June 21, 2010 / 5:18 AM / in 9 years

UPDATE 1-Vietnam rejects $56 bln bullet train project

(Adds quote, details)

HANOI, June 19 (Reuters) - Vietnam’s parliament has rejected plans for a high-speed railway project worth nearly $56 billion due to its huge cost.

The National Assembly at its closing session on Saturday rejected the project, which could use Japan’s bullet train technology, asking the government to re-submit the proposals at its next gathering, the Saigon Times Online newspaper said.

“As the National Assembly does not approve the policy on this investment in this session, so the government is assigned to prepare the project with more details for submission in the next assembly session,” the newspaper quoted Assembly Chairman Nguyen Phu Trong as saying.

Many delegates have expressed doubts about the economic viability of the mega project, saying its investment would account for nearly half of Vietnam’s gross domestic product so it will be a debt burden for the country in future.

The government had planned to start building the 1,630-km

(1,010 miles) track in 2012 for completion in 2020, which would use Japan’s Shinkansen technology to help cut the Hanoi-Ho Chi Minh City travelling time by a third to less than 10 hours.

Japanese companies like Kawasaki Heavy Industries Ltd (7012.T), Mitsubishi Heavy Industries Ltd (7011.T), Mitsubishi Corp (8058.T) and Sumitomo Corp (8053.T) had sought government support to adopt the technology, the Nikkei business daily reported in April. [nTOE63D096]

(Reporting by Ho Binh Minh; editing by Patrick Graham)

((ho.minh@thomsonreuters.com; +844 3825 9623; Reuters Messaging: ho.minh.reuters.com@reuters.net))

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