On November 13, the National Assembly held discussions on the investment proposal for the North-South high-speed rail project.

According to the Economic Committee’s review sent to National Assembly delegates, the project aligns with the 2021-2030 national rail network planning, with a long-term vision for 2050.

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The Economic Committee holds its 20th plenary meeting to review the North-South High-Speed Rail Project investment proposal. (Photo: National Assembly)

While generally supportive of the proposal, the Economic Committee urged the government to carefully review and select the best options to connect the high-speed rail line with the national rail network, urban rail systems, other transportation infrastructure, and regional and international rail networks.

In terms of economic and financial effectiveness, the Economic Committee requested clarification on the project’s transport demand forecasts.

It cited previous discrepancies in traffic demand projections for many BOT transportation projects, which impacted their financial viability and required contract adjustments.

A report from the National Appraisal Council warns that the project’s projected revenues may be overestimated, posing significant financial risks. To ensure accurate financial assessments, the committee emphasized the need to evaluate the likelihood that state budget subsidies will be necessary to cover future operational losses.

With a preliminary investment of more than VND 1.7 quadrillion (approximately $67 billion), the project cost exceeds 114% of the central budget’s total public investment allocation for 2021-2025.

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High-speed rail line in Laos. (Photo: Hoang Ha)

According to feasibility studies, the high-speed rail project, scheduled for completion in 2035, will require annual operations and maintenance expenditures exceeding VND 25 trillion ($1 billion) from 2036 to 2066, with no clear plan yet for funding.

To support the National Assembly's decision-making, the Economic Committee requested that the government provide detailed financing plans for these annual expenses.

The Economic Committee highlighted the project’s strategic importance, extensive impact on the national economy, and complex technological requirements, making it a significant undertaking for Vietnam.

To ensure the project’s feasibility and effectiveness, the committee supports allowing specific regulatory exceptions. The government has proposed 19 special mechanisms and policies necessary to realize the project, several of which have previously received National Assembly approval.

Given the substantial project budget, a cost variance of even under 10% (around VND 171 trillion) would have significant implications for the state budget, deficit, and public debt. Thus, the National Assembly's approval is necessary to maintain financial balance.

For timely progress, the Economic Committee recommended that the National Assembly authorize the Standing Committee to review and decide on aspects within the National Assembly’s purview, with reports to be submitted at the next assembly session.

Quang Phong