The Ultimate Guide to the $8.3 Billion Railway Project: Unveiling the Secrets Behind the Massive China-Connected Venture

According to Directive No. 03 dated February 4, 2025, the Prime Minister requested a focus on finalizing the draft resolution of the National Assembly on policies and investment for the Lao Cai – Hanoi – Hai Phong standard-gauge railway project to be submitted to the 9th extraordinary session of the National Assembly, taking place from February 12-18. The aim is to complete the procedures and commence construction of this 8 billion USD project in 2025.

A study on transport needs along the Lao Cai – Hanoi – Hai Phong economic corridor by 2050 reveals a total demand of approximately 397.1 million tons of cargo and 334.2 million passengers. Of this, the railway transport system is expected to handle around 25.6 million tons of cargo and 18.6 million passengers.

However, the existing 1,000 mm gauge railway has small curve radii, steep gradients, and an average operating speed of just 50 km/h, hindering intermodal transport connections and resulting in low competitiveness. It currently caters to only 4.1 million tons of cargo and 3.8 million passengers, primarily serving short-haul tourists and transporting some industrial goods and raw materials.

The pre-feasibility study report for the Lao Cai – Hanoi – Hai Phong railway line, proposed by a consulting consortium led by the Transport Engineering Design and Construction Joint-Stock Corporation (TEDI), suggests a total length of over 403 km for the project, including a 388 km main line and two branch lines totaling 15 km.

The preliminary total investment for the project is estimated at nearly 195,000 billion VND (over 8 billion USD), passing through nine provinces and cities: Lao Cai, Yen Bai, Phu Tho, Vinh Phuc, Hanoi, Bac Ninh, Hung Yen, Hai Duong, and Hai Phong. The starting point of the route will be at the cross-border connection between the new Lao Cai station and Ha Khau Bac station in China, in Lao Cai city, and the endpoint will be at the Lach Huyen port in Hai Phong.

The railway will have a designed speed of 160 km/h on the main section from Lao Cai station to Lach Huyen port, 80 km/h on the branch lines, and 120 km/h on the section passing through Hanoi and overlapping with the eastern ring railway.

To ensure efficiency, the Management Board plans to divide the investment into two phases. Phase 1, from now until 2030, will involve constructing the entire Lao Cai – Hanoi – Hai Phong route as a single-track line and acquiring land with a complete scope. Phase 2, after 2050, will include completing the construction of the entire route as a double-track line and building the Nam Hai Phong – Nam Dinh Vu branch line.

The entire route is expected to accommodate 16 stations, including 3 train assembly stations (Lao Cai, Yen Thuong, and Nam Hai Phong) and 13 mixed-use stations (Bau Thang, Yen Bai Moi, Phu Tho Moi, Viet Tri Moi, Vinh Phuc, Binh Xuyen, Bac Hong, Dong Anh, Dai Dong, Binh Giang, Nam Hai Duong, Cang Lach Huyen, and Dinh Vu). The distance between stations will be greater than 8 km for single-track operation and more than 15 km for double-track operation. Additionally, 14 technical operation stations will be arranged to facilitate train operations.

A significant turning point for the mechanical industry and the job market

TEDI asserts that, according to the railway network plan, in addition to the Lao Cai – Hanoi – Hai Phong railway project, approximately 1,953 km of new standard-gauge railways need to be constructed in the coming time. This will help establish a stable and long-term market for the implementation of subsequent projects. Thus, along with the high-speed railway project on the North-South axis, the Lao Cai – Hanoi – Hai Phong railway will be a catalyst for the development of the railway industry and its supporting industries.

Notably, for this project, the vehicles and equipment are suitable for technology transfer to Vietnam, investment in machinery and equipment production, and the manufacturing of locomotives and carriages for the national railway system with speeds of less than 200 km/h, as well as the purchase of designs and production for urban railways.

“The Vietnam Railway Corporation will select suitable foreign and domestic partners to execute the project. So far, a memorandum of understanding has been signed with the Dalian Locomotive and Rolling Stock Co., Ltd.,” TEDI representative shared, adding that if the cooperation with China is agreed upon and capital is secured for investing in factories and technology transfer, the Vietnam Railway Corporation can produce locomotives and carriages for the national and urban railway systems and gradually research and produce spare parts for high-speed railways.

Furthermore, the investment in constructing the Lao Cai – Hanoi – Hai Phong railway will generate a construction market worth approximately 4.4 billion USD, providing 90,000 jobs during the construction period and about 2,500 long-term jobs in the operation and exploitation phase. If we consider the entire national and urban railway system, it will create a construction market worth 98.2 billion USD with millions of jobs.