Vietnam Railway – Need to have a basic investment policy for the infrastructure system

This is an opinion given at the seminarChallenges and opportunities for the development of Vietnam’s railway industry ”organized by the Government Portal on March 25, 2021.

The railway industry struggled in tight clothing

Vietnam’s railway system is outdated and must be renovated and built for the country’s development. “The Ministry of Transport must feel impatient, in order to promote the railway revolution”, this was emphasized by Prime Minister Nguyen Xuan Phuc when meeting on the Vietnam Railway Transport Development Strategy to 2020, with a vision to year 2050.

TblackmailChallenges and opportunities for the development of Vietnam’s railway industry ”dated 25/3/2021

According to Mr. Vu Anh Minh – Chairman of the Board of Members of Vietnam Railway Corporation, the Vietnam railway system, which has been built for 140 years, has become old and too out of date, and is not regularly maintained. The biggest disadvantage of the current railway industry is the single track gauge. The capacity of single track through the day and night is only 21 pairs of trains.

The quality of the railway in terms of infrastructure deteriorates very seriously, unable to meet the socio-economic development in general and the development of transportation modes in particular to meet the needs of freight transport as well as passenger. In the past years, we have not built new lines nor renovated, upgraded, but only maintained and maintained to ensure safe operation of the annual train operation and such funding is also in short supply.

From the economic and financial perspective, Mr. Dang Quyet Tien – Director of the Department of Corporate Finance (Ministry of Finance) said that, with a 140-year development industry, especially in 30 years of innovation, investment for the railway industry has not been properly grounded, and has innovative breakthroughs to suit the development of the economy, especially the developing economy in the direction of industrialization. Thus, in relative comparison with other modes of transport, especially compared to road, the railway sector has lagged far behind.

Analyzing in terms of traffic safety, Mr. Phan Le Binh, an expert in infrastructure engineering, said that railway is a much safer means of transport than road. However, this has not been fully taken into account in planning calculations, or comparisons of economic benefits brought about by railroads, leaving the railroads underinvestment and creation to date. the situation is extremely backward compared to the road.

Mr. Vu Anh Minh said that railway has 3 important factors. One is the capacity of the quality of the infrastructure, the second is the quality of the means of transport, the third is the quality of service. The current core weakness of the railway industry is the infrastructure capacity and the quality of the infrastructure.

For other modes of transport, the increase in vehicles will put pressure on the development of infrastructure, such as with roads, and the increase in the number of vehicles will widen the road. But for the railway, it is not possible to increase the means of transport to create pressure and promote the development of infrastructure. The characteristic of the railway industry is that any technological infrastructure is the means of that technology.

On the whole railway line, there are 5,726 level crossings, of which there are 1,519 main crossroads, the rest are self-opening paths. Railways are the priority, but vehicles passing through unobserved aisles can easily lead to accidents. On the whole route, there are over 14,000 points of violation of the railway traffic safety corridor. In the past, in the railway construction solution, with low cargo capacity, single track and very low speed of train operation were made. Besides, there are over 1,000 curves with curvature of less than 300 m. These are the infrastructure bottlenecks.

The entire current infrastructure of the railway industry is old, out of date, and the annual maintenance and maintenance is only 40%, which means it does not guarantee the state to operate in the best normal way. In the infrastructure of the railway sector, there is also station and yard infrastructure. Terminal and airport infrastructure is currently owned by the State, it is necessary to improve the quality of terminal and airport infrastructure. If the airport is not improved, there will be no modern handling facilities, the ship will turn into a warehouse, handling costs will be large, logistics costs will increase.

There should be a policy of capital investment for the railway infrastructure system

Compared to other transportation sectors, such as aviation, road, railway is one of the underdeveloped industries, perhaps because of the concern of all levels and sectors to the railway industry is not satisfactory.

According to Mr. Dang Quyet Tien, if a country cannot exploit railway transport infrastructure effectively, the country’s development, especially the development of heavy industry and other industrial development, will not be effective. . At present, road transport is at saturation point, there must be a railway to ensure competitiveness of the economy. Therefore, it is necessary to have a radical strategy and to have a proper investment, allocate resources, and mobilize resources to develop railway infrastructure.

Mr. Phan Le Binh said that the construction of railway is different from the road. Roads only need to build 20 km and 30 km lines to put into use, but with the railway, it is necessary to have 100 km and 150 km long lines to make sense. That requires a huge investment resource from the State.

With the very strong and stable development of Vietnam over the past few years (by 2020, Vietnam will reach the top 40 in the world GDP scale), this is the time to make investment decisions for the railway industry – a delivery industry. Information is extremely important to the development of the country – Mr. Phan Le Binh emphasized.

According to Mr. Vu Anh Minh, during the 35 years of Doi Moi, Vietnam has focused on developing road, air and maritime to solve the problem of import and export of goods. Up to now, these modes of transport have all developed and created an attraction for other economic sectors to participate. It is time for us to reduce State investment in those modes of transport for other economic sectors to participate and the State needs to allocate investment capital for railway infrastructure. Because for the railway, both the railway structure of the train train and the station and airport are all owned by the State. Therefore, the State needs to invest in upgrading the railway infrastructure.

