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AllAfrica
6 days ago
- Business
- AllAfrica
Vietnam should heed the risks of high-speed rail losses
As Vietnam embarks on building its first high-speed rail (HSR) system, the financial struggles and failures of similar projects worldwide offer important lessons and insights. While Vietnam has only recently moved toward implementation, many countries have operated advanced HSR systems for decades. The experiences of these early adopters provide a valuable roadmap of potential pitfalls to avoid. The financial unsustainability of high-speed rail is a global phenomenon. According to the OECD, most HSR projects worldwide operate at a loss. This is supported by a World Bank study of 258 transport infrastructure projects across 20 countries, which found that nine out of ten exceeded their initial budgets and 84% had inaccurate revenue forecasts. The study's author, Professor Bent Flyvbjerg, noted that a mere 0.5% of all projects were completed on time, within budget and delivered their anticipated benefits, often because governments rushed approval before conducting thorough feasibility studies. Even the most celebrated HSR systems are not immune. Japan's Shinkansen, the pioneer of high-speed rail, required the government to cover nearly 100% of its 380 billion yen construction cost (roughly US$17 billion today) and had lost around $100 million by 1972. Similarly, China operates the world's most extensive HSR network but faces mounting debt nearing $900 billion, with only 6% of its 45,000-kilometer network reportedly profitable. More recent projects highlight specific modern challenges. Indonesia's Jakarta–Bandung high-speed rail, a joint project with China, saw its budget balloon from $5.5 billion to $7.3 billion. Reliant on Chinese loans, the line was already reporting $200 million in annual losses upon opening in 2024. In Taiwan, a $15 billion HSR project launched in 2007 suffered continuous losses for years, with deficits reaching $1.73 billion by 2014. This was largely due to fierce competition from low-cost airlines and passenger volumes falling to nearly half of projections. These cases underscore the importance of cautious planning, realistic financial projections and a thorough assessment of long-term viability. Failure to account for these factors can lead to HSR projects becoming unsustainable financial burdens. Profitability and capital recovery time of global high-speed railway projects. Graphic: The Vietnamese / Luat Khoa Magazine Vietnam need not look abroad for cautionary tales; its own domestic urban rail projects have already suffered from the same issues plaguing HSR globally. Both the Cat Linh–Ha Dong line in Hanoi and Metro Line 1 in Ho Chi Minh City have been marred by severe cost overruns, prolonged delays and continue to operate at a loss. What is particularly concerning is that these are relatively modest urban projects, far less complex than the proposed North–South HSR system. The Cat Linh–Ha Dong line serves as a stark case study. Contracted to a Chinese builder, its budget ballooned from an initial $552.8 million to $886 million. The construction timeline stretched to nearly 10 years (2011–2021) for a railway that runs only 13 kilometers at a top speed of 80 km/h. Financially, the project is unsustainable. In 2024, it reported a post-tax profit of just $600,000—a mere 0.07% return on the original investment—and remains dependent on heavy government subsidies. Current estimates suggest a staggering 6:1 subsidy ratio, meaning for every $1 in ticket revenue, the government provides $6 in support. The financial unsustainability of the Cat Linh–Ha Dong project is apparent. Based on ticket revenue alone, the line would need 247 years to recover its $886 million investment. Factoring in its 2024 net profit of just $600,000, the payback period stretches to an astonishing 1,438 years. This calculation does not even account for its annual operating cost of over $24 million. Despite this sobering precedent, Vietnam is now undertaking its largest-ever public investment: the North–South High-Speed Railway. Approved by the 15th National Assembly in November 2024, with a budget of $67.34 billion for a 1,541-kilomater route, the project's projected cost has already increased by over $35 billion from its initial concept. To mitigate the immense financial risk, the government is shifting its strategy. A revised Law on Railways, along with new resolutions, now allows domestic enterprises to participate as primary investors. As experts like Associate Professor Tran Dinh Thien and Associate Professor Bui Quang Tuan argue, 'The mindset that only the state can build national infrastructure is outdated,' suggesting the project could catalyze the growth of Vietnamese industries. However, this new public-private approach is already facing public anxiety, particularly over the decision to allow VinSpeed—a recently established company with a charter capital of just $230 million—to register for the $67.34 billion project. VinSpeed, a key potential investor, has publicly stated it will 'accept potential losses' and is participating not for