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Old May 26th, 2010, 03:10 PM   #41
chornedsnorkack
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Originally Posted by foxmulder View Post
I have to agree that this is just too expensive for Vietnam. I mean, numbers do not lie. If a country has a GDP of 90 billion, it cannot just spend 55 billion on a single railroad project.
How do the costs of the 968 km Guangzhou-Wuhan railway compare?
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Old May 26th, 2010, 04:33 PM   #42
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Originally Posted by foxmulder View Post
I have to agree that this is just too expensive for Vietnam. I mean, numbers do not lie. If a country has a GDP of 90 billion, it cannot just spend 55 billion on a single railroad project. On the other hand, this type of infrastructure projects are musts for development so the appropriate method is to build this project in small pieces over at least 25-30 years.
I believe the current plan calls for completion in 2035. They really do need to start soon, as costs will only go up...
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Old May 26th, 2010, 05:18 PM   #43
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I can fully emphatise with the concerns.
Borrowing is no brainer. But, we have to consider if this will only burden the next generation.
As I mentioned in my earlier post, given the constraints and the state of development and affordability of the population, the priority should be to upgrade the meter gauge railway to serve passengers and freight better.

Please see other thread "Future of Metre Guage Railway".
Neighbouring Malaysia is doing 160km/h on meter gauge.
I firmly believe, Vietnam, together with Thailand, Malaysia, and the rest in the SEA peninsula can do a lot in joint R&D to fully exploit their existing metre gauge railway.

If a 160km/h train can be realise in 5 years, why get bogged down with debating a 300km/h HSR that may not material even in 30 years?

Finally, policy development is about choices, trade-offs. One has to be pragmatic.

Meter gauge manufacturers, here's a chance to serve this largely ignored market. A large part of the world is still without decent railway, such as in South East Asia, Africa, South America. Instead of waiting for HSR or prohibitive cost of conversion to standard gauge, why not upgrade the metre gauge with the latest technologies.
As I mentioned, at 160km/h or even 120km/h, metre gauge railway is already far superior to roads, and will be able to serve all the needs of freight and local/regional traffic.

High speed long distance travels (say > 1000km) is still limited to the privileged few, even if HSR is available. Leave this to air travel in the meantime. It is actually more effective, and less impactful to the environment.
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Old May 27th, 2010, 09:53 PM   #44
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geographically the high speed railway would be such a perfect choice. economic feasibility is a different story though.

Last edited by sickasick; May 27th, 2010 at 10:06 PM.
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Old May 27th, 2010, 10:01 PM   #45
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the original budget for Wuhan-Guangzhou HSR is about 13.7 billion dollars, but i read somewhere the actual cost is reported to be 17.1 billion dollars
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How do the costs of the 968 km Guangzhou-Wuhan railway compare?
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Old May 28th, 2010, 05:22 AM   #46
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Originally Posted by sickasick View Post
the original budget for Wuhan-Guangzhou HSR is about 13.7 billion dollars, but i read somewhere the actual cost is reported to be 17.1 billion dollars
Even at 17.1 billion dollars, that is a bargain (approx 17.7 million dollars per KM).
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Old June 14th, 2010, 09:22 PM   #47
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Vietnam's Bullet Train Dream

source: asiasentinel

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Hanoi pushes ahead to build a Japanese-designed bullet train system whether it needs it or not.



The idea of having a super-fast train that would reducing travel time between Hanoi and Ho Chi
Minh City from 30 hours to six has inspired Prime Minister Nguyen Tan Dung and his lieutenant, Minister for Transport Ho Nghia Dung, to push through an agreement with the Japanese even as intense debate was still going ahead in the National Assembly.

The government last August granted basic approval for the state-owned Vietnam Railways Corp. to use technology supplied by the famed Shinkansen Company for a US$56 billion, 1,560 km rail link across the S-shaped country.
The bullet train debate dominated the agenda in the National Assembly in May this year, but with little progress. Despite strong opposition, both the Vietnamese public and the National Assembly were startled by news reports from Japan that a deal had already been reached between the Nguyen Tan Dung government and Shinkansen, under which the Japanese company would sell the technology and build the bullet train, making the debate pointless in the face of a fait accompli.

