HANOI:

In a bold move, Vietnam is set to embark on an ambitious plan to construct a high-speed railway connecting its capital, Hanoi, to the bustling southern city of Ho Chi Minh City—projected to cost a staggering US$67 billion. Remarkably, the Vietnamese government aims to fund the entire project independently, signaling a strong stance against foreign loans, even in the face of skepticism from experts.

The proposed railway, which will stretch 1,541 kilometers, is positioned to become Vietnam's largest infrastructure endeavor to date. The annual cost burden on the state budget is estimated at approximately US$5.6 billion over the next 12 years. Deputy Transport Minister Nguyen Danh Huy has emphasized the country’s commitment to self-reliance: “With the spirit of independence and self-reliance, the Politburo has decided not to depend on foreign sources for this funding,” he declared, as reported by state media.

Boasting train speeds of up to 350 km/h, the railway's completion is targeted for 2035. Funding strategies primarily involve utilizing state revenues, supplemented potentially by government bonds. Only if these resources fall short will the government consider foreign loans, according to Huy.

Despite a relatively low public debt standing at 37% of its Gross Domestic Product (GDP) last year, Vietnam has faced challenges in actual infrastructure spending. From 2021-2023, public investment fell short by US$19 billion, highlighting a pattern of underinvestment. This reluctance to accrue foreign aid has led to the forfeiture of billions in development funds due to bureaucratic delays and a stringent anti-corruption campaign, which has fueled fears of entering debt traps.

The ambitious self-funding model aims to sidestep these pitfalls. However, experts in infrastructure financing have raised alarms about the feasibility of such a massive undertaking without external assistance. Annual public spending on the railway would equate to 1.3% of Vietnam’s projected 2023 GDP, representing a considerable portion of the overall state budget.

"This plan may be theoretically possible, but it feels impractical," commented one infrastructure expert based in Vietnam, opting to remain anonymous due to media restrictions. Another industry insider echoed similar concerns regarding the project's financial viability without foreign support.

Historically, Vietnam has allocated approximately 20% of its state budget to infrastructure projects over the last two decades, primarily focusing on rural roads, as per World Bank data. Nguyen Hung, a logistics specialist at RMIT University Vietnam, remarked that the self-funding decision intertwines deeply with political narratives surrounding governance and national pride. Nevertheless, he anticipates Vietnam may eventually require loans and technological assistance from nations like China, Japan, and Germany.

As Vietnam charges ahead with this monumental project, the global community watches closely—will this soar as a beacon of self-sufficiency or fizzle in the face of economic reality? Only time will tell if this audacious railway vision becomes a reality!