land but 'to serve the nation.' The company acknowledged that 98% of global high-speed rail projects are unprofitable but did not clarify whether these expected losses would be borne by its own capital or through state-supported loans, raising concerns about the project's financial transparency. This lack of clarity has been compounded by domestic media coverage that has largely focused on the project's potential, leaving little room for critical discussion of its risks. Procedurally, the project deviates sharply from international best practices. Core assessments for ridership, financial modeling and technology sourcing have yet to be finalized. Even more troubling is the timeline: the official feasibility study is not due until the fourth quarter of 2026, just months before the scheduled groundbreaking in December. This means companies are registering to invest in a multi-billion-dollar project before a formal feasibility report even exists. Financially, the project's costs are already an outlier. Prime Minister Pham Minh Chinh has explained that extensive use of elevated tracks and tunnels will push the estimated cost to around $43.6 million per kilometer—more than double the World Bank's global average of $17–21 million per kilometer. Despite all these unanswered questions, planning deficits and alarming cost projections, irreversible actions like land clearance and resident relocation are already underway in many provinces. Graphic: The Vietnamese / Luat Khoa Magazine The HSR era began in October 1964 with Japan's Tokaido Shinkansen, a project that laid the groundwork for a global wave of HSR development. Yet, in the decades since, only one project is widely regarded as a true financial success: the Train a Grande Vitesse (TGV) line connecting Paris and Lyon in France. Inaugurated in 1981, the Paris-Lyon TGV was built for a then-record low of just $4 million per kilometer for a total length of 417 kilometers, and was financed without direct government subsidies. This technical and commercial success was proven almost immediately. The line transported 10 million passengers in its first year, a number that quickly doubled, leading to an internal rate of return (IRR) of 12%—allowing the project to recover its initial investment in just 12 years. This success has endured to this day. By 2023, the TGV network carried 122 million passengers and generated 9.7 billion euros in revenue (approximately $11.3 billion), solidifying its status as one of the few HSR models in the world to achieve long-term commercial viability. This article was published in English by The Vietnamese and originally published in Vietnamese by Luat Khoa Magazine. It is republished here with kind permission.
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Business Standard
31-07-2025
- Business
- Business Standard
CIDCO to draft mobility plan for Navi Mumbai, new intl airport area
Maharashtra town planning authority, CIDCO, on Thursday said a comprehensive mobility plan (CMP) will be formulated for the transit development of Navi Mumbai and the international airport influence notified area (NAINA). The plan for 2054 and beyond aims to promote a sustainable, inclusive, and efficient transportation policy for one of the country's fastest-growing urban corridors. "With projects such as Navi Mumbai International Airport, Corporate Park, Aerocity, Edu City, Logistic Park, Medicity, along with residential and industrial growth, traffic volume in Navi Mumbai is set to rise substantially. "In this backdrop, the Comprehensive Mobility Plan will serve as a guiding framework for CIDCO and other authorities to develop a versatile, inclusive, and future-ready transportation system," Vijay Singhal, Vice Chairman and Managing Director of CIDCO, stated. The proposed CMP will adopt a holistic approach, integrating various forms of mobility like public transportation, private vehicles, and non-motorised options such as walking and cycling. Some of the key objectives of the CMP include ensuring safe, efficient, and environmentally sustainable transport for all and creating an integrated transportation network across Navi Mumbai and NAINA. CIDCO underscored the urgency of a long-term transportation framework as Navi Mumbai prepares for massive infrastructural additions, including Navi Mumbai International Airport, Atal Setu (Mumbai Trans Harbour Link), Metro Line 8 (connecting NMIA to Mumbai International Airport), Panvel-Karjat suburban railway line, Belapur to NMIA Metro Line 1 extension, and corporate and manufacturing hubs across Kharghar, Taloja, and Ulwe. Currently, Navi Mumbai's infrastructure includes 980 km of roadways, major corridors such as the Thane-Belapur Road, Sion-Panvel Highway, and Palm Beach Road, a 60-km railway network, the Belapur-Pendhar Metro, and bus services. "The CMP will play a crucial role in identifying gaps in the current transportation network, prioritising investments, and creating a phased roadmap aligned with local and regional mobility needs," CIDCO stated. The plan is expected to be finalised in phases following consultations with regional stakeholders, transport experts, and urban planners.
