Research on mobilization and effective utilization of capital for high-speed rail system development in countries: Some issues for Vietnam

Abstract

The construction project of the high-speed rail (HSR) line on the North-South axis has extremely immense scale, with complex technical-technological standards, deeply and long-term impacting the country's economic and social development. This marks the first implementation of such project in Vietnam, thus requiring thorough and comprehensive research and evaluation. The selection of an appropriate financial mechanism is crucial to the project's success. The Vietnamese government is currently implementing a socialization policy in the transportation sector in general, and the North-South HSR project is proposed to be executed through a public-private partnership (PPP) model. In this framework, the state budget plays a leading and decisive role; external resources are deemed vital for breakthroughs. However, aspects such as how to mobilize funds, how the private sector participates, how it is managed, how the capital is repaid, whether to opt for limited-term transfers or lease of asset exploitation rights, over how many years... have yet to be addressed. Researching the mobilization and utilization of financial resources in countries with developed HSR systems, the authors observe varying investment and operational methods in each nation. Even within a single country, different financial models are applied in distinct phases. Alongside the successes achieved, there are instances of failed projects resulting in substantial losses. Hence, in addition to analyzing experiences in mobilizing and using funds for construction investment of HSR systems in other countries, the article also assesses the advantages and challenges for Vietnam. These are vital suggestions to aid the Vietnamese government in drawing lessons and selecting appropriate forms of mobilization and use of capital in line with the country's actual resources, exploiting the potential and advantages of the country.