Vietnam Mulls Spending US$65 billion on Transport Infrastructure

• 19 May 2021
• Construction Focus
• 3175 Views

Vietnam’s Ministry of Transport has recently announced plans to spend approximately US$65 billion to improve transport infrastructure nationwide.

According to the 2030 master plan, the estimated budget will be used for projects such as the construction of 5,000 kilometres of expressways, a deepwater port in Hai Phong, high-speed rail routes running along major north-south arteries, and the completion of Long Thanh International Airport near Ho Chi Minh City.

According to the article published by The Diplomat in early May, Vietnam’s ambition is to become like South Korea, Taiwan and Singapore; a newly-developed country with a strong economic position in the region.

To achieve this ambitious plan, Vietnam must follow what those three countries have in common which is infrastructure development. Vietnam’s economy has been growing rapidly in the past decade, especially in the manufacturing and export industries driven by low-cost labour.

Taking into account the economic growth, Vietnam needs to have a sufficiently large transport infrastructure system. Roads, rail, airports and ports must be interconnected to facilitate an increase in trade activities.

For instance, Vietnam has also included the construction of the Haiphong deep-sea port project in its 2030 master plan due to the fact that LG Display from South Korea has invested over US$3 billion in building a factory in the northern city of Haiphong.

With the ambition to spend more than US$65 billion, the next question is how can Vietnam find the money?

Vietnam has explored various ways to raise funds to fulfil this ambition, such as private investment, and foreign loans, among others. However, the latest method presented by the Vietnamese Minister of Transport Nguyen Van The is through government bonds, then collect toll fees to repay the state.

Nevertheless, The Diplomat also expected that other issues could also occur during the implementation procedure including the institutional capacity of the state to handle these demands and other thorny issues like land disputes and long-term financing.

Photo credit to Financial Time

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