination to accelerate development and improve the nation's economic standing.

Furthermore, this project complements other significant infrastructure endeavors, such as the planned high-speed rail link between Hanoi and Ho Chi Minh City, which aims to commence operations by 2035. Collectively, these initiatives signify Vietnam's proactive approach to modernizing its transportation network and fostering stronger economic ties with neighboring countries.

The newly approved railway project represents a pivotal step in Vietnam's efforts to enhance regional connectivity, stimulate economic growth, and modernize its transportation infrastructure. Through strategic investments and international collaboration, Vietnam is positioning itself as a dynamic hub in Southeast Asia's economic landscape.

Key facts - Railways in Vietnam

Train Street in Hanoi, part of Vietnam's 2,600 km railway network, is a popular attraction and a favorite photo spot as trains pass just inches from homes and cafés. Photo: Rod Waddington, Flickr CC BY 2.0

Vietnam's railway network has a long history dating back to the French colonial era and remains a vital part of the country's transportation system.

Length and main lines

• Total railway length: Approximately 2,600 km.

• Main line: The North–South Railway (Reunification Express) runs 1,726 km from Hanoi to Ho Chi Minh City, the backbone of Vietnam's rail system.

• Other key routes:

  Hanoi–Lao Cai (296 km) – connects to China.

  Hanoi–Hai Phong (102 km) – a crucial link to the port city.

  Hanoi–Dong Dang (163 km) – another connection to China.

  Saigon–Loc Ninh (planned) – a future link to Cambodia.
  

History

• French colonial era: Vietnam's railways were built under French rule, with the first railway (Saigon–My Tho, 71 km) opened in 1885.

• 1902: The Hanoi–Hai Phong line was completed.

• 1936: The North–South Railway was fully completed.

• Vietnam War: Many sections were heavily damaged but were later rebuilt.

• 1976: The Reunification Express was restored and resumed full operations.
  

Current and future developments

• High-speed railway: Plans for a 1,545 km high-speed rail from Hanoi to Ho Chi Minh City are under discussion.

• China connectivity: The newly approved 391 km railway from Lao Cai to Haiphong will enhance trade with China.

• Modernization efforts: Vietnam is upgrading old colonial-era 1,000 mm gauge tracks to standard gauge (1,435 mm) for faster and more efficient service.