Vietnam's parliament has given the green light to a significant infrastructure project: an $8 billion rail link connecting the port city of Haiphong to Lao Cai, a border city adjacent to China. This ambitious plan aims to enhance connectivity between key manufacturing hubs in Vietnam and China, with the rail line stretching 390 kilometers.
The rail project, which will accommodate both passenger and freight cars at speeds of up to 160 kilometers per hour, seeks to address the limitations of Vietnam's current transport infrastructure. Presently, trains operate at a sluggish pace of just 50 kilometers per hour. Funding for this initiative will partly come from Chinese loans, and it forms an integral part of Vietnam's "Two Corridors, One Belt" initiative, aligning with Beijing's Belt and Road global infrastructure program.
Vietnam's growing allure as a destination for foreign businesses seeking alternatives to China underscores the importance of robust infrastructure. However, low-quality infrastructure has been a barrier to maximizing investment opportunities. The new rail link promises to alleviate international supply chain bottlenecks reliant on slow and expensive road transport. This development is crucial for Vietnam, where the road network struggles to meet demand and the rail system remains underdeveloped.
The rail line will traverse through Vietnam's capital, Hanoi, and the bustling port city of Haiphong. The project is scheduled for completion by 2030, although Vietnam's history of project delays remains a concern. A feasibility study for the Haiphong-Lao Cai railway is set to commence this year, indicating progress toward achieving this timeline.
Moreover, another rail connection from Hanoi to Lang Son province, bordering China's Guangxi region, is being considered, though it has yet to receive parliamentary approval. These initiatives reflect Vietnam's strategic "bamboo diplomacy," maintaining cordial relations with both China and the United States.
Guo Jiakun emphasized the urgency of the project, stating they are "working to expedite the construction of the connection line." Pham Thu Hang highlighted the broader economic impact, noting that the project aims to "promote economic, trade, investment and tourism cooperation between the two countries as well as in the region."
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