Transport in Vietnam

The transport sector has contributed positively to the economic growth of Vietnam over the past decade and has helped reduce poverty directly through better linkages to markets, education and health facilities and indirectly through its contribution to growth.

This is evident from surveys indicating that investment location in northern Vietnam, for example, was heavily influenced by transport improvements. The impact on poverty reduction is reflected in studies showing that investing 1 percent of provincial GDP in transport infrastructure could reduce poverty by 0.5-1.0 percent and that an investment of US$50 million in transport in the 15 poorest provinces could reduce poverty by 6-7 percent.

Nevertheless, the transport sector faces several challenges such as the high traffic accident rates, new capacity constraints, and a large increase in asset preservation requirements to meet the fast expansion of transport assets. Other impediments reside in the sector’s policy, planning, budgeting, regulatory, and implementation frameworks.

Roads and Highways

The road network in Vietnam is 210,000 km, of which 17,300 km are national roads, 17,450 km are provincial roads, 36,400 km are district roads, and 7,000 km are urban roads. The remaining 131,500 km are rural roads.

Vietnam TransportHighways. The percentage of paved national roads is a useful indicator of the quality of a country’s most important road network. 84 percent of Vietnam’s national roads are currently paved up from 61 percent in 1997. The current percentage of paved national roads is reasonable by regional standards.

The condition of the network has also improved with the percentage in good condition increasing from 37 percent in 1999 to 45 percent (good and average 66 percent) in 2002. The improvement in the quality of the network appears to be largely driven by new construction rather than by the maintenance of the existing capital stock because expenditures on periodic and routine maintenance of national roads between 1998 and 2002 were less than half the of the maintenance needs as estimated by the Vietnam Road’s Administration in its Ten-Year Strategic Maintenance Plan.

Local Roads. It is generally difficult to obtain accurate information about the condition of provincial, district and commune roads and it is highly likely that there are large inter-provincial variations in the condition of local road networks. Nevertheless, provincial fieldwork, and evidence from on-going projects indicate that provincial roads in general are in poor condition. This is corroborated by the fact that, similar to national roads, local government expenditures on local road maintenance do not cover even half of the requirements for an average-condition road network.

Rural roads are no exception. About one quarter of the 83,000 km network is believed to be in good or fair condition and 58 percent of the provincial roads providing connectivity to the main network are in poor condition.

The administration of the road sector is complex with different agencies responsible for the financing and implementation and others for investment and maintenance. For national roads, investment finance is approved by the Ministry of Planning and Investment, implementation is the responsibility of the Project Management Units of the Ministry of Transport, and maintenance is undertaken by the Vietnam Roads Administration with funds channeled through the Ministry of Finance. For local roads, the complexity of the institutional arrangements is greater with the involvement of the provincial departments of transport.

Road traffic is mainly concentrated on national roads and around the major urban centers. Even though vehicle ownership is rising very quickly, car ownership is still low and road traffic is dominated by motorcycles. Rising levels of motorization is a major challenge to transport planners and policy-makers, especially in large urban areas and primary intercity roads. Traffic accidents increased dramatically from 1999 to 2002, but have shown a decrease from 2002 to 2003 (see table below).

VN road accidents through 2005

Implementation of Decree 13 adopted by the Government to improve traffic safety through education, awareness campaigns, driving tests, vehicle examination, monitoring and enforcement of traffic laws and improvement of black spots has been the main reason for the improvement.

While the death toll of 9.4 per 10,000 vehicles in 2003 compares favorably to other countries in Asia, data collection of traffic accidents is not yet adequate and the real number of casualties is likely to be much higher.

According to the National Transportation Safety Council of Vietnam, 80 percent of all accidents in 2003 were caused by poor driver behavior including 33 percent for speeding, 17 percent for dangerous overtaking, 16 percent for driver fatigue and 6.5 percent for drunken driving. The condition of roads and vehicles were a minor cause of accidents. About one half of road accidents were on national roads particularly those passing through populated areas and one quarter occurred on urban roads. The “urbanization” of road space in Vietnam is a major contributing factor to high accident rates as many people live within a few meters of the road side.

Urban Transport

Motorcycles are presently the primary mode of transport in the major Vietnamese cities. In both Ha Noi and Ho Chi Minh City, motorcycles account for 60 – 65 percent of vehicular trips, with bicycles accounting for another 25 percent.