Vietnam observers now believe the bullet train proposal is going down the same track as legislation last year to allow the development of vast bauxite mining – and potentially polluting -- operations in the Central Highlands despite widespread public protest including even an open letter from Vietnam War hero Vo Nguyen Giap to wait until the project could be studied. All but a handful of National Assembly deputies were pressed into approving the bauxite exploration because "it has been instructed by the Party." In this light, the bullet train is expected to go ahead, no matter what.

But the obvious problem is that such a project would squeeze tightly an economy that has just come out of poverty, with annual per capita income at around US$800. Critics have calculated a massive volume of foreign debt that Vietnamese future generations would have to repay should it go ahead. The US$56 billion alone would represent more than half of Vietnam's total gross domestic product, forecast at US$97 billion in 2010, with total costs potentially climbing to over $100 billion by the time it is completed, analysts say, and raises questions whether the funds could be used to develop less expensive and more necessary infrastructure such as roads or conventional rail to replace the current system, which dates back to the French colonial period.

Japanese officials, obviously anxious to sell such an expensive project, have said Vietnam's total public debt is far below Japan's and that the country can afford it. But Japan is the second most heavily indebted country in the world as a percentage of gross domestic product next to Zimbabwe, which is a basket case from years of economic mismanagement
Vietnam, with nearly 90 million people, has spent nearly 30 years recovering from a savage war exacerbated by the loss of financial support with the collapse of the Soviet Union and its disastrous flirtation with a command economy. The labor force is growing by more than a million new faces a year although the export-led economy has averaged 7 percent annual growth for a decade -- until the onset of the global financial crisis cut exports by nearly 10 percent annually. While domestic investment has been healthy at 16 percent, foreign direct investment nosedived by 70 percent in 2009.

Under those circumstances, the train, said a Vietnamese scientist, "is ridiculously extravagant."

There are also questions over its utility. The Shinkansen system is designed only to transport passengers, not cargo, and the economic benefits of a bullet train system are less than apparent with long-term state subsidies required to build and operate the system. None of the 12 developed countries that have bullet trains borrowed from overseas to build the systems.

The Japanese ambassador, Mitsuo Sakaba, is urging caution, saying on May 31 that "Vietnam needs to carefully consider the project to use Shinkansen technology and the benefits the project might bring about." In an interview with the Vietnamese newspaper Lao Dong, Sakaba cited a study by the Japanese International Cooperation Agency foreseeing little use of the route by 2020 and suggesting that the Japanese government would wait for the matter be debated in parliament before deciding if and how it might cooperate.

To counter opposition to the project on cost grounds, Deputy Prime Minister Nguyen Sinh Hung* has now announced a "new strategy for foreign debts." Looking into the next two decades, as the Vietnamese economy grows to a more advanced level, more foreign overseas development aid and development investment are expected to pour in, making greater borrowing possible, Minister Hung told the public.

The critics of the train project include former government ministers, war veterans, leading scientists, overseas Vietnamese intellectuals and a large number of bloggers. The government's suppression of the freedom of speech and pre-Congress strict media censorship have driven most of the critics of the project to air their protests on the internet, using pseudonyms.

Against the well-knit government propaganda machinery, the opposition has had little influence. However, why is there such a sudden fuss? Why does the government keep pushing ahead with such an extravaganza? Speculation in the media in Hanoi suggests two possibilities. One relates to internal fighting in the ruling Communist Party. By supporting the bullet train system, Dung's opponents among the Politburo are said to be laying a trap that would direct mounting public criticism to him personally. According to this theory, his enemies want to get rid of him in the next Party Congress, due early 2011.

The other theory is that the super train debate is being used by the leadership to distract the public from more sensitive issues such as the simmering tension with China on the South China Sea over the Spratly Islands and the regional arms race going on in Southeast Asia. Stability in the Vietnamese public is traditionally required before a Communist Party Congress. Evidence for both explanations is mostly anecdotal.

