Capital needed from both domestic and foreign businesses
A project to build an express railway from Hanoi to HCM City has been submitted to the National Assembly for consideration. The project has received different comments on the level of investment needed and the project’s feasibility. VOVNews interviewed Minister of Transport Ho Nghia Dung on the issue.
VOVNews: The project to build the Hanoi-HCM City express railway will not be completed until 2035. Many people say it should be done quicker and also be split into several different routes, from Hanoi to Vinh, and from HCM City to Nha Trang. What do you think about such suggestion?
Minister Dung: This is an enormous project, which will play an important role in boosting socio-economic development, so it is difficult to shorten the project’s duration. It is reasonable to carry out the project in line with the economic situation in each locality. We have already divided the whole project up into different phases. There are three ways to divide the project up, with priority given to building the sections from Hanoi to Vinh, and from HCM City to Nha Trang. This should attract more investment capital, which will be allocated equally over different periods of time. It is estimated that the investment needed to build the HCM City-Nha Trang express line will reach US$12 billion, while the construction of the Hanoi-Vinh section will cost up to US$24 billion.
We should give priority to building these two routes because they are used by large numbers of travellers and transport a huge volume of goods.
VOVNews: The project will cost nearly US$56 billion. Apart from the State budget and official development assistance (ODA) sources, how can we raise more capital?
Minister Dung: We will discuss preferential ODA sources carefully with our partners and mobilise other sources of ODA which have higher interest rates, as well as ordinary capital resources from the Asian Development Bank (ADB) and the International Bank for Reconstruction and Development (IBRD). These loans have interest rates that are higher than ODA, but still lower than the normal rates charged by commercial banks.
Minister Ho Nghia Dung
Moreover, we will also need to raise investment capital from both domestic and overseas businesses involved in transport, equipment, construction, site clearance and project research. This will demonstrates an effective relationship between the State, businesses and individuals when carrying out the project.
VOVNews: Apart from the project’s benefits, we still face certain challenges, one of which is relocation. What do you think can be done to ensure that people who are relocated have a good standard of living in their new homes?
Minister Dung: We have to move a lot of people to make sure the project gets off the ground. We have issued policies on compensation and social welfare for those who lived in the designated area.
VOVNews: It is said that the relocation issue should be empowered to local government. However, it is not easy to do this in densely populated cities like Hanoi and Ho Chi Minh City. How would you solve this?
Minister Dung: After the project is approved, the relocation of the people will be carried out by local administration officials who are responsible for surveying the land and assessing the number of people who need relocation. Hanoi and Ho Chi Minh City will need to work with the relevant state agencies and other organizations to make this happen.
VOVNews: This is a big project facing a number of difficulties, especially in terms of management, technology, and capital. Are you confident the project will be a success?
Minister Dung: At the NA seventh session, the government has proposed a plan to build an express railway from Hanoi to Ho Chi Minh City, but will only put the project into action after it is approved by the NA. The Ministry of Transport (MoT) has been assigned to carry out a feasibility study into the project and is looking forward to ideas and suggestions from various partners.
Judging from the MoT’s capacity for risk management, we are sure to find proper solutions to any difficulties that may arise. We are absolutely confident that the project will be a success.
VOVNews: Thank you very much.
The project will be a boost to the country’s business operations between regions and improve the transport network for individual travellers. To go ahead with the project, 4,170ha of land will need to be requisited and 9,500 households need relocating in the first place so that the project can be completed by 2035.
The Hanoi-Ho Chi Minh City express railway project massive and needs a total capital of US$56 billion. It will run as long as 1,570 km across 20 provinces and cities. With a design speed of 300km/h, it will take about five hours and a half to complete the journey from Ho Chi Minh City to Hanoi.