Vietnam approves rail link to China costing US$8b

Vietnam's parliament approved plans yesterday for an US$8 billion (HK$62.4 billion) rail link from its largest northern port city to the border with China, boosting links between the two communist-ruled countries and making trade easier.

The new rail line will run through some of Vietnam's key manufacturing hubs, home to Samsung, Foxconn, Pegatron and other global giants, many of whom rely on a regular flow of components from China.

The route will stretch 390 kilometers from the port city of Haiphong to the mountainous city of Lao Cai, which borders China's Yunnan province, and will also run through the capital Hanoi.

China will provide some funding through loans for the project, which is expected to cost more than US$8 billion. It is one of two railway lines to China that Vietnam plans as part of its "Two Corridors, One Belt" initiative, which connects to Beijing's Belt and Road global infrastructure program.

Vietnam's transport infrastructure is considered relatively weak, with a road network struggling to keep up with demand and an underdeveloped rail system.

Vietnam says a feasibility study for the Haiphong-Lao Cai railway will begin this year and it wants the line finished by 2030, although the country has a history of overruns on major infrastructure projects.

Vietnam says the new line will accommodate both passenger and freight cars with speeds of up to 160 kilometers per hour.

Agence France-Presse