In recent years, government and corporate heads in Vietnam have been obsessed with the idea of leaving their mark while in office, thus creating "biggest things." Recent Vietnamese Guinness achievements include the biggest square cake and the biggest bottle of wine, both for King Hung (of the Ancient Viet), and a gigantic coffee cup. A bullet train is best seen as yet another attempt that reflects the Guinness-driven mentality, the critics say.
*Nguyen Sinh Hung's title was inadvertently misstated in an earlier version. We thank a reader for his correction.
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Old June 16th, 2010, 08:50 AM   #48
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Critics urge brakes on Vietnam's high-speed rail

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HANOI — The Reunification train sits baking on the Hanoi platform as passengers settle in to hard wooden seats next to open windows.

Almost two days of travel lie ahead before it reaches southern Ho Chi Minh City, but a controversial government plan would cut that journey to less than six hours.

Vietnam's communist authorities are seeking legislative approval for a bullet train that would cover the 1,570-kilometre (975 mile) distance at speeds of 300 kilometres an hour.

It would be built by 2035 and cost 56 billion dollars, almost 60 percent of the country's gross domestic product (GDP) last year. That price tag has left a cross-section of society questioning the government's priorities.

"Our country is still poor," Tran Hung Viet, one of many National Assembly deputies to criticise the plan during legislative debates, was quoted as saying by VNExpress news website.

The debates are closed to foreign reporters but have been widely covered in local media ahead of a June 19 vote on the plan.

While the government talks of mega-projects, some children in the Central Highlands can only get to school by swinging on a cable across a river because they have no bridge, Assembly member Nguyen Minh Thuyet told AFP.

Vietnam is developing rapidly, but roughly half the population still works in agriculture, the per capita income is about 1,000 dollars, and the minimum government salary is 730,000 dong (38 dollars) per month.

Modern shopping malls and fast-food restaurants in Ho Chi Minh City, the country's commercial centre, are a world away from ethnic minority hamlets of central Quang Tri province, where dirty-looking children play outside roughly-built homes of wood and corrugated metal.

For Nguyen Hoai Thu, 22, a Hanoi college student, the Reunification train may not be perfect but it gets her home economically to Ha Tinh province, 350 kilometres south of Hanoi.

"It takes only eight hours and it costs me just 86,000 dong," she said.

A bullet train could make the journey in just over one hour but Tran Thi Ca, 65, also heading to Ha Tinh on the single-track railroad, said the funds could be put to better use.

"We should save the money to upgrade the roads, to give to poor farmers," she said.

That is a common view, as most ordinary people would prefer the government to focus on more immediate concerns like healthcare and electricity, said Le Dang Doanh, a visiting fellow at the Economic College of Hanoi.

Doanh is "urgently" calling for rejection of the plan which he said would benefit only a limited number of wealthier people.

He argued that over a long distance the train could not compete with airlines. A rail ticket would cost about 70 percent of a flight from Hanoi to Ho Chi Minh City, which takes only two hours by plane.

Modernising the current train system and further developing maritime transport and roads would be more efficient, Doanh said.

He described the high-speed train investment as "very risky" given the country's economic imbalances.

According to the World Bank, Vietnam's budget deficit reached a "very high" 8.4 percent of GDP last year. Public debt accounted for about 47.5 percent of GDP, which the World Bank said was high but sustainable if the government is prudent.

The Bank does not object to the high-speed train but said it has no involvement.

Japanese officials say the Vietnamese government has agreed to adopt its Shinkansen technology for the railway, which needs formal approval by the National Assembly.

Although more than 90 percent of deputies are Communist Party members, the parliament has in recent years become more vocal over the country's major problems.

Japanese Transport Minister Seiji Maehara said his government will consider financial assistance for the railway, which he proposed be opened in stages, according to Japan's Jiji Press.

A Vietnamese government spokesman has been quoted as assuring the high-speed railway will not bankrupt the nation.

There is no time to waste, according to Nguyen Huu Bang, general director of the state-owned Vietnam Railways Corp.

"This is a project of the future but we ought to start implementing it right now, lest we be ready too late," he said, quoted by VietnamNet news portal.

"It will put Vietnam in the first rank of rail travel."

Doanh, the economist, said the project seems to reflect the government's strong desire to develop the country but, "it looks very much like a white elephant."
Source: http://www.google.com/hostednews/afp...do9y9vSc7-NloA
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Old June 20th, 2010, 09:54 AM   #49
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Vietnam legislature rejects bullet train project
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HANOI : Vietnam's legislature on Saturday rejected a proposed 56-billion-dollar bullet train project, after concerns that more basic needs should take priority over a scheme dismissed as economically unsound.

