HANOI: Vietnam plans to finance a US$ 67 billion high-speed rail entirely on its own in a presentation of the Communist-run country’s reluctance to accept international money, though some authorities said the target may be impossible.
The state budget’s monthly average costs for the project would be roughly US$ 5.6 billion for 12 years, according to the transportation ministry. The railroad had been Vietnam’s largest infrastructure project.
” With the spirit of independence and self-reliance, the Politburo has decided not to depend on foreign countries” to fund the planned 1, 541km railway, Deputy Transport Minister Nguyen Danh Huy said, according to state media.
The railway, with trains travelling at 350 km per hour, would be expected to be completed by 2035. The funding would be made possible by state revenues and, if necessary, by the issuance of government bonds. The deputy minister was quoted as saying that only foreign loans under concessional conditions would be considered if that proved to be insufficient.
On Thursday, the finance ministry and the transport ministry did not respond to requests for clarifications right away.
Vietnam’s public debt, which accounted for 37 % of its Gross Domestic Product ( GDP ) last year, is comparatively low. It has tended to invest less than planned, falling short by US$ 19 billion, or a quarter of forecast public investment spending, from 2021-2023, according to the finance ministry.
It has been reluctant to use foreign aid, having lost billions of dollars in development aid in recent years due to administrative delays, a widespread anti-corruption crackdown, and widespread fears of falling into debt traps.
The deputy transport minister claimed that the railway project’s funding was planned in a way to avoid debt traps.
However, experts in infrastructure funding claimed it might be challenging for Vietnam to construct such a significant project on its own.