1.1. THEORETICAL FOUNDATION OF TRANSPORTATION INFRASTRUCTURE DEVELOPMENT

1.1.1. Transport infrastructure

1.1.1.1. Infrastructure

"Infrastructure" is the basic physical factors and organizational structures needed for the operation of a society.

1.1.1.2. Transport infrastructure

a) Identification

Transport infrastructure is facilities - techniques for the transportation. These are structures such as roads, bridges, railwayline, stations, ports, airports... that serve the movement of transport vehicles or a place where these vehicles pick-up/drop-off or load/unloading goods conveniently, quickly and safely.

b) Classification

- Classification by mode of transport:

 

Figure 1.1. Classification of transport infrastructure by mode of transport. Source: [55].

- Classificated by levels of management: National transport infrastructure (national highways, central ports, central river, the national railline...); local transport infrastructure (provincial roads, district roads, commune road, rural roads, urban roads…)

- Technical classification: highways, technical level of road (level VI to level I), river level (level VI to level I), port types (I, II, III...). Base on technical standard, the transport infrastructures considered to be modern are the ones at large transport capacity, advanced operation or high efficiency, such as expressway, deep-sea port, airport grade 4...

1.1.1.3. Development of transport infrastructure

Development of transport infrastructure is a process of change in a positive direction on the quantity or quality of transport infrastructure service through the completion of the structure, policies and institutions in the investment and management of transport infrastructure, in which:

- Development of transport infrastructure in term of quantity, so-called developing in width, which is an increase in the number or length or width of roads, railways, ports, airports, station...

- Development of transport infrastructure in terms of quality is the change in factors relating to service quality of transport infrastructure, is usually expressed by the transport services (transport capacity, transport productivity, transportation costs, safety...).

1.1.2. Main characteristics of transport infrastructure

Transport infrastructure has some main characteristics, such as uniformity, high community, regional and local feature, architectural structure, pre-pioneer and long-term orientation, interactive operation of transports...

1.1.3. The role of developing transport infrastructure for socio-economic development

Transport infrastructure development impact on investment, labor, science and technology..., which are the basic factors of economic growth, create incentives for the development of transport infrastructure synchronously and modernly. This will promote economic growth, improve productivity and efficiency of the economy and enable to solve social problems. In many developing countries, lack and poor of infrastructure have caused obstruction in the flow of resources; difficult to attract investment affects economic growth, therefore, development of transport infrastructure is always a goal of all countries, especially developing countries like Vietnam.

In addition, transport infrastructure is one of the parts contribute to the connection factors of the production process. The economy will get more efficient when their productions are based on the comparative advantages of geography, along with methods to develop a reasonable economy to the scale and scope of the objects. The difference in capital and labor productivity will highlight the effectiveness of the distribution of resources, which should also be understood that in some aspects, the socio-economic development is the development on transport infrastructure through the allocation of resources appropriately and improve the quality of facilities development.

Figure 1.2. The role of transport infrastructure development for the socio-economic development. Source: Author.

1.1.4. Factors affecting to the development of transport infrastructure

The factors affecting to the development of transport infrastructure are elements of natural conditions; economic factors; population factors; science, technology and transportation organizations factors; state mechanism and policies factors; and other factors.

1.1.5. The indicators of transport infrastructure development to meet the requirements of industrialization and modernization

a) The concept of industrialization and modernization

Industrialization and modernization is a process that covers all sectors and areas of socio - economic of each country with the common goal of promoting economic growth rapidly and sustainable social development, improving life conditions.

In socio-economic development, the transport infrastructure is not only a determinants element but also a constituent element of national economy towards modernization and industrialization. It is said that with the development goal, there is a certain requirement to development of transport infrastructure respectively.

b) The requirements of modernization for the development of transport infrastructure

Meeting the transportation demands accordantly with the country's economic growth in each period; building transport infrastructure modernly; rationally using  natural resources, land and taking the international competitive advatages in transportation development; making appropriate policy management mechanisms to each mode of transport.

c) Indicators

c.1) Quantitative indicators

-  Comprehensive indicator: (1) Coefficient of elasticity, which means the correlation transport demand consistent with economic growth.