Vietnam Transport

Automobiles account for less than 5 percent of trips in both cities and ownership is relatively low though growing rapidly. In HCMC, the number of registered automobiles increased from 137,000 in 2001 to about 245,000 in 2004 and 294,331 in November 2006. Buses account for about 7 percent of vehicular trips in Hanoi.

The road network is relatively limited and opportunities to increase road capacity in the urban areas is limited. Both the country’s major cities would face serious congestion problems if private auto ownership and use continues to grow in conjunction with currently forecast rates of economic growth. Up to November 2006, the number of automobiles grew to 965,455 (8.3 percent increase) and the number of motorcyles increased to 18,406,385, constituting a 14.1 percent increase.

This is well recognized by city leaders and both cities have stated policies prioritizing public transport and have plans to upgrade their bus systems and invest in new urban rail.

Urban road safety in particular is a problem. While statistics on accidents resulting in non-serious injuries are considered unreliable due to substantial underreporting, it appears that there are 800/900 road fatalities per annum in Ho Chi Minh City and 400/500 in Hanoi, 70 percent of which are cyclists or motorcyclists.

Rural Transport

Vietnam Transport

Project Profile: Second Rural Transport

The number of communes lacking access to district centers was reduced by more than half, from over 600 in 1999 to 269 in 2005. This represents slightly over 2 percent of Vietnam’s 10,602 communes.

Between 1999 and 2003, the national level of rural access has improved from 73 percent of the population being within 2 km of an all weather road to 76 percent, which is much higher than for other countries at similar income levels. This represents improved access for close to an additional 2.5 million people.

Given the evidence of the strong negative relationship between poverty and access, this increased access is likely to have contributed to the impressive poverty reduction in Vietnam.


The network consists of 7 lines with a total length of 2,632 km. All lines are single track, mostly meter gauge, with a few standard gauge and double gauge towards the Chinese border. There are over 1,800 bridges (57,044 m) and 39 tunnels (11,513 m) and 281 stations.

Vietnam TransportThe Vietnam Railway Cooperation (VRC) is the sole supplier of rail services in Vietnam. Following corporatisation, VRC’s internal business has been restructured into four main business groups: two passenger train operating entities (North and South), a freight train operating company and a looser grouping of regional infrastructure administrations. The train operating entities are quasi-independent management and accounting entities.

The Vietnam Railway Administration remains responsible for planning development of the sector, for new construction and for securing resources for maintenance. The VRC pays 10 percent of its gross revenues as a track access charge. These funds are generally used toward infrastructure maintenance.

Despite a network which is small, old and has received negligible investment for upgrading, the VRC has performed reasonably well. Vietnam does not have the concentrated flows of bulk raw materials or the long-distances which give rise to heavy rail freight flows. However, its eight lines serve high density passenger corridors.

Taking freight and passenger traffic together, traffic density is about 2.3 million traffic units/route-km per annum, which is relatively low compared to other countries in the region. The average passenger train load in Vietnam is around 370 passengers which are relatively high, but average freight load of 225 tons is low, as a result of low axle-weight infrastructure, short crossing loops and possible sub-optimal freight operating plans.

Inland Waterways

Vietnam TransportVietnam has 41,000 km of natural waterways, of which 8,000 km are used commercially. Of these, the Vietnam Inland Waterways Administration manages about 6000 km as well as the main river ports; local governments manage the balance of the commercial waterways.

River boats and barges have rapidly developed. In 1999, there were 63,600 units with a capacity of 1.7 million dead weight tons and 197,000 passenger seats. In 2003 this had increased to 83,000 boats with a capacity of 3.7 million dead weight tons and 280,000 passenger seats. In addition there are tens of thousands of small “country” boats and ferry boats.

Despite limited investment, the waterways remain attractive for the transport of coal, rice, sand, stone, gravel, and other usually high weight low value goods; and livelihoods and personal transport depend heavily and successfully on waterway transport in the delta regions of the Mekong and Red River.

The inland waterway system is managed by nine state waterway management companies; and river ports are managed by three port authorities. Inland waterway transport services are provided by state-owned enterprises operating under two state corporations attached to the Ministry of Transport Northern Waterway Transport Corporation and Southern Waterway Transport Corporation; specialized state-owned transport companies under other ministries carrying materials to cement plants, paper mills and construction material enterprises, and private for-hire operators.

Private operators have expanded their market share significantly in recent years. Foreign companies can provide transport services on the waterways through joint ventures in which the foreigner’s share does not exceed 49 percent. Freight and passenger transport rates are freely determined by negotiation.

