The New Signal: On the $1 Billion Railway Line Connecting Hanoi, the Vietnam-China Border, and Northern Vietnam’s Port Cluster

Lao Cai – Hanoi – Hai Phong Railway Receives 4 Billion VND in Support

During the state visit to China on August 19th, General Secretary and President To Lam, together with General Secretary and President of China Xi Jinping, witnessed the signing of 14 cooperation documents between the two countries’ ministries, sectors, and localities. Among these documents was the Certificate of Handover for the Project Results of the Vietnam-funded standard-gauge railway planning for the Lao Cai – Hanoi – Hai Phong route between the Government of the Socialist Republic of Vietnam and the Government of the People’s Republic of China.

Recently, Deputy Prime Minister Tran Luu Quang also signed Decision No. 864/QD-TTg on providing 4 billion VND in support from the central budget reserve for 2024 to the Ministry of Transport to prepare a pre-feasibility study for the Lao Cai – Hanoi – Hai Phong route, as requested by the Ministry of Planning and Investment. The Ministry of Planning and Investment is responsible for the content of the report and proposals, ensuring compliance with regulations.

According to the Ministry of Transport, the investment preparation for this railway route is necessary and urgent. In June 2024, the Ministry of Transport submitted a document to the Prime Minister requesting the allocation of central budget reserve funds for 2024 to prepare for the investment in the Lao Cai – Hanoi – Hai Phong railway to promptly initiate research procedures for the project’s approval.

Earlier, in February 2024, the Government Office issued Document No. 57/TB-VPCP announcing the conclusion of the Standing Government regarding the investment in several national railway routes. The Standing Government requested the Ministry of Transport to coordinate with the Ministry of Foreign Affairs and relevant agencies to promptly work with China to unify the memorandum of understanding, the support and cooperation investment plan for the Lao Cai – Hanoi – Hai Phong railway.

For now, the focus should be on investing in the Lao Cai – Hanoi – Hai Phong route (aiming for construction to commence in 2025), studying the use of preferential foreign loans (clarifying the interest rate, loan value, and loan term) and the issuance of bonds for investment.

What is the Planned Layout of the Lao Cai – Hanoi – Hai Phong Railway?

According to the plan, the Lao Cai – Hanoi – Hai Phong railway will have a standard gauge of 1,435 mm, starting at Lao Cai station and ending at Lach Huyen port in Hai Phong.

The project is approximately 388 km long, with a 5.6 km section connecting the Ha Khau (China) – Lao Cai (Vietnam) railway; it will be built towards the east, passing through eight provinces and cities: Lao Cai, Yen Bai, Phu Tho, Vinh Phuc, Hanoi, Hung Yen, Hai Duong, and Hai Phong. The endpoint will be at Lach Huyen port in Hai Phong.

The route includes 73 large bridges with a total length of over 130 km, 25 tunnels measuring 25 km in length, and 38 stations, including 29 newly constructed stations. The railway is expected to transport both passengers and cargo, with a total investment of around 10-11 billion USD.

The long-term forecast for the route’s cargo capacity is 10 million tons per year, with 15 train pairs operating daily.

Along the route, there will be 41 stations, including five main train assembly stations: Lao Cai, Yen Thuong, Nam Hai Phong, Ha Long, and Cai Lan. There will also be 27 stations for train overtaking; five intermediate stations with passenger and cargo operations concentrated in the provincial centers of Yen Bai, Viet Tri, Vinh Phuc, Lac Dao, and Hai Duong. There are four port stations for cargo handling: Nam Lac Huyen, Nam Do Son, Nam Dinh Vu, and Dinh Vu.

The Role of the Lao Cai – Hanoi – Hai Phong Railway

The Lao Cai – Hanoi – Hai Phong railway brings significant economic, social, and transportation benefits to the region and the country.

Firstly, it connects key economic regions in northern Vietnam, facilitating trade between the provinces of Lao Cai, Hanoi, and Hai Phong. This boosts local economic development, especially cross-border trade with China at Lao Cai.

Additionally, Hai Phong boasts the largest port cluster in northern Vietnam (Lach Huyen and Dinh Vu), from where goods can be transported by sea to various international markets. This railway route enables goods from China or northern border provinces to be swiftly transported to Hai Phong for export, expanding international trade opportunities for both Vietnam and China.

In the future, this railway will help coordinate cargo flows efficiently, preventing congestion at border gates. Goods from China can be transported directly to Hai Phong for export to other countries without going through multiple intermediaries, thus optimizing the export process.

Using railways will also reduce the burden on the road system, especially National Highway 5, easing traffic congestion and reducing road accidents. It will further minimize road transport and maintenance costs.

Railway transportation usually offers lower costs compared to road transport, especially for heavy and bulk cargo. This reduces logistics expenses and enhances the competitiveness of Vietnamese enterprises.

Many agricultural products and consumer goods from Vietnam, such as rice, fruits, seafood, and wooden furniture, are exported to China through the Lao Cai border gate. Railways will help maintain the quality of these time- and temperature-sensitive products during transportation.

Additionally, as the route passes through famous tourist destinations in Lao Cai, Hai Phong, and Hanoi, it will facilitate the movement of domestic and international tourists between these locations, contributing to the tourism development of the provinces it traverses.