“Vietnam can’t afford not to build the express railway,” asserted Deputy Prime Minister Nguyen Sinh Hung in the National Assembly’s question & answer session on June 12.

Controversies over North-South express railway project

Overview of 7th National Assembly session

Delivering the government’s supplementary report about the Hanoi-HCM City express railway project to the National Assembly, Hung stressed that “the project will be carried out in phases to ensure we have sufficient capital. Sub-projects will be put into operation immediately. Phase by phase, we’ll gain experience and apply it in the next phase”.

DPM Hung said that other vital infrastructure projects will proceed simultaneously. Vietnam will build the North-South express railway while also completing the inland Ho Chi Minh Highway and building dikes and coastal roads. The current North-South railway will be rebuilt to carry freight and local passenger traffic, and the National Highway 1A linking Hanoi and HCM City will be rebuilt as an express highway.

“Then, you have no misgivings about the express railway project?” asked deputy Dang Nhu Loi (Ca Mau).

Deputy PM Hung answered: “I feel confident about it, that we must do it. I’m quite sure that what the Government has proposed to the National Assembly is what we should do.”

But where does capital come from, Hung was asked. Hung said: “This year our GDP is $106 billion. It will be nearly $300 billion by 2020, nearly $700 billion in 2030, between $1.2 and $1.4 trillion in 2040, twice that in 2050. Projecting our GDP growth into the future, around eight percent annually in the early period and around seven percent annually after that, it will rise from $1000 per capita to $20,000 by 2050. If we accept these projections, by 2020 Vietnam can safely manage a national debt of $150 billion.

“Our outstanding debt now is less than 50 percent of GDP. By 2020, our national debts may reach $150 billion, still a safe level. By 2030, our debts may be $350 billion. We can always manage interest payments equal to three or four percent of our GDP.

Weaning Vietnam off ODA

Deputy Duong Trung Quoc didn’t ask the Deputy PM about the investment effect or the economic elements of the megaproject. His concern was ODA (official development assistance) capital.

“ODA is loans by rich countries to poor countries, always with conditions. It is actually a mode of financial, technological and political investment that benefits the creditors. Though we must accept ODA we should see it as a temporary source. We must wean ourselves of the need for ODA. Does the government have a plan to cut down ODA loans,” Quoc asked.

Deputy PM Hung stressed that Vietnam under current conditions needs ODA, but doesn’t accept ODA-funded projects that are politically motivated. He conceded that Vietnam accepts some economic and technical conditions when it borrows ODA capital. “In general, we use it effectively. Despite the financial crisis last year, international donors still committed a record high level of ODA to Vietnam,” he said.

PV