Ports and Shipping

Vietnam has over 80 sea ports, totaling 22,000 m of wharfs with 2.2 million sq m of quays and 1 million sq m of docks. The large ports in Vietnam have traditionally been developed by the government through Vietnam Maritime Administration (Vinamarine) and turned over to Vietnam National Shipping Lines (Vinalines) for operation.

Local governments manage about 20 ports, and several national- or local-level state-owned enterprises operate specialized ports. The main ports are Hai Phong in the north and Saigon in the south, but both are estuarine ports, distant respectively 30 and 90 km from the sea, i.e. with access limited to smaller ships. The annual throughput of the ports has increased rapidly, almost doubling over the last five years, from 56 million tons in 1998 to 114 million tons in 2003. Ports in the southern Focal Economic Zone still account for two thirds of total throughput.

Vietnam TransportThere has been some foreign investment in the port sector. For example, the Vietnam International Container Terminal in Ho Chi Minh City is 90 percent foreign owned, the Interflour grain port (with capacity to handle Panamax vessels) in Vung Tau is a 100 percent foreign owned.

The fleet of vessels has also expanded from a total number of 679 and capacity of 1.6 million dead weight tons in 2000 to 928 vessels and capacity of 1.8 million dead weight tons in 2003; an annual increase of 12 percent and 4 percent in vessel number and capacity respectively.

Although port operations are divided among five separate companies, they are all part of Vinalines, which also operates seven shipping companies that account for the majority of the national fleet. Port charges pertaining to vessels are set by the Ministry of Finance and most of them do not vary from one region or port to another. Cargo handling charges are set by port operators, service providers or by negotiation.

While foreign ownership of ports is possible, there are restrictions on the provision of port and shipping services by foreign enterprises. With the exception of ship agency services which are not open to any degree of foreign participation, other services can be offered by joint ventures provided the foreign entities’ share in the enterprise does not exceed 49 percent.

Although still lower than in more modern ports of the region, port efficiency has increased and port costs have come down. According to Vinalines, throughput on container berths ranges from 20 to 25 units per hour in Saigon port and 30 units in the new port of Cai Lan in Quang Ninh province and general cargo throughput is 1,500 tons/gang/day. These compare very favorably with performance in other ports of the region. An international comparison reveals that the tariff at Saigon port is quite competitive with other feeder ports in ASEAN and China.

Air Transport

The Civil Aviation Administration of Vietnam (CAAV) handles civil aviation and is under direct authority of the government. There are 135 airports/airstrips for civil, military and police use in the country. The CAAV is responsible for 18 airports and air navigation services. The airports in the north, central and south handled 1.7 million, 0.8 million and 3.1 million passengers in 1998, respectively, which have been increasing rapidly to 2.5 million, 1.2 million and 5.1 million in 2002, respectively.

Vietnam TransportAir traffic grew sharply during the 1990s until the region was hit by subsequent financial and economic crisis. The volume of air passenger in 1998 was 2.3 million international and 3.3 million domestic passengers. In 2002, the Ho Chi Minh City and Hanoi airports (Tan Son Nhat and Noi Bai) reached a total of 8 million commercial passengers, of which 4.2 million were international and 3.8 domestic. In 1998, approximately 60,000 and 47,000 ton of air freight were carried by international and domestic flights respectively. In 2002, both international airports handled a total of 190,000 tons (including 2,000 tons of mail), 110,000 tons of international freight and 78,000 domestic freight. As the economy further diversifies and international regional linkages are strengthened, the demand is expected to increase sharply.

International airfares are proposed by the airlines and ratified by CAAV. There are two different domestic airfares: one is applicable to foreign citizens and overseas Vietnamese and other is for local Vietnamese. The maximum airfare to Vietnamese passengers on domestic flights between Hanoi and Ho Chi Minh City is decided by CAAV and the Government Pricing Committee and approved by the Prime Minister.

Two airlines, both members of Vietnam Airlines Corporation, operate in the country. The dominant one is Vietnam Airlines, which accounts for 37 percent of international traffic to and from Vietnam and 94 percent of the domestic demand. The other operator is Pacific Airlines which operates mainly between Hanoi and Ho Chi Minh City. It was established in 1995 and is jointly owned by the Vietnam Airlines Corporation and several other companies.

(source :


Leave a comment

Filed under Transport's Articles

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s