New policy proposals in the Draft Law on Railways (Draft) aim to create a breakthrough change in the development of railway infrastructure, especially urban railways and high-speed railways.
New policy proposals in the Draft Law on Railways (Draft) aim to create a breakthrough change in the development of railway infrastructure, especially urban railways and high-speed railways.
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| Many new policies have been proposed to maximize resources for investment in developing railway infrastructure. In the photo: Hanoi Urban Railway Line, Nhon - Hanoi Station section. Photo: Duc Thanh |
Shorten time, increase investment efficiency
According to the agenda of the 43rd session of the National Assembly Standing Committee, this morning (March 10), the Draft Law on Railways (amended) will be placed on the agenda.
According to the Government's Proposal, one of the viewpoints in drafting the Law is to mobilize maximum resources to invest in developing railway infrastructure, in which the state budget plays a leading role, and to promote attracting economic sectors to participate in railway business.
Only regulating the framework issues of principle and contents under the authority of the National Assembly, the Draft consists of 8 chapters and 70 articles (2 chapters and 17 articles less than the current Railway Law). The Draft focuses on 5 policies on investment in development, management, exploitation of railway infrastructure, railway transport activities, connection of transport modes, development of railway industry and human resources.
Regarding the policy on investment in developing railway infrastructure, the Impact Assessment Report (attached to the Government's Submission) indicates that if the current regulations are maintained, railway infrastructure development investment projects from public investment sources may be prolonged, because when the project starts to be implemented, the site is not ready for construction, leading to increased costs, reduced investment efficiency, and delayed project operation.
There are many examples to prove this. The Hanoi Urban Railway Project, Cat Linh - Ha Dong line, is 8 years behind schedule and nearly 3 times over budget. The Hanoi Urban Railway Project, Nhon - Hanoi Station section, with a length of 12.5 km, started construction in 2010 and was expected to be completed in 2015. However, due to problems in site clearance for the underground section from Kim Ma to Hanoi Station, the project completion schedule had to be adjusted to 2027, with the total investment increasing from VND 18,408 billion to VND 34,826 billion.
Or like the Ho Chi Minh City Urban Railway Project, Ben Thanh - Suoi Tien route with a length of 19.7 km, started in 2012 and was expected to be completed in 2017, but in reality the completion time had to be adjusted to 2024, the total investment increased from 17,387 billion VND to 47,325 billion VND.
To overcome the above shortcomings, the proposed solution is to adjust and supplement regulations on investment in developing railway infrastructure. For example, supplementing regulations that local authorities at the provincial level take the lead and coordinate with specialized ministries to allocate appropriate land funds in areas surrounding railway stations for urban development, commercial service areas, offices, and hotels.
The draft also proposes to use local budgets to establish independent public investment projects to carry out compensation, support, resettlement, land recovery and auction of land use rights, underground space use rights, and overhead space in the land area around the railway station as a basis for implementing urban development projects according to the planning approved by competent authorities.
The next proposal is to allow the use of revenue from the exploitation and development of land funds around the station to be partially prioritized for reinvestment in the development of railway infrastructure. Specifically, for urban railways, localities retain 100% to develop economic and social infrastructure and key strategic works and projects (similar to the provisions in the Draft Law on the Capital Amendment). As for national railways (including high-speed railways), localities retain 50% for socio-economic development, and 50% is submitted to the central budget for reinvestment in the development of national railway infrastructure.
The draft also adds regulations for high-speed railway and urban railway projects under the authority of the National Assembly to decide on investment policies, allowing the Front End Engineering Design (FEED) to be carried out instead of the basic design during the feasibility study report preparation step.
Supplementing regulations on the rights and responsibilities of provincial-level local authorities to invest in the construction of railway infrastructure for regional railways and railway lines connecting to national railways is also a new policy.
The Government proposes to amend and supplement regulations for urban railway projects. After the investment policy is approved by competent authorities, the provincial-level local authorities are assigned to decide on project investment and organize investment implementation to increase the initiative and responsibility of localities.
Breakthrough transformation
The economic impact of the above policy proposals is, first of all, to create a breakthrough change for the development of railway infrastructure, especially urban railways and high-speed railways, according to the assessment of the Drafting Committee of the Railway Law (amended). For projects using the state budget, it will contribute to shortening investment time, reducing costs, and increasing investment efficiency.
The new policy also creates a mechanism for localities to effectively exploit land resources through applying the TOD model (transport-oriented urban development) to mobilize investment capital, develop railway infrastructure; improve land use efficiency within a 1 km radius around urban railway stations to develop urban areas (commercial centers, offices, housing, etc.) in the direction of combining diverse forms of land use, creating momentum for economic development.
“According to estimates, the high-speed railway line alone with about 23 passenger stations and the area that can develop services and urban development around the station is about 500 hectares/station, construction density of 55%, revenue from land exploitation is estimated at up to 230,000 billion VND,” the Impact Assessment Report stated.
Another positive impact to be considered is the effective promotion of land resources for urban development associated with railway development, reducing the pressure on public investment of the State. Along with that, it creates conditions for the State to be able to recover benefits from land rent differences when the State has invested in technical infrastructure and social infrastructure (including railway infrastructure). This is also the experience of countries applying the tool of recovering added value from land (LVC) in urban railway development. This solution is currently applied according to the model of re-adjusting the State's recovered portion and the right to develop real estate projects along the traffic route.
According to the Impact Assessment Report, the regulation allowing FEED to be implemented instead of basic design in the feasibility study report preparation step will shorten the implementation time of urban railway and high-speed railway projects by at least 2 years.
Enterprises have more opportunities to participate in investment, construction, management, exploitation and maintenance of railway infrastructure. Enterprises in the traffic hub area can not only exploit the benefits from the development of the railway line, but also from the profits from the operation of concentrated commercial centers and concentrated mixed-use offices, due to the maximum convenience value of the traffic hubs.
According to the program decided by the National Assembly, the Draft Law on Railways (amended) will be submitted to the National Assembly for comments at the 9th Session (May 2025) and approved at the 10th Session (October 2025). However, with the new provisions in the Law on Promulgation of Legal Documents, this law can be approved right at the 9th Session.
- Dr. Tran Van Khai, full-time National Assembly delegate, member of the National Assembly's Committee on Science, Technology and Environment
The amendment of the Railway Law needs to create a flexible and open mechanism to attract socialized capital in the form of public-private partnerships for railway projects. This is to reduce the burden on the state budget and at the same time mobilize resources from enterprises to upgrade railway infrastructure.
The draft revised Railway Law needs to complete the legal framework in the direction of decentralization, giving local authorities a greater role in planning and developing railways. Local participation right from the planning stage will ensure synchronous coordination, suitable to the socio-economic conditions of each region. At the same time, it will give local authorities more authority in investing in and managing railway infrastructure, helping local authorities to be more proactive in mobilizing resources for railway development in the area.
Source: https://baodautu.vn/tao-dot-pha-cho-phat-trien-ket-cau-ha-tang-duong-sat-d251471.html
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