- Indicators on infrastructure network: (2) the length, density and highway rates. (3) The length, density, ratio of paved road. (4) The length, density and rate of high-speed rail. (5) The length, density of railway. (6) The length, the rate of major rivers which is managed for transport operation.

- Indicators of construction terminal or hub: (7) Length of berth and number international transshipment ports, (8) Airport Level 4.

c.2) Qualitative indicators

(9) The synchronized. (10) The connection. (11) The international competitiveness. (12) The appropriateness of management capacity, operation and social-economic conditions.

1.2. EXPERIENCE OF TRANSPORT DEVELOPMENT IN SOME FOREIGN COUNTRIES

1.2.1. Development of transport infrastructure in some countries in the world

Development of transport infrastructure is in accordance with the level of economic development or otherwise economic development accompany the development of transport infrastructure.

Table 1.5. Statistical indicators of transport infrastructure development

Note: Above table does not statistic the specific conditions of nature countries  such as Brazil, Brunei, Hong Kong, Canada, USA, Singapore; the ASEAN  not included  countries with GDP /person lower than Vietnam.

Source: Author compiled.

1.2.2. Lessons and Policy on transport development from foreign countries

1.2.2.1. Investment policy

From the experience of developed coutries, it is necessary to take priority on developng transport infrastructure. The countries, which have hight rate of investment in developing infrastructure, such as South Korea (35%), Japan (36%), American (30%), are the ones having modern transportation infrastructure and highly developed economies

1.2.2.2. Policies to attract investment

a) For the development of road infrastructure

The investment should be made by the Government or private sector, but after all users are the subject to suffer the cost. Importantly, it is essential to build legal systems for the implementation of BOT projects and the protection and guarantee of the Government plays a vital role in the initial phase of the BOT projects and performance opportunities to attract funds outside the budget results

b) Development of other transport infrastructure

Saving the investment on the highly commercialized and high return construction for private sector. State shall invest in the areas the private sectors not interest.

1.2.2.3. The planning

Development planning of transport infrastructure is generally established with other sectors' planning to ensure consistency. The order of making, commentting and approving the transport infrastructure planning should be independent and longer-term implementation.

1.2.2.4. The management of construction activities

Raising responsibility of each economic agents to ensure equality and transparency

1.2.2.5. The failed lessons on policies of transport infrastructure development

Focusing on forecasting about transportation demand; identifying the role and interactive effect among modes of transport; transport infrastructure development policies should be independent from political pressure.

It should be critical to deternine right time to invest, should not be in rush.

Chapter 2

CURENT SITUATION DEVELOPING OF TRANSPORT INFRASTRUCTURE IN INDUSTRIAL AND MODERNIZATION PROGRESS IN VIETNAM

 

2.1. POLICIES OF VIETNAM GOVERNMENT ON TRANSPORT INFRASTRUCTURE DEVELOPMENT

- Development of transport infrastructure has always been a priority policy of the Vietnam Communist Party and the Government.

- Planning transport infrastructure development has been concerned.

- Many investment policies to develop transport infrastructure has been done.

- Management of projects of infrastructure construction transport has been renovated to improve management efficiency in developing transport infrastructure.

2.2. ACHIEVEMENTS

Thanks to the above positive policies, transport infrastructure systems in Vietnam has been expanded and upgraded. It is could be generalized the stage of development of transportation infrastructure as follows:

- 1995-2000: 5,436 km of national roads had been constructed and upgraded, 62.7 km new road bridge had been built, 1253 km railway and 7km rail bridge had been repaired. Many major transportation infrastructure projects were built, expansed and renovated. The important seaport in Haiphong, Saigon, Da Nang, Can Tho, the port on Thi Vai, Cai Lan river... had been gradually expanded and modernized, and the capacity through the port system reached 100 million tons / year.

- 2001-2005: 5,268 km of roads, 79,266 bride of highway, 555 km of railway, 7,435 m of rail tunnel, 6800 m of railway had been built and upgraded; 6014 m of jetty was completed and put into use, dredged  4.8 million m3 of port and river flow of. 17/22 of airport including 03 international airports were put in used, total capacity at the airport has increased by 2 times in the 1995-2000 period.