Mr. Le Hong said that, through monitoring the period 2015-2020, investment in 5 transport sectors, the railway is only granted 4%. Recently, the Government has invested in the railway industry about 7,000 billion VND.

Currently, the railway industry and state railway enterprises hold 100% of the capital. Currently, Railway Corporation is working to provide public service products and services. Therefore, we must clearly define which infrastructure of the State, the State must have a policy of capital investment, tax policies, and land use fees will be exempted. Which one is left of the business to assign the enterprise to autonomy and exploit.

In the planning, the State needs to associate the planning of the railway industry with the planning of roads and the planning of seaports and industrial zones, to ensure connectivity and promote the infrastructure. At present, large industrial zones, big seaports, and weak railway connectivity lead us to use roads. But running by road, container costs are very high, in addition, safety is not good, infrastructure is always degraded. The advantage of the railway is to ensure the large and long-distance transport of goods, especially the issue of people.

According to Mr. Dang Quyet Tien, when building a traffic plan, it is necessary to do the overall transportation system, including the railway traffic network and include all branch roads to develop to industrial parks and seaports. If there are densely populated areas, there will be enough rear areas for the railway to be fully exploited. We have a very painful lesson of cutting off the railroad a lot, because at that time there was only 30 million tons of goods transported through it, which after a while now it is transporting 600 million tons. When it is needed, it will be removed again, then how can we be able to do it again after urbanization.

We may be repeating this lesson, because some localities are proposing to move the station out of the city. Developed countries only add urban gas to facilitate travel to the core zone. We relocate the garage, maybe today the capacity is low, but at the current rate of growth it will increase. We cannot only see the benefits of converting land at a time, without seeing the benefits of the distant future.

We need to learn from developed countries. Where must we put the railway in the modes of transportation, where in the socio-economic development to make the right decision, in accordance with the law as well as the experience. international. If not, it is easy to repeat the lessons that we have encountered – shared Mr. Dang Quyet Tien.

Towards the development of the modern railway industry

Mr. Phan Le Binh pointed out, one of the extremely big limitations for the Vietnamese railway industry is the throughput capacity on the North-South line. Currently, the railway industry only relies on a single line and as such will not be able to develop train operation capacity.

The problem is, if you want to develop the railway, it cannot be more than a double track to run the train. For infrastructure development, if the planning cannot be established and the location of the route on the map is established, then land will be kept for the future. Because the later, the cost of site clearance becomes more difficult, making the feasibility of constructing the double road more and more into a dead end.

It is necessary to clearly define in the development plan to build the double railway system, determine the alignment and keep the land. Maybe not right now we build railroads, double tracks, but 5 years, 10 years, even 20 years, we can do it gradually. But right now, we have to determine the alignment and keep the land for railway development – Mr. Phan Le Binh emphasized.

In fact, while other types of air transport, maritime are assigned infrastructure assets to businesses for exploitation, business, and railways are not allowed. The station is the destination, the departure point, here can be upgraded into amusement parks, supermarkets, services … but completely not just transfer passengers. Therefore, many countries have invested in stations with central and local budgets, including allowing businesses and other economic sectors to participate.

According to experts, if the station only serves passengers, it will never be able to recover capital and it is difficult to develop. For many years, the half-hearted investment and not fully exploiting the advantages of the station has reduced efficiency and wasted resources, while the railway is lacking investment capital.

Like other modes of transport, if the aviation sector charges fees to take off and land at airports, it will never be able to build a terminal, if the seaport charges the channels, the port will never be built. whose value added is the increase around new transport that creates a large surplus for station construction.

Therefore, for the railway industry, it is recommended that the State have a re-pricing mechanism to assign businesses and enterprises to manage, operate, exploit and invest in accordance with local planning and industry planning.

The added value in railway stations is enormous. In addition to providing services for passengers, they also provide all services to surrounding residents. Currently, the Law is open for the railway industry to implement. Vietnam Railway Corporation has submitted the project and the Prime Minister is assigning the Ministry of Transport to collect comments from ministries to submit to the Prime Minister and agree on the direction of assigning stations to the Railway Corporation. management to maximize the capacity of the infrastructure that the State has invested.

In fact, of the 297 railway stations of the railway sector, only about 10 are of attractive value. Exploiting the surplus value from these stations will give the railway sector conditions to upgrade other stations in the whole line.

By 2030, when the surplus value of the station areas increases, the Corporation will use the capital to maintain and upgrade that infrastructure instead of the State having to spend. This is the only solution, the most breakthrough and also the greatest hope of the railway industry to promote the development of the railway industry.

According to experts, the efficiency of investment in railway can not only be assessed by revenue from transport business, but it also affects the economic development of the region, connecting modes of transport. of a country, helping to reduce logistics costs, increasing the competitiveness of the economy. Therefore, it is necessary to pay attention to the participation of both the political system and the whole society in the investment, for the railway to develop commensurate with its position.

Le Kim Lien


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