The $70 Billion High-Speed Rail Opportunity: Unlocking Vietnam’s 7 Key Industries

High-Speed Rail: Seizing Opportunities and Overcoming Challenges

On October 29th, the Government Portal held a seminar on “High-Speed Rail: Seizing Opportunities and Overcoming Challenges” to analyze and clarify issues of public interest related to the project, including funding sources, speed, and economic and social impacts.

Speaking at the seminar, Deputy Minister of Transport, Nguyen Danh Huy, shared that his ministry has been researching high-speed rail for 18 years, and that “this is the appropriate time to build the North-South high-speed rail line to appropriately restructure the transport market share.”

Deputy Minister of Planning and Investment, Tran Quoc Phuong, expressed his agreement with the content shared by Deputy Minister Nguyen Danh Huy regarding the necessity, timing, and maturity of constructing the North-South high-speed rail line, as well as the technical aspects and implementation plan.

Mr. Phuong pointed out that this is the largest project in the history of public investment in Vietnam, with an estimated total cost of nearly $70 billion. This level of investment will impact economic growth throughout the project’s construction. Specifically, a preliminary assessment indicates that investing this amount from now until 2035 will increase GDP by approximately 0.97 percentage points. “This is a significant figure, contributing to the overall growth of the economy,” said the Deputy Minister of Planning and Investment.

Mr. Phuong identified at least seven areas that will benefit from the implementation of the North-South high-speed rail project. Firstly, the project will impact Vietnam’s construction sector within the GDP structure as it is a construction installation.

Secondly, it will affect ancillary industries that serve this project, such as the supply of construction materials, including common materials like sand, gravel, and specialized materials like iron and steel for tracks or other structures.

The third area of impact is the service sectors that will cater to the project, such as finance, banking, and capital mobilization services.

Fourthly, the project will have a positive effect on urban development. The high-speed rail line will feature over 20 stations from North to South, each with attached urban areas. This is a driver for development, as we recognize that urban development is a critical engine for economic and social progress.

Fifth, the project will impact the extraction industries once it becomes operational, particularly in the tourism sector.

Sixth, it will create employment opportunities. This large-scale project will require a significant workforce, generating a substantial number of jobs.

Additionally, Deputy Minister Tran Quoc Phuong highlighted that the project will positively impact the transport sector, contributing to its modernization, and increasing its business volume, productivity, and capacity with a new railway system.

Moreover, once the project is operational, it will enhance the competitiveness of the economy, particularly by reducing logistics costs, which will significantly benefit industries and businesses that utilize the high-speed rail network.

Positive Socio-Economic Impact of High-Speed Rail

During the seminar, in response to a question about the public’s expectations from the nearly $70 billion project, Mr. Tran Quoc Phuong shared that regular passengers are likely eager to experience this mode of transportation. “Currently, to use this type of transport, one has to go abroad, but with this project, people will be able to do so in their own country, which is the dream of many Vietnamese,” he said.

Apart from passengers, Mr. Phuong added that entrepreneurs and business people are also eagerly awaiting the formation of this high-speed rail line as it presents numerous opportunities for them. They will be able to leverage the benefits of this line in various sectors, from production and business to cargo transportation and, especially, the development of urban infrastructure, real estate, and other businesses.

The Deputy Minister of Planning and Investment assessed that “this line will have a positive impact if we do it well and quickly. The investment will directly impact GDP in the initial phase, and the ripple effects will be even more significant later on, possibly surpassing our current calculations.”