- 2006-2010: 5100 km of roads had been built new or upgraded, new construction about 102 000 m of bridge; upgrading or restoring 90 km of railway; more than 8,500 m of seaport was completed and put into use; completely upgraded hundreds of kilometers of inland waterways; put into operation more air ports such as Dong Hoi, Cam Ranh, Can Tho; upgraded many major bridges, such as Bai Chay, Thanh Tri, Thuan An, Tu Hien, Rach Mieu...

Table 2.2. Summary of basic indicators for developing transport infrastructure

Source: Author calculated and collected.

2.3. POSITIVE EFFECTS OF INFRASTRUCTURE TRANSPORT DEVELOPMENT TO SOCIO-ECONOMIC DEVELOPMENT

In recent years, development of transport infrastructure has had positive impacts on socio-economic development, specifically: improving the transport capacity, thus increasing revenue for the transport sector generally and increase the added value of industrial production of transport, contributing to increase the total social investment and facilitate economic growth; an important contribution to reduce traffic accidents and limit transport congestion to improve science, technology.

2.4. RESTRICTION ON DEVELOPMENT OF TRANSPORT INFRASTRUCTURE MEET REQUIREMENTS OF INDUCTRIALAZIAN AND MODENNIZATION

2.4.1. Overview of the limitations

2.4.1.1. Road infrastructure

The road network is fairly distributed by areas but limited of capacity, 60% of length is two lanes and less. One of the weaknesses of road network in Vietnam is lack of uniformity between all levels by function; technical condition of the road system is not high, especially the new highway in the infancy stage.2.4.1.2. Railway infrastructure

Railway infrastructure not yet meet the demand because of weak bridge and many intersections with roads; single narrow track (except for some sections ) with low capacity (maximum up to 25 double trains / day), there is no high-speed or electrification section; service quality of station is bad and inconvenient for transportation.

2.4.1.3. Sea port infrastructure

Existing sea ports are mainly small scale with poor equipment of loading and unloading; there is no international transit or gateway port for over 80,000 DWT container ship. Infrastructure is lack of synchronization techniques, lack of equipment loading system, connecting infrastructure (road and rail ...) between the ports with the national transportation system is weak.

2.4.1.4. Inland waterway infrastructure

The biggest problem of inland that's waterways is not the same technical level of and there are lots of small curves. Some route clearances are limited by low bridges.

2.4.1.5. Airport infrastructure

Many airports are incapable to receiving aircraft at night or in bad weather. Especially among 22 airports, there is no modern international airport level like 4F, while some neighboring countries have new modern one, such as Changi airport (Singapore), Suvarnabhumi airport (Thailand), Incheon airport (Korea).

2.4.2. Comparison the development indicator of transport infrastructure in Vietnam to international

Transport infrastructure of Vietnam is still undeveloped. Compared to international, Vietnam transport infrastructure is still be backward and low service quality, such as: the density of paved roads is about 220km/1000km2, 0.9 km/1000 person that is much lower than developed countries (Min : 1527km/km2); 6km/1000 people); running speed of trains is still low and limited capacity; new expressway is in infancy stage; no international transit port for container ships of 80,000 DWT; no hub of international airports; connections between modes of transport are not synchronized, especially to/from major port and airports, that occur congestion; length of managed rivers from natural conditions is limited; organizing logistic is backward ... therefore, some experts have identified Vietnam traffic situation transport is equivalent to Japan in 1960.

2.4.3. The causes of the limitations

Thinking on development in general and the thinking on infrastructure development in particular are slow renovation; Executive management at the macro level of infrastructure development is still inadequate; Regarding the planning and development planning on transportation infrastructure lacks cohesion and is synchronous; Investment policies for development of transport infrastructure is slow innovation; construction of transport infrastructure investments situation is unconcerned, loss, waste and inefficient; the infrastructure works are in slow progress of the project; miss coordination between the ministries, branches and localities in implementing infrastructure transport projects.

