Keep it running: Vietnam passes law to revive 'crucial' rail transport

By Xuan Hoa - Hoang Thuy   June 17, 2017 | 12:22 am PT
Keep it running: Vietnam passes law to revive 'crucial' rail transport
This photograph taken on May 10, 2017 shows an overview of the Gia Lam factory in Hanoi. Built by the French to fix trains for their fast-developing Vietnamese colony, the storied Hanoi factory is now in decline. Photo by AFP/Hoang Dinh Nam
The revised Railway Law offers incentives to investors so that they can bring the aging rail system back to its prime.

Vietnam’s lawmakers passed amendments to the Railway Law on Friday, promising incentives to investors to resuscitate a now unpopular mode of transport. 

The law, describing rail as "crucial" in the national transport network, will take effect in July next year. It will potentially give train-related projects easy access to land and funding. Investors in the sector will also receive favorable conditions such as cheap loans or tax waivers. 

Transport minister Truong Quang Nghia said at a meeting in late May that Vietnam had one of the first modern railway systems in Asia, but the glory has faded. 

The French built the country’s first railway which ran 70 kilometers (43 miles) from Saigon to My Tho in the Mekong Delta in 1881. A north-south system of more than 3,000 kilometers was developed over the next decades.

“It is really outdated now,” Nghia said.

The crisis has also damaged business at one of the country's largest train factories in Hanoi that was built by the French in 1905.

Officials said the rail system in general has received little attention compared to other means of transport.

Between 2011 and 2015, only 3 percent of the state budget’s infrastructure investment went to rail transport, while roads received nearly 90 percent.

Details of the new law have not been made available, but top lawmakers have suggested that the investment ratio for rail be raised to 35 percent.

With lack of investment, most of the rail network in Vietnam still runs on the narrow one-meter gauge, a design that has been blamed for regular train crashes. The network is also a safety threat due to the large number of unmonitored level crossings. 

Cheap air travel has made the downfall even more dramatic. 

The railway's share of the transport system has shrunk from 30 percent in the 1930s to less than 2 percent.

In 2015, 31 million people traveled by air, more than double the number in 2010, according to official statistics. That year, 11 million traveled by train. 

Some companies are looking to revive the romance of train travel, offering first-class trips with restaurant cars like the five-star train service launched this year from Ho Chi Minh City to the coastal resort town of Nha Trang or from Hanoi to the northern highlands town of Sa Pa.

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