250-kph railway excels bullet train in capital recoupment

The consortium of four companies said in a pre-feasibility report submitted to the Ministry of Transport that although the 250-kph railway costs more to build, it has higher chances of recouping investment thanks to cargo transport, while the 350-kph bullet train woul only serve passengers.

The 250-kph option is set to cost $61.67 billion, compared to the 350 kph’s $58.7 billion price tag, said the consortium, comprising The University of Transport and Communications Consultancy and Construction, Germany-based Evo mc, Ove Arup & Partners Hong Kong, and Hung Phu Trading and Construction Consultant.

But the slower option’s operation cost is 18% lower than that of the faster one. Its energy cost is also 28% lower.

The 250-kph option allows Vietnamese businesses to participate in the construction and help them master railway technology and improve domestic contribution, while the 350-kph plan requires total dependency on foreign technology, the consortium said.

The slower option can fetch a revenue of $11 billion annually, 55% of which would stem from cargo and 39% from passengers.

The faster option, however, can fetch at most $3.77 billion annually as passenger transport will be its only source of revenue.

To have $61.67 billion for the 250-kph railway the consortium anticipated that the government could raise 63% from auctioning 50 land segments along the railway, 21% from public funds and 14.7% from private companies.

The government can prepare for the project from 2023 to 2025 and start building the 1,545-kilometer railway over the following 16 years.

Construction is proposed to be divided into three phases. The first phase, from Ho Chi Minh City’s Thu Thiem to Nha Trang, is set to be completed by 2031; the second phase, from Hanoi to Da Nang, 2038, and the third phase, from Da Nang to Nha Trang, 2041.

The Ministry of Transport is reviewing this and other proposals for the North South railway and will present its final suggestion to the government later.

Since 2019 Vietnamese officials have been reviewing the possibility of building the cross-country railway to boost transportation as roads and airports are increasingly overloaded.

An online survey by VnExpress of over 2,000 Vietnamese readers show that 68% prefer the 250-kph option.