Hanoi (VNA)- The tentative total investment for the North-South high-speed railway,according to the Ministry of Planning and Investment (MPI), is about 26 billionUSD, 32.7 billion USD less than the previous proposal by the Ministry ofTransport (MoT).

MPI fileda report to Prime Minister Nguyen Xuan Phuc on the railway project,showing its approval for the lower-cost option instead of the MoT plan.

Citing analysis byexperts from Germany and the Netherlands, the ministry said that with the spanof thousands of kilometres, a running speed of 200km/h would be effectiveand help save some 32 billion USD compared to MoT’s solution.

Travelling between Hanoiand Ho Chi Minh City, under the MPI plan, would take about eight hours.

Moreover, if factorsbesides direction and length are taken into consideration, the cost may befurther reduced.

Deputy Minister of Planningand Investment Vu Dai Thang said the ultimate solution was to upgrade the oldinfrastructure for freight and simultaneously develop a new project to carrypassengers.

Previously, MoTproposed a plan to upgrade the current North-South railway to transport localcommuters and commodities. Meanwhile, a new high-speed system which wouldallow a train to run at 320km/h would be built with the tentativeinvestment of about 58.7 billion USD over 30 years from 2020 to 2050.

The project will beimplemented under the Public-Private Partnership (PPP) model, with 80 percentof the investment allocated from the State budget and the rest funded by theprivate sector.

According to MPI,after completing the project’s first phase connecting Hanoi with Vinh inNghe An province and Nha Trang in Khanh Hoa province with HCM City in2032, these two routes will be able to carry 364,000 passengers a day. Thetotal number of daily passengers on both routes, however, is predicted to reachjust 55,000 to 58,000, only 16 percent of the capacity.

Therefore, MPI saidit would be more effective and cost-effective to have the system perform at theslower speed of 200km/h.

Technology is anotherconcern in the project. MPI warned against depending on foreign partnersto operate the system and asked MoT to accelerate multilateral cooperationto reduce expenditure and encourage the private sector’s participation.

“The North-Southhigh-speed railway will be operated through generations; therefore, it isessential to have solutions for technology transition. It will be costly to buynew technology whenever the old one is out of work,” said Deputy Minister Thang.

According to Dr. TranDinh Thien, former Director of the Vietnam Institute of Economics, theproject’s investment efficiency must be considered. The high investmentcould result in expensive tickets, making it hard to compete against budgetflights.-VNA