Daily News Egypt
01-06-2025
- Business
- Daily News Egypt
Egypt launches trial operation of Cairo Ring Road BRT first phase
Egypt's Ministry of Transport announced the start of trial operations for the first phase of the Bus Rapid Transit (BRT) project on Cairo's Ring Road on Sunday, 1 June 2025. This initial phase, now open to passengers, extends 35 kilometres from the intersection of the Ring Road with the Alexandria Agricultural Road to the Police Academy station. The ministry stated this initiative aligns with directives from President Abdel Fattah Al-Sisi to expand sustainable, environmentally friendly mass transit systems and to operate this first phase to serve users of the Ring Road. The BRT is described as an environmentally friendly mass transit system designed to offer high service levels. All buses deployed are locally manufactured, air-conditioned electric vehicles, a move consistent with presidential directives to localise various industries in Egypt, including bus manufacturing. The frequency of buses is planned at every three minutes, equivalent to 20 buses per hour, and is set to increase to every one and a half minutes during peak times. This project is envisioned as a key artery connecting eastern and western Cairo, with a link to the New Administrative Capital, offering a fast, modern, clean, and safe transport option. It integrates with other transport modes, interchanging with Metro Line 1 at El Zahraa and El Marg stations, Metro Line 3 at Adly Mansour and Imbaba stations, and the Light Rail Transit (LRT) at Adly Mansour station. The first phase includes 14 stations: Adly Mansour (a non-standard station); two surface stations with pedestrian bridge access (Bahtim and Police Academy); and eleven surface stations with pedestrian tunnel access. These tunnel-access stations are Alexandria Agricultural Road, Colonel Ahmed Abdel Rahim, Shubra Banha, Mostorod, El Khasous, El Marg, El Qalag, Zakat Foundation, Field Marshal Ibrahim Orabi, El Salam, and Suez Road. The ministry provided details on the areas served by each station: Alexandria Agricultural Road station: Accessed via a pedestrian tunnel, serving the Alexandria Agricultural Road and commuters from Banha, Toukh, Qalyub, and their surrounding areas, as well as those from Shubra El Kheima using the Ring Road. Colonel Ahmed Abdel Rahim station (Sharqawiya area): A surface station with pedestrian tunnel access, serving the Sharqawiya area and nearby villages such as Mit Halfa and Mit Nama. Shubra Banha station: A surface station with pedestrian tunnel access, serving those heading to the Shubra Banha Freeway and the Al-Assar Axis. Bahtim station: A surface station with pedestrian bridge access, serving the Bahtim area, West Shubra El Kheima, and Eskoo Club Street with its surrounding villages. Mostorod station: A surface station with pedestrian tunnel access, serving the Mostorod area, Ismailia Canal, Ismailia Agricultural Road, Belbeis Road, and commuters heading to Amiriya and Matareya. El Khasous station: A surface station with pedestrian tunnel access, serving the El Khasous area and its affiliated hamlets. El Marg station: A surface station with pedestrian tunnel access, serving the New El Marg area, the Marg-Khanka axis, and interchanging with Metro Line 1 via El Marg station. El Qalag station: A surface station with pedestrian tunnel access, serving the El Qalag area, Mohamed Naguib Road, and their surroundings. Zakat Foundation station: A surface station with pedestrian tunnel access, serving the Zakat Foundation area and commuters from Ain Shams and surr
Time of India
24-05-2025
- Business
- Time of India
Clashing projections in DPRs for Metro Line-2 raise eyebrows
Jaipur: The new Detailed Project Report (DPR) of Metro Line 2, prepared by RITES, has sparked controversy as it calculates an estimated passenger count far greater than the number quoted in the DPR prepared by the Delhi Metro Railway Corporation (DMRC) in March 2012. Tired of too many ads? go ad free now While the fresh report estimates a passenger count of 2.3 lakh passengers for Metro Line 2 in 2031, the earlier DPR estimated around 6.8 lakh daily passengers would use Metro Line 2 by 2031. This huge difference in passenger estimation has divided experts into two sections. A section of officials blamed the previous govt and stated the estimation wass intentionally hiked to increase the chance of loan approval for the project. "Jaipur Metro is the only metro service in the country that is solely constructed and operated by the state govt. All other metro services in India run on a central-state partnership. We feel, to ensure a high chance of loans for this project to get approved, the estimated figures were deliberately hiked," said a senior official from Urban Development and Housing (UDH) Department. Another section of officials feels RITES estimated the passenger count 'low' keeping in mind the passenger footfall in Metro Line 1, which operates from Mansarovar to Badi Chaupar at present. Although DMRC estimated a footfall of 1.23 lakh by 2025 for Line 1, the present average footfall of Line 1 is around 50,000 only. "Both the DPRs were prepared in March 2012 with Line 2 as a priority, which means the initial plan was to construct the metro on Tonk Road first and then on the Mansarovar to Badi Chaupar stretch. Estimation of the Mansarovar to Badi Chaupar stretch was done keeping in view that both lines are operating simultaneously. If the govt continued with the earlier plan, passengers' footfall would have also increased significantly on the Mansarovar to Badi Chaupar stretch," a metro official said.