In a rare decision by the communist-dominated National Assembly, which usually backs proposals from the government, deputies said they had asked for further study of the plan.

"The National Assembly did not approve a resolution on this project," one deputy, Duong Trung Quoc, told AFP after the vote, which was closed to foreign reporters.

He said a slight majority of 20-30 deputies voted against the plan.

Under the communist government's proposal, the train would have linked the capital Hanoi with the southern commercial hub of Ho Chi Minh City 1,570-kilometres (975 miles) away, at speeds of 300 kilometres an hour.

On the country's existing single-track railway, the journey takes almost two days.

Plans called for the high-speed link to be built by 2035 at a cost amounting to almost 60 percent of the country's gross domestic product (GDP) last year.

"I think it's a reasonable result that shows the responsibility of the deputies," Quoc said of the rejection.

Although more than 90 percent of the nearly 500 deputies are Communist Party members, they have in recent years become more vocal over the country's major problems.

Assembly president Nguyen Phu Trong said the North-South train was a very important project which became "a particular preoccupation" of deputies and voters.

"The National Assembly examined it in a serious manner, carefully and prudently, and charged the government with continuing to examine the country's transport system," Trong told the assembly.

Le Dang Doanh, a visiting fellow at the Economic College of Hanoi, told AFP ahead of Saturday's vote that most ordinary people would prefer the government focus on more immediate concerns such as healthcare and electricity.

He called the train a "very risky" investment given the country's economic imbalances.

According to the World Bank, Vietnam's budget deficit reached a "very high" 8.4 percent of GDP last year. Public debt accounted for about 47.5 percent of GDP, which the World Bank said was high but sustainable if the government is prudent.

"Our country is still poor," Tran Hung Viet, one of many deputies to criticise the plan during debates, was quoted as saying by VNExpress news website.

Vietnam is developing rapidly, but roughly half the population still works in agriculture, the per capita income is about 1,000 dollars and the minimum government salary is 730,000 dong (38 dollars) per month.

Japanese officials have said the Vietnamese government had agreed to adopt its Shinkansen technology for the railway, if the project were approved.
http://www.channelnewsasia.com/stori...064400/1/.html
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Old June 21st, 2010, 05:27 AM   #50
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I'm just wondering/ throwing this idea out into the open, what are the chances that Vietnam would consider joining and getting help from China to build the system? I mean like wouldn't it be more cost worthy if they got an estimate from China on construction as they already have the expertise on building HSR (learning from others)? I just find it kind of difficult to understand how Vietnam's ruling party is so different compared with the Chinese ruling party.
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Old June 21st, 2010, 03:26 PM   #51
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Originally Posted by Nozumi 300 View Post
I'm just wondering/ throwing this idea out into the open, what are the chances that Vietnam would consider joining and getting help from China to build the system? I mean like wouldn't it be more cost worthy if they got an estimate from China on construction as they already have the expertise on building HSR (learning from others)? I just find it kind of difficult to understand how Vietnam's ruling party is so different compared with the Chinese ruling party.
There's a lot of nervousness about falling under Chinese influence, but they haven't ruled out Chinese participation. In any case, China has set the cost benchmarks for HSR and these are known to the public.

http://english.vietnamnet.vn/reports...actors-916981/

"Reporter: Vietnamese experts went to China to see its express train. Will we use this technology?

Dung: We haven’t excluded China’s technology. There will be many sub-projects in the express railway project, so there will be many contractors. Frankly, I’ve never talked with Chinese officials about this project."
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Old June 21st, 2010, 03:50 PM   #52
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The Vietnamese struck a deal with the Japanese for this project, which included among other things technology and loans. So I don't think their Japanese partners would allow them to renege this deal and seek Chinese help if they wanted to.
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Old June 21st, 2010, 06:01 PM   #53
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The Vietnamese struck a deal with the Japanese for this project
Well, the deal required a parliamentary approval, which wasn't granted. So the deal is off, just like Hitachi's UK deal.