 

Chapter 3

SOME SUGGESTIONS FOR DEVELOPING TRANSPORT INFRASTRUCTURE TO MEET REQUIREMENTS OF INDUSTRIALIZATION AND MODERNAZATION IN VIETNAM

 

3.1. BACKGROUND AND OBJECTIVES IN INFRASTRUCTURE DEVELOPMENT TO MEET REQUIREMENTS OF INDUSTRIALIZATION AND MODERNAZATION IN VIETNAM 2020, VISION 2030

Vietnam is in the process of accelerating industrialization and modernization with the aiming to become an industrial country toward modernization in 2020. The strategy of economic development – social in period 2011 - 2020 pointed out the views: Fast development should be associated with sustainable development, in which: developing  economy sustainably, maintaining macroeconomic stability and ensuring economic security. Push to restructure economy, transform growth model  considering quality, productivity, efficiency, competitiveness is a top priority, focusing on developing in depth and developing knowledge economy. Economic growth must be combined in harmony with cultural development, progress and social justice, continuously improving people's life quality. Socio - economic development should be associated with environment protection and improvement, actively respond to climate change.

Hence, the main economic indicators are identified: Strive to reach 7-8% on everage per year of gross domestic product (GDP) growth. In 2020, GDP in comparing price was about 2.2 times higher than in 2010 and GDP per capita at real price reached about $ 3,000. Ensuring stability of macroeconomic development. Building efficient and modern economic structure of industry, agriculture, services. The proportion of industries and services account about 85% of GDP. The value of high-tech products and high-tech applications reached about 45% of GDP. The value of manufactured products accounted for about 40% of the total value of industrial production. Agriculture  developed towards a modernization, efficience, sustainability, with high added value products. Aggregate productivity factors contributed to growth estimated at 35% while reduced energy consumption per GDP from 2.5 to 3% / year. Practice thrift in use of all resources.

Thus, to achieve  economic growth objective, besides the task of continuing  market economic mechanism and human resources development orientation, improving economic infrastructure, including transportation infrastructure, plays a very important role.

However, the current international economies are in downturn with limited financial resources, which could affect the project of infrastructure, both from government sector and private sector. In small-scale economy as Vietnam, the ability to accumulate and invest is limited, the maintenance of savings in high investment demand would create pressure on ensuring macro-economic balance, affecting the overall development of the economy. Besides, the risks from economic recession and instability in the environment business can have negative effects in long term.

However, Vietnam is a high growth rate economy in recent years; rapid urbanization rate is also an opportunity to be able to attract more investments from foreign and domestic. Besides, Vietnam has a stable political situation, the government has clearly committed to minimize the risks and negative effects caused by corruption problems. International reliable partner has committed a stable investment policy  (especially Japan) to invest in the field of transport infrastructure. Simultaneously, Vietnam has an advantage due to underdeveloped transport infrastructure, it would have opportunity to learn from international experience, and easily go straightly to the advanced technology infrastructure with modern way.

With the above goal and context, to continue speedup economy grow steadily, transport infrastructure in Vietnam must be improved to meet transport demand in 2020 and 2030 respectively compared with 2010 in terms of passengers (280% and 650%) and goods (220% and 400%), in parallel to reduce the negative impacts on environment, economy and society.

Along with meeting domestic demand, Vietnam transport infrastructure needed to serve international on exploiting the advantage of geographical position. Through that, Vietnam would increase GDP from traffic services (seaport or airport for international transit).

Transport infrastructure should be developed modernly, consistently with the trend of international and regional levels to enhance operation capacity such as expressway roads, express railway, and deep sea port to be capable to receive international size vessels or modern airports. Effective use of existing transport infrastructure networks base on reasonable operation among transport modes in all local, national or international level. For example, national highways and motorways transport for the main transport corridors; local road is a role of traffic in each region or local area, avoiding highways for local transport; railway serve the transportation needs in average distance (120 - 600km) or connect to the major economic center with stable of transport demand; Seaway mainly undertake cargo import and export, long distance coastal route, especially the North-South transport; inland waterway transportation of goods for local with large amounts (coal, cement, fertilizer, building materials ...); Aviation serve passenger or high economic value goods transport in long-distance.

