Vietnam’s planned high-speed railway connecting Hanoi and Ho Chi Minh City is expected to cost US$500 million annually in its first years of operation, according to the Ministry of Transport.
The 1,541-kilometre railway, which is set to be completed by 2035, will rely heavily on government funding to cover its operational costs, especially in the early years.
The ministry estimates that revenue from the railway will only be enough to cover the costs of running the service and maintaining the trains during the first four years. Additional government funds will be needed to maintain the railway’s infrastructure.
With a construction cost of US$67.3 billion, the project’s operating expenses are expected to rise each year. By 2037, operating costs could reach $477 million, with the government contributing about US$238 million. Over the next few years, costs are predicted to increase, with government support gradually decreasing.
A report to the National Assembly suggests that the railway could take over 33 years to break even, not including the initial infrastructure investment. However, the Ministry of Transport is still optimistic, noting that the railway’s benefits could include faster travel times, lower logistics costs, fewer accidents, and a reduction in carbon emissions.
The project’s economic return is projected at 12%, with a benefit-cost ratio of 1.06, meaning the railway is expected to bring back more than it costs over time. The government hopes the railway will play a key role in Vietnam’s long-term economic and environmental development.