HANOI: Vietnam plans to finance a $67 billion high-speed railway solely by itself, demonstrating the communist-led nation’s reluctance to just accept overseas loans, though some specialists say the objective could also be unrealistic.
The railway from the capital Hanoi to the southern industrial hub of Ho Chi Minh City can be Vietnam’s largest-ever infrastructure challenge, with common annual prices to the state finances estimated at round $5.6 billion over 12 years, in line with the Ministry of transport.
“In the spirit of independence and self-reliance, the Politburo determined to not depend upon overseas international locations” to finance the deliberate 1,541km railway, Deputy Transport Minister Nguyen Danh Huy mentioned, in line with state media.
The railway, with trains touring at 350 km per hour, is anticipated to be accomplished by 2035. Funding would come from state revenues and, if obligatory, from the issuance of presidency bonds. Foreign loans on concessional phrases will solely be considered if these show inadequate, the deputy minister mentioned.
The Ministry of Transport and Finance didn’t instantly reply to requests for clarification on Thursday.
Last yr, Vietnam had comparatively low public debt, amounting to 37% of its gross home product (GDP). It has tended to speculate lower than anticipated, falling brief by $19 billion, or 1 / 4 of anticipated public funding spending, over the 2021-2023 interval, in line with the Finance Ministry.
It has been reluctant to make use of overseas assist, having misplaced billions of {dollars} in improvement assist funding in recent times amid administrative delays, a broad anti-corruption crackdown and widespread fears of falling into debt traps.
The deputy transport minister mentioned the financing of the railway challenge was designed to keep away from debt traps.
However, specialists in infrastructure financing say it might be troublesome for Vietnam to implement such a big challenge by itself.
