Vietnam Railway has a long and very proud history. In 1881, the first railway in Vietnam and Indochina with a length of 71 km connecting Sai Gon with My Tho was started construction. 50 years later, by 1936, the railway length increased nearly 37 times, with a total length of 2,600 km across the three regions of the country. As the earliest railway system in Southeast Asia with synchronous capacity in both technical – physical terms and human resources, in some periods, the railway plays a very important role, accounting for 30% of the total market share of the transport sector, making a positive contribution to the country’s socio-economic development and national defense and security.

However, VietNam’s railway is lagging so far. Investment in the railway industry for many decades only accounted for about 3% of the total investment from the Central budget for transport infrastructure. Currently, Viet Nam’s railway network[1] is distributed along 7 main railway lines with a total length of 3,162.9 km, of which 2,703.2 km of main lines, 459.7 km of station’s inner lines and branch lines. It can be said that Viet Nam’s railway infrastructure is outdated, the 1,000 mm gauge lines still accounts for 84% of the total railway length (2,656.2 km), while most countries in the world no longer use it; the 1,435 mm gauge lines is 190.5 km, accounting for 6%; the rest is mixed-gauge length (1,435mm and 1,000 mm).

Viet Nam’s railway speed is only about 50-60km/hour for freight trains and 80-90km/hour for passenger trains, while in the developed countries of the world, average speed for passenger trains is about 150-200km/hour, high-speed rail is over 300km/hour and super high speed rail can reach more than 500km/hour. Up to now, Viet Nam’s railway is still at the second technological platform, which is diesel technology (the first technology is a steam locomotive). Currently, the developed countries are using the third technology – electrification technology and the fourth technology – electromagnetic technology. In addition, Viet Nam’s railway network has not had a synchronous connection with different types of transport such as airports, large seaports and no inter-regional connection in the Mekong River Delta and Central Highlands.

In recent years, the railway has not really contributed much to the economic development of the country. Statistics show that, the average annual volume of railway’s passenger carried in the period 1991-2000 decreased by 0.6%/year, in the period 2001-2010 increased by 1.3%/year and in the period 2011-2019 decreased by 3.6%/year; the average volume of passenger traffic per year in each period respectively increased by 5.3%, increasing by 3.2% and decreasing by 3.5%, while the average growth rate per year in the above periods for the whole transport industry as well as the roadway is over 9% for both passenger carried and passenger traffic; the airway is over 17% for passenger carried and nearly 19% for passenger traffic. In 2020, due to the impact of the Covid-19 epidemic, passenger transport of all types of transport declined sharply compared to previous years.

Average  growth rate of passenger transport in periods (%)

Period Total Railway Road Waterway Aviation
Passenger carried
1991-2000 7.3 -0.6 7.8 6.1 18.8
2001-2010 11.7 1.3 13.1 1.9 17.6
2011-2019 8.3 -3.6 8,5 4.7 16.2
Passenger traffic
1991-2000 7.8 5.3 6.9 8.0 25.4
2001-2010 11.7 3.2 12.0 2.4 17.1
2011-2019 9.9 -3.5 8.6 1.5 15.5

In 1990, the railway sector served 10.4 million passengers, accounting for nearly 3% of the total number of passengers in the transport industry and passengers traffic 1.9 billion passengers-kilometers, accounting for 12%. While other types of transport recorded rapid growth over the past half century, railway  has declined dramatically. By 2019, the number of passengers carried by the railway was only 4.7 million passengers, accounting for 0.2% of the total number of passengers serviced by transport industry and passengers traffic was 3.2 billion, accounting for 1%.

Although railway freight has achieved some more positive results, it tends to decrease more and more. The average annual freight carried of the railway in the 1991-2000 period increased by 10.3%/year, in the 2001-2010 period only increased by 2.3%/year and in the 2011-2019 period by 4.7%%/year; the average volume of freight traffic in corresponding periods is respectively up 8.7%/year, up 7.3%/year and down 0.6%/year. However, compared with other transport industries, it is still very modest.

Average growth rate of freight in periods (%)

Period Total Railway Road Inland waterway Maritime transport Aviation
Freight carried
1991-2000 9.7 10.3 10.2 7.8 13.6 27.4
2001-2010 13.6 2.3 15.0 9.7 14.8 15.4
2011-2019 8.7 -4.7 9.6 7.0 2.6 10.0
Freight traffic
1991-2000 12.1 8.7 12.5 19.1 10.1 39.5
2001-2010 14.6 7.3 16.3 8.2 16.6 14.1
2011-2019 3.4 -0.6 9.1 6.5 0.7 11.8

The volume of freight carried by railway in 1990 reached 2.3 million tons, then after 30 years, by 2020 was 5.1 million tons, 4.2 times more, while by road is nearly 29 times more than in 1990, inland waterways were 20 times and airways 130 times.

Once a major transport force, the railway is now being forgotten. After more than 5 years of restructuring, the railway face has also had some positive changes, but for many years, capital invested in railway modernization is very low, mainly for small maintenance and repair. Therefore, the change has not really gone into depth, the infrastructure is still outdated, service quality cannot compete with other industries, leading to decreasing output or losing market share. Meanwhile, other types of transport are heavily invested with diversified resources, from the state budget, from ODA sources and socialization. That imbalance has pushed the railway into an increasingly difficult and struggling situation to survive. Facing such difficulties and adding to the negative impact of the Covid-19 epidemic, the railway industry has become even more troubled. It can be said that rail lag is a waste of the country’s resources.

Recognizing the important role and underdeveloped situation of Viet Nam’s railway, on January 14, 2020, the Prime Minister issued Decision 82/QD-TTg approving the task of making the railway network planning for the period of 2021-2030, in which emphasize the objective: “Researching the plans for national railway network development up to 2050, making a suitable investment roadmap to meet transportation needs, ensuring industry connectivity, contributing to ensuring national defense – security and limiting environmental pollution” and “Strengthening the integration capacity of the economy on the basis of building a modern railway network, enhancing marketability, focusing on developing transport corridors closely linked with urban economic corridors and countryside”. With the attention of the Government and determination to innovate, improve service quality, it is hoped that in the coming period, Viet Nam’s railway will have a positive change, develop in accordance with its role and inherent position.

[1] Transport and Logistics Statistical Yearbook 2018.