Investors warned of outdated railway technology
01-06-2015 13:55:10+07:00
Investors warned of outdated railway technology
Current railway technology in Vietnam is out of date, and investors would likely fail if they poured money into railway projects, said Tran Dinh Ba, a respected civil engineer.
A number of investors have expressed their intention to invest in railway projects, as the Ministry of Transport is now calling for public investment.Railways are an important link of the transport system, the backbone route of the country, but they are a heavy burden on the nation.
Ba said the Vietnam Railway Corporation’s (VRC) ambitious plan to solidify the 1-meter-gauge rail to obtain a higher speed of 120 kilometers per hour has failed. It would shorten the north-south journey to 20 hours.
VRC has poured billions of dollars into the project over the last 10 years, but nothing has been gained, according to Ba. Trains still run at the speed of 50 kilometers per hour, and it takes at least 30 hours to travel from Hanoi to HCM City.
“You will not be foolish to invest in the railway sector if you anticipate that you will have to spend VND2 trillion while you can expect revenue of VND400 billion,” Ba said.
“The investors should be informed that the railway sector is now just like a rotten train,” Ba said. “If they inject money into it, they will certainly suffer failure.”
Agreeing with Ba, Dr of economics, Dang Dinh Dao, said the railway “is too old and backward”.
“The 1-meter-gauge rails account for 83 percent of the rail network, therefore, trains cannot speed up, causing a big waste of society’s assets and people’s time,” Dao explained.
Basic services still have not been provided even at big railway stations. At the Hanoi station, passengers cannot find luggage trolleys to use.
“Overnight luggage service is not available at stations. Meanwhile, the north-south train ticket is not priced low,” he noted.
Dao agrees with the Ministry of Transport’s idea that the State should call for public investment in the railway sector to upgrade the outdated infrastructure system.
However, he thinks the State should keep a close eye over the investments instead of relying on private investors.
“The most important factor that determines the success of the plan to call for public investment for railway projects is transparency,” he said, adding that if the process cannot be implemented in a transparent way, the “ask-and-grant” scheme and authoritarian behavior will return.
Many big tycoons have expressed their willingness to invest in railway projects. T&T Group wants to develop the Hanoi railway station, while Vingroup has expressed interest in Hanoi, Da Nang and Saigon stations.
