Lao Cai - Hanoi - Hai Phong Railway Creates Construction Market Worth $4.4 Billion

The Ministry of Transport has just submitted to the Government a pre-feasibility study report on the Investment Project to build the Lao Cai - Hanoi - Hai Phong railway connecting with China.

The railway line is 403.1 km long, including a 388 km main line and two 15 km branch lines. The project has a total investment of VND194,929 billion (about USD8.027 billion), to be built from 2026 to 2030.

Responding to transportation on the economic corridor Lao Cai - Hanoi - Hai Phong

The Lao Cai - Hanoi - Hai Phong railway connects the Ha Khau - Lao Cai international border gate with the Hai Phong international gateway seaport, passing through 9 localities, accounting for about 20% of the population, 25.4% of GRDP and 25% of industrial zones nationwide.

It is forecasted that by 2050, the total transport demand on this corridor will be 397 million tons of goods and 334 million passengers. To restructure the transport market share and reduce logistics costs, the railway needs to handle about 25.6 million tons of goods and 18.6 million passengers.

However, the existing railway line built during the French period, with a gauge of 1,000 mm and an average operating speed of 50 km/h, can only handle about 4.1 million tons of cargo and 3.8 million passengers, serving short-distance tourists. It is forecasted that even if the existing road, waterway and railway capacity is fully exploited, by 2040 this line will still not be able to meet transportation needs, especially for goods.

Therefore, the new 1,435 mm gauge railway will be safer, occupy less land than the road and be environmentally friendly, meeting the transportation needs on the corridor. After the construction of the new line, import and export goods can be transported by intermodal train all the way to Europe, reducing transportation costs and logistics costs. Investment in the new line also creates a construction market, thereby affecting economic growth.

Creating a construction market worth about 4.4 billion USD

According to calculations by the Ministry of Transport, the construction of the Lao Cai - Hanoi - Hai Phong railway will create a market worth about 4.4 billion USD, estimated to create 90,000 jobs during construction and about 2,500 permanent jobs during operation and exploitation.

Including the national railway system and urban railway, the projects will create a construction market of about 98.2 billion USD and millions of jobs.

According to the railway network planning, in addition to this project, the transport sector needs to build about 1,953 km of new standard railways, creating a stable, long-term market to continue implementing projects in the next phase. Along with the North-South high-speed railway project, this project is a premise for developing the railway industry and supporting industries.

Railway industry development

According to the Ministry of Transport, the train will use technology that ensures synchronization, is advanced, convenient for receiving and transferring, is suitable for operating conditions, and is synchronized with international connecting routes. The Ministry proposes to choose centralized power technology for passenger and freight trains. The information and signal systems are equivalent to those currently used in countries in the region.

World experience shows that industrial development orientation must be based on market size and development level of metallurgy, mechanical engineering and supporting industries.

The Ministry of Transport proposed the development orientation of the railway industry by 2045 to master the domestic construction and assembly industry and gradually localize vehicles for national railways and urban railways; domestically produce and gradually localize hardware and software components for information, signals and power supply systems; master the operation and maintenance work and gradually produce some components and spare parts for high-speed railways.

For the Lao Cai - Hanoi - Hai Phong railway project, vehicles and equipment are suitable types for Vietnam to receive technology transfer, invest in machinery and equipment and produce locomotives and carriages for the national railway with a speed of less than 200 km/h.

Vietnam Railways Corporation (VNR) has selected suitable foreign and domestic partners and signed a memorandum of understanding with Dalian Locomotive and Railway Carriage Company Limited. If the cooperation policy with China is agreed upon, VNR will be provided with capital to invest in a factory and receive technology transfer, which can produce locomotives and cars for national and urban railways; and research to gradually produce spare parts for high-speed railways.

According to the National Master Plan, Vietnam is oriented to develop along 13 economic corridors, of which Lao Cai - Hanoi - Hai Phong has the second largest demand for passenger and cargo transport in the country (after the North - South economic corridor in the East). The Lao Cai - Hanoi - Hai Phong axis is part of the "Two Corridors, One Belt" strategic economic initiative between Vietnam and China.

In economic corridors with high transport demand, railway transport plays an important role due to its advantages of carrying large volumes and low costs. The new railway line will be responsible for transporting and connecting urban centers and large industrial zones in the midlands and mountainous areas of the North, the Red River Delta, and is the shortest railway line for transporting goods from Southwest China to international seaports.