3.2. PROPOSED DEVELOPMENT OF TRANSPORT INFRASTRUCTURE TO MEET REQUIREMENTS OF INDUSTRIALIZATION AND MODERNIZATION IN VIETNAM UP TO 2020 AND ORIENTATION TO 2030

3.2.1. Some development indicator of transport infrastructure to meet the requirements of industrialization and modernization in Vietnam

3.2.2.1.  Road

Table 3.5. Road development orientations

 

Source: 2008: [5]. 2020 and 2030: Author calculations.

 

3.2.2.2. Railway

Table 3.6. Railway development orientations

 

Source: 2010: [4]. 2020 and 2030: Author calculations.

 

3.2.2.3. Sea transport

Table 3.7. Seaport development orientations

Source: 2010: [4]. 2020 and 2030: Author calculations.

3.2.2.4. Airport

Table 3.8. Airport development orientations

Source: 2010: [4]. 2020 and 2030: Author calculations.

3.2.2.5. Inland waterway

Table 3.9. Inland waterway development orientations

Source: 2010: [4]. 2020 and 2030: Author calculations.

 

3.2.2.6. Commenting on the proposed orientations

Based on the above proposals, it would be tested preliminarily in network capacity as follows:

- Roads: Supposing that the average width of way is 4-6 lanes with expressway and 2-4 lances with road, the average speed highways is 100km / h and road is usually 60 km / h, expressway capacity would be roughly bigger 4 times than road, it means  2.700km of expressway is expected to meet the equivalent capacity of 10,000km of road. Then, capacity of 19.700km of expressways and national road in totally is equivalent to 27.000km of road (in which 17,000 km of national road). It is consistent with the hypothesis of without expressway, it would needed about 27.000km of road.

- Railway: Currently, Vietnam has signed cooperation agreements of railway development with China and ASEAN. But China's railway gauge (1435mm) differs from ASEAN (1000mm), Vietnam's railway development would need to implement in 02 steps: step 1, upgrading the existing railway (1000mm); step 2, building high-speed rail segment which is fairly in accordance with the process of integration and international cooperation (1435mm). From that, it should be careful to avoid falling into the unfortunate state of high-speed railway construction in China.

- Seaports: estimated total capacity of 900 million tones of port system in 2020 and 2,000 million tons in 2030, that is consistent to the underlying economic growth rate (at least 7%). It means that the targets of total length and productivity through of port system is also consistent with expected capacity requirements. The proposed deep water port for ships of 80,000 DWT is consistent with the world trend. The Central region of Vietnam has the most favorable location for developers to build deep-sea port, especially with can organize transportation connecting East – West.

- Airports: Building new airports 4F levels in the southern region which is connected to the effective exploitation of the Tan Son Nhat airport.

- Ability to finance the economy: average invested $ 4.5 billion / year, while the average GDP in this period is 152 billion / year (2010: 100 billion USD in 2020: 206 billion USD in 2030: 335 billion). Thus, investment in major transport infrastructure accounts for 3% of GDP, the rest of the supporting transport infrastructure is around 1% of GDP, the investment structure is quite suitable and ensures stability for the economy as stated by many financial experts. In case of high speed rail investment or investment in other transportation projects, it should develop funding policies to ensure the stability of the economy.

3.2.2. Suggested solution for transport infrastructure development to meet the requirements of industrialization and modernization in Vietnam until 2020 and vision 2030

 3.2.2.1. Strengthen and improve the quality of planning and feasibility implementation of planning

It is essential to unify transport infrastructures and other projects and improve the quality and feasibility of the project through setting Planning Law and establish the Planning monitor committee. Based on that, after revising the existing planning in all lever of national, regional and local..., Ministry of Transport sponsor to build detailed planning of the national, regional and local transportation works; assign local authorities to build local transportation works in accordance with national transportation infrustructure.

3.2.2.2. Effective management of existing transport infrastructure

Ministry of Transport would review and setup criteria framework of transportation demand, scope of service... for each type of transport infrastructure at  central and local management level in order to focus on essential and influencial transportation works.