Daily News Egypt
17-05-2025
- Business
- Daily News Egypt
PM Madbouly inspects BRT project during trial phase ahead of public launch
Prime Minister Mostafa Madbouly, joined by Deputy Prime Minister for Industrial Development and Minister of Industry and Transport Kamel Al-Wazir, carried out an inspection tour on Saturday to assess the progress and operational readiness of the first phase of Egypt's Bus Rapid Transit (BRT) system, in preparation for its public debut. This initial phase stretches from the intersection of the Ring Road with the Alexandria Agricultural Road to the Police Academy Station. The BRT project is a major component of the government's plan to provide efficient, high-quality, and environmentally friendly mass transit solutions across Greater Cairo. Prime Minister Madbouly emphasized the strategic importance of the BRT system, describing it as one of the most significant environmentally sustainable public transportation projects under development. He stressed that it will improve the daily commute for thousands of citizens by offering reliable, electric-powered, zero-emission buses. Minister Al-Wazir highlighted the project's alignment with President Abdel Fattah El-Sisi's vision to develop a modern, integrated, and eco-conscious public transport network. He noted that the 35-kilometer trial phase of the BRT has already begun serving commuters along the Ring Road and is expected to play a key role in reducing congestion by encouraging a shift away from private vehicles. The BRT corridor will connect major intersections along the Ring Road, including Suez, Adly Mansour, Marg, and Mostorod, and is envisioned as a vital link between the eastern and western parts of the capital. It will also provide a fast, direct connection to the New Administrative Capital. Moreover, the system will integrate with other transportation modes by linking to Metro Line 1 at Zahraa and Marg stations, Metro Line 3 at Adly Mansour and Imbaba, and the Light Rail Transit (LRT) at Adly Mansour. The tour began at the station located at the intersection of the Ring Road and Alexandria Agricultural Road. There, the Prime Minister and the Minister received a briefing from project manager Mahmoud El-Sheikh on the system's development stages. El-Sheikh explained that the full BRT network will extend 110 kilometers and be executed in three phases, incorporating 48 stations, a main charging depot, and three auxiliary charging stations. The first phase, which is set to open soon to the public, includes 14 stations running from the Alexandria Agricultural Road to the Police Academy. These stations consist of a mix of non-standard, surface, and sub-surface facilities, designed to ensure accessibility and safe pedestrian movement. Among them are Adly Mansour Station, two surface stations with pedestrian bridges at Bahtim and the Police Academy, and 11 surface stations equipped with pedestrian underpasses serving key districts such as Shubra Benha, Mostorod, Marg, and Suez Road. El-Sheikh also reported that work on the second phase is underway, which will add 21 stations between El-Moshir Tantawy and the Fayoum intersection. This section will include stops along the Mariouteya Axis—such as Haram, King Faisal, and Tersa—as well as a station near the Grand Egyptian Museum on the Alexandria Desert Road. The third and final phase will follow the completion of expansion works between the Alexandria Agricultural and Desert Roads, adding 13 more stations. During the inspection, Madbouly and Al-Wazir visited several stations along the route. At El-Qalag Station, they reviewed pedestrian tunnel access designed to connect the station to surrounding areas, including Mohamed Naguib Road. At Salam Station, a surface stop with tunnel access, they observed preparations to serve nearby residential areas, a bus terminal, El-Nahda City, and Salam Stadium. Their visit concluded at the Police Academy Station, which features a pedestrian bridge and serves Zahraa Nasr City, the First Settlement, and the Academy. In an unplanned stop during the tour, the Prime Minister inspected the newly developed Salam multi-level terminal, which has recently entered phased operation. Cairo Governor Ibrahim Saber provided an overview of the facility, developed by the National Roads Company. The terminal, located at the entrance to Salam City along the Ring Road, spans three floors and accommodates up to 2,500 vehicles. It supports 39 intergovernorate transport routes and 18 local service lines within Cairo. In addition, it houses 254 commercial outlets. Governor Saber noted that the terminal plays a key role in restoring order to the area. The Cairo Governorate recently removed informal street vendors from Sadat Square, refurbishing it with new lighting, pavement, and landscaping. The vendors were relocated to designated commercial spaces within the new terminal, providing them with legal, secure, and sustainable business opportunities through coordination with the National Company.
