An Introduction to Vietnam's Transportation Infrastructure 2021

An Introduction to Vietnam's Transportation Infrastructure 2021

Vietnam’s economy is structured around investments, manufacturing, and exports. An important success factor of this growth model is efficient transportation infrastructure to handle increasing trade volumes.

The Global Competitiveness Index by the World Economic Forum has recently evaluated 141 countries in a variety of aspects, including infrastructure. Vietnam’s transportation infrastructure was largely in line with the global average and ranked 66th globally in 2019. Among the ASEAN bloc, Vietnam stood at the 5th position, only after more developed economies like Singapore, Malaysia, Thailand, and Indonesia.

Source: Global Competitiveness Index 2019, World Economic Forum

As Vietnam looks to increase its manufacturing capacity, it is crucial that its roads, airports, seaports, and rail connections can facilitate this increase. Recent years witnessed ambitious plans from the Vietnamese Government to expand and upgrade the existing transportation infrastructure system.

ROAD

The development of road infrastructure in Vietnam is lagging behind other countries when the Global Competitiveness Index 2019 ranked the country’s Road connectivity and Quality of road infrastructure respectively at 104th and 103rd out of 141 economies.

By 2021, more than 1,000 km of highways have been put into operation; nearly 600,000 km of national and provincial roads have been built, upgraded, and expanded; thousands of bridges and tunnels from primitive to modern have been present across Vietnam. However, nearly 93% of national roads remains two-laned (including the majority of national road No. 1A, stretching from the border with China in the very North to the Mekong Delta Provinces in the South via Ho Chi Minh City).

Source: Vietnam Directorate for Roads

In addition to national road No. 1A and the Trans-Asia highway, Vietnam is also progressing with the completion of Ho Chi Minh Road (known as Ho Chi Minh Trail during wartime). This 3,167 km long road will run parallel to the existing national road No. 1A to connect North and South Vietnam. Several major highways linking key economic regions have also been upgraded.

Cities are expected to alleviate pressure on existing road transportation and boost economic growth. Vietnam’s first metro line Cat Linh-Ha Dong has commenced operation in Hanoi since November 2021 and the second one is expected to start in Ho Chi Minh City by 2022.

RAILWAY

The competitiveness of railway infrastructure was ranked higher when Vietnam’s Railroad density and Quality of train services stood respectively at the 58th and 54th out of 141 countries in the 2019 Global Competitiveness Index.

The Vietnamese century-old North-South railway network has remained relatively unchanged for over a hundred years regardless of the incredible breakthrough of other means of transport. The entire network includes 7 main lines and 12 branches with a total length of 3,143 km (of which 2,703 km are the main lines and 612 km are stations and branches), extending across 34 provinces and cities. The system has 277 stations with 03 types of gauge: 1,000 mm gauge (85%), 1,435 mm gauge (6%), 1,000 mm and 1,435 mm cage-gauge (9%).

In general, the government has been focusing on exploiting short segments (800 - 1,200 km) and developing railways in places where sea transport is less advantageous. Currently, railway density stands at around 7.9km per thousand square kilometers. There are 2 railway routes that connect to the Chinese railway network: the Hanoi-Dong Dang route and the Hanoi-Lao Cai route.

However, the railway sector in Viet Nam accounted for only 2% of total freight movements and has been falling recently. Limited investment in the maintenance and upgrade of the existing railway network in Vietnam has left the network in poor condition relative to alternative transport modes, such as roads and coastal shipping, which provide greater flexibility and faster transport.

AIRPORT

Vietnam was among the top-performing countries in terms of airport connectivity according to the World Economic Forum, yet air transport services remained inadequately developed. In 2019, the country’s Airport connectivity and Efficiency of air transport services were ranked respectively at the 22nd and 103rd in the Global Competitiveness Report.

By 2021, there are a total of 22 airports in Vietnam with civil aviation operations, of which 11 are international airports and 11 are domestic.

In recent years, the country has witnessed a significant increase in air transportation. As the economy expands both domestically and internationally, the volume of freight and passengers carried by air transport has been increasing sharply. Key airports including Noi Bai International Airport (Hanoi) and Tan Son Nhat International Airport (Ho Chi Minh City) have both recorded overload situations in the last few years.

Therefore, the government is expanding and modernizing the airport infrastructure, most notably the ongoing construction of Long Thanh airport in the Southern province of Dong Nai. Upon completion, the new Long Thanh Airport will become the largest airport in Vietnam accommodating up to 25 million passengers and 1.2 million tons of cargo a year.

SEAPORT

Sea transport infrastructure in Vietnam is quite competitive when the World Economic Forum positioned Vietnam’s Liner shipping connectivity and Efficiency of sea transport services at the 19th and 83rd out of 141 countries.

Vietnam has a relatively developed seaport system from North to South with 45 seaports, divided into 6 groups based on their geographical location, with a total capacity of 600 - 650 million tons to cater to domestic and international shipping. Most of the activities take place in two of those groups, notably the Northern (Haiphong, Dinh Vu, and Cai Lan) and Southern (Ho Chi Minh City and Cai Mep-Thi Vai) ports.

In an effort to address the increasing demand of exporters, plans to upgrade and expand the existing capacity are underway, most notably the development of the Hon Khoai mega-port in Ca Mau province, South Vietnam. Once completed, the port will accommodate ships with a capacity of up to 250,000DWT.

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