3.2.2.3. Improvement of efficiency of state budget use 

Set up criterias for funding, priority in allocating capital for annual counterpart funds has committed to donors, investors (ODA projects, PPP projects) to get more extra-budgetary funds and to concentrate investment in essential transport works, having a high radical.

3.2.2.4. Increase funding from no-state budget

a) Set up reasonable revenue from providing transport infrastructure

Changing fees should be consistent with inflation, ensuring investors' interest is a prerequisite to attract more investment from non-state budget. Developing mechanisms of state revenue guarantee for investors while in fact investors could not achieve business revenue as the approved financial plan (State may guarantee for project if turnover is under 70%) bacause the infrastructure projects are long payback period, potential risks (traffic flow forecasting, interest rate ...).

b) Utilizing the funding for development of transport infrastructure

Accelerating equitization progress the state enterprises, building selection criteria and bidding investors and operators of transport infrastructure.

c) Combining the state and private budgets

Implemented and promoted investment by PPP method; Establishment of the maintenance fund for transport infrastructure.

3.2.2.5. Innovation of the management activities of state in transport infrastructure development

 a) The project preparation

Amending the current regulations on construction design costs to encourage saving investment, reducing environmental pollution, avoiding waste because consultants do not care to save the cost when they designed because the current consulting fees was proportioned to the total cost of construction and building survey database for each step of project preparation to prevent the waste by overlapping, especially, the geological survey.

b) The implementation of project

We should clearly define responsibilities of parties directly or indirectly involving in the quality management of construction works. Especially, we should clarify the responsibilities of the PMU in managing, monitoring the quality of projects because it is the investor's representative organizations which have an important affections directly to the success of project.

c) The site clearance

Defining the responsibilities of each participant taking part in project site clearance, setting up capital mechanism for site clearance from the local budgets (central support only) to avoid abusing the central budget.

d) The contractor selection

In order to well implement regulations bidding, it need to be public and transparent in the contractor selection stage and to speed up project implementation allows to appoint the suitable contractors in some cases: If the bid price is higher compared to the approved tender package price, the competent authorities would appoint contractor who has technical conditions, good financial situation to implement, bid price specified by the approved tender package price. It allows authority to appoint other contractor package if old contractors are behind the approved schedule which affects the whole project (additional subcontractors mode now take more time from the present procedures).

CONCLUSION

 

1. Transport infrastructure is a component of technical infrastructure, including transport networks, terminals and ancillary works. These are foundation for the vehicle operate on or places to load/unload. In order to evaluate the development of transport infrastructure, we could use the criterias, which are defined and calculated differently. However, to meet the requirements of industrialization and modernization, we would divide it into 02 basic groups: Qualitative indicators and  quantitative indicators, such as length highways, highway rates, length of river mining, ports and length of international transshipment ports, airports level 4.

2. To carry out the development objectives of transport infrastructure we should set up reasonable policies on planning, clearance, environmental protection and, especially, policies to attract investment that is appropriate to each type of transport infrastructure.

3. In recent years, development of transport infrastructure has made positive contributions to the socio-economic development but some notable limitations still exist, which obstructed the speed growth of socio-economic development... These limitations caused by planning, plans and investment policies, coordination between agencies in the management and administration...

4. To meet requirement of industrialization and modernization, we should raise the rate of paved road, restructure the type of road and build about 1400km and 2700km expressway in 2020 and 2030 respectively, modernize existing railway and gradually construct high-speed rail on the north-south axis, build deep-sea port, large transit international in Vietnam

5. To ensure feasibility in transport infrastructure development, it is critical to chang in thinking, mechanisms and policies of planning, capital using and administration..., especially, the policies on effectively using state budget and attracting investment capital from non-state budget. It is an urgent need to amend some legal documents on investment regulations, bidding, clearance... Thesis has proposed some new or innovative mechanisms document for government agencies to implement.

If th implementation of above strategies and solutions is succesful, we could hope that developing transport infrastructure would have positive contribution of socio-economic development of the country, bring Vietnam to become an industry and modern country up to 2020s.