Vietnam link is one of few high speed rail projects where a Chinese bid makes sense, because it is about constructing an all new railway link from scratch(Vietnam's existing narrow gauge railways cannot be recycled), and there is no Western-standard intellectual property rights law that's holding back Chinese from selling CRH380A to Vietnam.

So yes, the Chinese bid is feasible in Vietnam on a more favorable financial term, in exchange for a linkage with Chinese high speed railway system.

The real barrier to Chinese bid is the historical and political animosity between Vietnam and China, as Vietnam sees China as a threat and prefer not to deal with China. This is the reason Japanese bid was selected over Chinese bid in the first place, even at a much higher cost.
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Old June 21st, 2010, 10:54 PM   #54
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If I look at the Japanese proposal vs a Chinese benchmark, this is what I see:

China
Speed: 350-380km/h
Cost: $27B (1570km x $17M per km)
Construction: 4-6years

Japan
Speed: 300km/h
Cost: $56B (1570km x $36M per km)
Construction: 10?-30years (depending on the section)

If Vietnam really want to build a high speed railway , then they could save $29B (31% of the Vietnamese economy) by going elsewhere
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Old June 22nd, 2010, 12:18 AM   #55
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If Vietnam really want to build a high speed railway , then they could save $29B (31% of the Vietnamese economy) by going elsewhere
Of course Chinese bid would be a lot cheaper, but many Vietnamese look at China's bids with a deep suspicion because of historical ill-relationship between two. Vietnamese haven't forgotten about Chinese surprise takeover of Paracel Islands and the Sino-Vietnamese War of 1979. The relationship between Vietnam and China can best be described as the relationship between Argentina and UK, or India and China. Accepting Chinese bid would be a tough sell with National Assembly because Vietnam's fear of increasing Chinese influences.

So Chinese have to think about their unpopularity in Vietnam and how to overcome this when making the bid, and not just about low price.
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Old June 22nd, 2010, 06:03 AM   #56
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Quote:
Originally Posted by Restless View Post
If I look at the Japanese proposal vs a Chinese benchmark, this is what I see:

China
Speed: 350-380km/h
Cost: $27B (1570km x $17M per km)
Construction: 4-6years

Japan
Speed: 300km/h
Cost: $56B (1570km x $36M per km)
Construction: 10?-30years (depending on the section)

If Vietnam really want to build a high speed railway , then they could save $29B (31% of the Vietnamese economy) by going elsewhere
The above PRC estimate is artificial since it does not reflect the actual RMB exchange rate which will rise against the USD since PRC have lifted the peg at the beginning of this week.
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Old June 22nd, 2010, 06:59 AM   #57
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The above PRC estimate is artificial since it does not reflect the actual RMB exchange rate which will rise against the USD since PRC have lifted the peg at the beginning of this week.
It's not going to rise by 100% in 5 years. More likely, it will return to the steady 4-5% increase per year it was trending prior to the financial crisis.
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Old June 22nd, 2010, 02:27 PM   #58
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It's not going to rise by 100% in 5 years. More likely, it will return to the steady 4-5% increase per year it was trending prior to the financial crisis.
Never said it will but I believe it will rise around 20%~30% in the next 5 years against the dollar to reflect the actual trade relationship between the US and PRC.
There is also the Euro crisis which will also up heave the RMB since the RMB was utilizing a basket trade currency.
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Old June 22nd, 2010, 03:33 PM   #59
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The above PRC estimate is artificial since it does not reflect the actual RMB exchange rate which will rise against the USD since PRC have lifted the peg at the beginning of this week.
Chinese bid in Vietnam isn't strictly commercially oriented; rather this is a form of foreign aid designed to increase China's influences over Vietnam, so profit/loss balance sheet doesn't matter.

After Chinese version of high speed rail is constructed, Vietnam would be in $27 billion debt to China; then it becomes easier for China to pull strings in Vietnam. Not to mention that a linkage of Vietnamese rail to China would enable a mass influx of Chinese into Vietnam.
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Old June 22nd, 2010, 03:55 PM   #60
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56 B $ is such a big price tab that even a fully developed country would hesitate to take.
Considering that Vietnamese (nominal) GDP is ~ 90 B$/year, it sounds way unrealistic. Vietnam could spend just a fraction of 56B$ in more basic infrastructures and reap greater benefits than a high speed rail.
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