North-south express railway project will not affect national economy, says transport minister

A study on the Hanoi-Ho Chi Minh City express railway project showed that the project’s economic efficiency, while less than perfect, will not affect the national economy, said Transport Minister Ho Nghia Dung on May 20.

Transport Minister Ho Nghia Dung speaks to media about a Hanoi-HCM City express railway project in Hanoi May 20 (Photo: Tuoi Tre)

He told reporters during the National Assembly session, which commenced on May 20 in Hanoi, that considering socio-economic and financial-economic efficiency, investment capital for the project would be returnable.
The project is massive. It would account for 50 percent of the country’s GDP, and is projected to mobilize over US$4 billion every year, with about US$2 billion per year for the first ten years, he added.
Mr. Dung said investment in the transportation sector presently accounts for only seven percent of economy’s total investment, while it is 15 percent in other countries.
If approved, the project would increase the total investment in transport to 15 percent, within the limit set by the Government for the sector, he said.
Replying to a question that the project might cost up to US$100 billion, he said the projected cost might increase by 13 percent. The possibility of the increase is not high. However, the cost might soar due to cost associated with site clearance and resettlement.  
The minister said expanding and upgrading the current railway into the express railway, capable of traveling at speeds of 200 kilometers per hour to transport both cargos and passengers, would be more effective and cost less than the alternative, widening roads to increase transport capacity.
Phung Quoc Hien, chairman of the NA Finance and Budget Committee, said with such a huge project, it will take long time to recover the investment capital in the context of the tight State budget.
Careful calculations are required, not only this project, but also other transport projects, since these types of projects do not refund investment capital immediately, he added.
Mr. Hien said however, at first we have to accept to use the State budget to invest in infrastructure construction, but of course, the national financial security must remain the top priority.
Funds for the project, will eventually come from various sectors of the economy, but in the initial stage, funding from the State budget will stimulate the project, he added. 

By Nhi Ha – Translated by Yen Chuong

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