Vietnam railways caught between a rock and a hard place

By Dat Nguyen   July 6, 2018 | 11:01 am GMT+7
Vietnam railways caught between a rock and a hard place
A worker operating a railway switch in Vietnam. Photo by VnExpress
It needs to replace thousands of coaches and a hundred locomotives, but the one-meter track system itself is outdated.

Vietnam’s railways sector is in a bind.

The long ignored, underdeveloped and perennially cash-strapped sector is legally mandated to replace 1,000 freight cars, 200 passenger coaches and 100 locomotives in three years.

They have gone past the 40-year period allowed for the use of passenger cars and 45 years for freight cars under the Railways Law.

In short, the sector has until July 2021 to finish replacing all outdated coaches and locomotives. A recent Tuoi Tre article said that it had been estimated that the replacement cost, from 2016-2020, would be VND4.1 trillion ($188 million).

But in 2016 and 2017, Vietnam Railways (VNR) only spent VND957 billion ($41.7 million) on building 90 new cars.

Apart from the high price tag, it is also a challenge to find suitable coaches and equipment.

Vietnam has been using the old, narrow gauge track that is a meter wide for over a century, while the current standard, worldwide, is the 1.435-meter wide broad gauge track that allows trains to travel faster and safer.

The outmoded system makes it very difficult to import suitable cars and equipment for Vietnam’s railways sector, said Nguyen Anh Tuan, railway-metro lecturer at the HCMC University of Transport.

There is an option to buy used cars from China, but the quality of second-hand vehicles from this country would not be good enough for use in Vietnam, Tuan told local media.

And even if Vietnam were to make new coaches on its own, they would still be part of the narrow gauge one-meter railway length system.

“This contradicts the long-term aim of the industry which is to upgrade its railway to the international standard of 1.435-meter width,” Tuan said.

New cars for an old system would be a waste of money, he added.

Lost momentum

In 1881, the French built the first railway tracks in Vietnam, one of the first in the region, and the most modern one in Southeast Asia.

But that was 140 years ago, and Vietnam is still using it. Vietnam currently has over 3,000 kilometers of railway tracks, none of them high-speed.

All Vietnamese trains run on diesel, while Malaysia, Thailand, Korea, Japan and China have electric railway systems.

Over 55 percent of 7,200 train cars are equipped with an outdated break system, while 72 percent of almost 400 old-tech locomotives are high on emissions and low on economic efficiency, according to the Vietnam Register.

In the 2010-2014 period, there were 2,000 technical difficulties, over half of them involving a train or locomotive that had been used for over 30 years, according to the Vietnam Railway Authority (VRA).

Sector leaders have admitted that the outdated system carries risks that can lead to accidents. In May, four major railway accidents killed two people and paralyzed traffic for hours.

The sorry plight of the railways sector in the country is reflected in its dwindling share of the transportation sector.

Ignored by policy makers in favor of other forms of transportation, the railways now account for just 1.9 percent of the transportation sector, a drastic plunge from the 30 percent it enjoyed in 1986, VRA said.

In belated recognition of the need for drastic improvements to the sector, the National Assembly approved a new provision of the Railway Law last year that aimed at providing more incentives and attracting more investors.

Under the new provision, which took effect on July 1, investors will enjoy lower interest rates and tax rates. They can even import railway cars and equipment into the country tax-free.

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