The Future of Travel: Vietnam’s High-Speed Rail Network Set to Revolutionize Transportation with Speeds of 350km/h

The recently approved North-South high-speed rail project, with a speed of 350 km/h, has captured the attention and excitement of the Vietnamese people. This project, which was given the green light by the Central Executive Committee of the Party at the recent 10th Plenum, marks a significant step forward for the country’s transportation infrastructure.

“This is a dream come true, not just for me but for generations to come,” shared Mr. Nguyen Quoc Viet from Thanh Hoa province. The sentiment is shared by many, especially those who long for faster and more comfortable travel options.

For younger passengers like Ms. Nguyen Truc Giang from Binh Dinh province, the prospect of reduced travel time and improved comfort is appealing. “I think young travelers like me would really enjoy the faster option,” she said.

The high-speed rail will not only benefit locals but also enhance the travel experience for international visitors. Mr. Matthias Baunach, a German tourist, remarked, “With Vietnam’s north-to-south expanse, a high-speed train will offer a truly wonderful experience.”

Impact on Tourism and Economic Development

The investment in and operation of the high-speed rail is expected to boost tourism and economic development.

The proposed high-speed rail will significantly reduce travel time between Hanoi and Ho Chi Minh City to just around 5 hours and 30 minutes, compared to the current 34-hour train journey. This is even faster than air travel when considering the time spent on check-in and airport transfers. Some shorter routes may also be quicker than flying.

The rail will transport both passengers and light freight, starting from the Ngoc Hoi station in Hanoi, passing through 20 provinces and cities, and ending at the Thu Thiem station in Ho Chi Minh City. There will be a total of 23 passenger stations and 5 freight stations along the route.

For tourism companies that collaborate with the railway, this high-speed option is a game-changer for attracting customers. Mr. Tien, the owner of a travel company specializing in the Hanoi-Danang route, has long awaited the North-South high-speed rail. In his experience, while trains have improved in recent years in terms of comfort and cleanliness, the outdated infrastructure and single-track system result in a 16-hour journey.

“With the high-speed rail, we can envision a morning in Hanoi for breakfast and coffee, followed by a seafood lunch in Danang and an afternoon dip in My Khe beach,” shared Mr. Nguyen Canh Tien, Deputy Director of Violette Trains Vietnam.

With faster travel times, tourism companies can offer more destinations and experiences within the same tour duration, enhancing the overall appeal for travelers.

Mr. Pham Quang Tung, Director of TSC Travel Company, echoed this sentiment: “Touring won’t be as exhausting or time-consuming. I believe this will create a demand that will boost the industry.”

While the current railway system has made efforts to improve, it is akin to an old, tight-fitting shirt. It’s time for a new fabric to tailor a garment that fits the country’s growth after more than a century. This is where the North-South high-speed rail comes in—a transformative and strategic initiative.

Global Success Stories of High-Speed Rails

The excitement around the North-South high-speed rail is not without reason. Globally, high-speed rails have brought about impressive economic development, and people are eager to reap similar benefits in Vietnam.

From Asia to Europe, high-speed rails have had a positive impact on local economies. For instance, in Japan, the Shinkansen high-speed train has been in operation for 27 years and has become an iconic symbol of the country. The presence of the Shinkansen has led to economic “blooming” in many regions, with new stations and urban areas developing around the route.

The city of Saku in Nagano Prefecture, west of Tokyo, underwent a remarkable transformation after the Shinkansen arrived in 1997. In the following 15 years, the city’s population grew by 7.2%, and tax revenue increased a staggering 123-fold.

In Kagoshima Prefecture, southern Japan, tax revenue increased by an additional $460 million in less than two years after the Shinkansen, and tourist numbers continued to rise by over 20% annually. Nagasaki, another city in southern Japan, also witnessed remarkable development thanks to the high-speed rail.

China currently boasts over 46,000 km of high-speed rail, accounting for more than 70% of the world’s total. This extensive and modern network continues to drive the growth of the world’s second-largest economy.

In South Korea, underground high-speed trains have created 500,000 jobs and generated an estimated direct economic benefit of $56 billion. Additionally, new real estate projects near stations have helped stabilize the housing market, and the dispersal of people from crowded urban areas to the outskirts has helped reduce land prices, making homeownership more accessible to young people.

Indonesia became the first country in Southeast Asia to have a high-speed rail, and in less than a year, the Jakarta-Bandung route has served 4 million passengers. The Indonesian government also shared research showing that the project contributed approximately $5.3 billion to the local economy during its construction and operation, significantly reducing CO2 emissions.

Opportunities for Vietnam’s Railway Industry

The North-South high-speed rail project is expected to boost Vietnam’s GDP by nearly 1% annually compared to no investment.

The North-South high-speed rail project is estimated to cost over $67 billion. However, it is projected to increase Vietnam’s GDP by nearly 1% annually compared to no investment.

During a meeting on May 25 regarding this project, Deputy Prime Minister Tran Hong Ha instructed the Ministry of Transport to propose specific mechanisms and policies for investment allocation, including central and local funds and other legal sources.

Additionally, the Ministry was advised to recommend solutions for decentralization and empowerment of local authorities in preparing the groundwork, constructing technical infrastructure and stations, and considering the involvement of enterprises to mobilize social resources from land funds on both sides of the route, thereby reducing the burden on state funds.

Careful selection of technology and management models is also crucial to building a complete and autonomous railway industry and service.

When presented with an order from a foreign customer, the Gia Lam Locomotive Factory successfully delivered a 5-star passenger train in less than a year. The key to their success lies in their skilled workforce and adaptability to market demands.

By overcoming the two most significant challenges—technology transfer and investment in machinery and equipment—they can position themselves to serve the high-speed rail project. Many of their existing facilities are already compatible with the new train type, such as the standard-gauge tracks and steel beams designed for locomotives and carriages in their production workshops.

“With technology transfer, we will be able to gradually acquire the knowledge and shorten the time to produce some parts and products for high-speed rail,” said Mr. Nguyen Xuan Hung, Head of Planning and Technology at Gia Lam Locomotive Joint Stock Company.

Each train consists of approximately 200,000 components, and the market for high-speed rail equipment and vehicles is already in the tens of billions of dollars.

“With proper training and policies, Vietnamese railways will be able to master the technology, starting with our talented people,” shared Mr. Ngo Cao Van, a railway expert.

Mr. Dang Sy Manh, Chairman of the Members’ Council of Vietnam Railways Corporation, emphasized the importance of gradual technology transfer and the need for favorable policies to develop a robust railway industry: “We must gradually acquire and take over the technology. Additionally, we need to proactively propose preferential policies to form and develop a strong railway industry.”

In 2023, Vietnam’s GDP per capita stood at nearly $4,300. In comparison, Japan started investing in its first high-speed rail when its GDP per capita was only about $250. China and Indonesia made similar moves when their GDP per capita reached over $1,700 and $3,300, respectively.

Lastly, it’s worth noting that our current transport situation is imbalanced, with short-haul flights and long-haul road journeys. The introduction of high-speed rail will address this issue by providing a more suitable option for medium-distance travel.