The Southeast Asian manufacturing hub has been ramping up public investments as one of its key drivers of economic growth, which is targeted at above 8% for this year and above 10% in 2026.

The 391km railway, with a price tag of 203.2 trillion dong (US$7.72 billion), will run from the border city of Lao Cai and pass through the capital Hanoi before reaching Haiphong, home to the largest seaport in northern Vietnam, the government said in a statement.

Construction work on the railway tracks will begin late next year, the government said, adding that the entire project will be completed by 2030.

Vietnam said early this year that it would receive loans from the Chinese government for the project.

The railway project is part of a giant spending plan involving 234 infrastructure projects with a combined investment of 3,400 trillion dong (US$129.23 billion), 18% of which will be funded by the state while the rest will come from other sources, including the private sector, it said.

The total investment includes already completed projects such as two hospitals in Ninh Binh, the expansion of Noi Bai airport in Hanoi and a military air base in Phan Thiet.

It also include new projects, such as the US$33.6-billion revamp of the banks of the Red River, a sports complex in Hanoi, a US$2-billion casino resort in Quang Ninh, as well as industrial park and housing projects.