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Da Nang Railway Connectivity Improvement and Urban

Redevelopment

Background. Da Nang is the fourth largest City in Vietnam and a major

urban center between Hanoi and Ho Chi Minh. The City serves a critical

regional transportation role at the convergence of National road, rail, maritime

and airway networks in a coastal position south of the mountainous Hai Van

Pass, where the country is almost at its narrowest (some 80km), hemmed in by

rising mountains to its west. The City’s position on Da Nang Bay at the mouth of

the Han River is historically significant as a favorable location for settlement and

trade, with an historic riverside city grid, port system and associated rail network.

Da Nang is also a rapidly growing 21st century City, almost doubling its

population in the last 15 years, to over one million in 2015. Rapid growth in

population has fueled demand for new urban development, improved

infrastructure and better services and facilities. Regional and city transport is

critical to orderly planning of the City as it evolves into a modern sustainable

place. The City has the vision to become “environment city by 2025”, focused

on addressing the important climate change and green growth agenda.

While Da Nang is readily accessible by sea, air and road, it is constrained in

terms of rail transit and station services and limited in its capacity as a major

National transport hub. The existing central station is located in a dense urban

center and is designed as a terminal (dead-end) station with switch-back

operations and a single track within a heavily encroached narrow right of way,

causing delays and adversely impacting the City function and economy. There

are also significant negative environmental and safety impacts on the urban

poor who live along the alignment.

Motivated by a desire to improve National productivity of the efficiency of

National railways, the Government of Vietnam has determined to realign the

railway corridor and construct a new national railway segment through Hai Van

Pass immediately north of Da Nang. This decision would move the central

station and related railway activities out of the City’s core and eliminate a

significant source of delay and unreliability for the majority of rail passengers

and freight, which must pass into and out of the City. Simultaneously, this

decision will free up extremely valuable land in the heart of the City for potential

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redevelopment, where there is the greatest demand for new urban growth.

The decision would also provide better land-side connections for the proposed

Lien Chieu port and associated industry to the north of Da Nang.1

Opportunity for urban regeneration. The multiple opportunities made

possible by the proposed intervention include:

a) Opportunity for improving the quality of life for city residents, particularly

the poor living along the rail alignment in dwellings encroaching on the

right of way—especially related to noise, environmental pollution, flooding

and safety;

b) Mitigation of adverse economic impacts caused by the slow, unreliable

railway operation and traffic disruptions at numerous (over sixty) roadway

and street crossings at grade;

c) Prospective site redevelopment of almost 20ha of reserved land at the

new station site and 12ha at the existing station site to promote transit

oriented, mixed use re-development and integrated spatial planning;

d) Provision of a new National rail station, providing improved public

transport services and inspiring investment in local business and

redevelopment potential around the new station surrounds.

e) Potential for the creation of a new Green Transit Corridor through reuse of

the former rail line as a dedicated public transit way between the new

station and the rapidly growing central City; and

f) Opportunity for urban regeneration around and in-between intermediate

transit stations located along the 6km public transit route between the

new and old station sites. These secondary stops provide the opportunity

for modest redevelopment and local area improvement that enhance

pedestrian connections and access into and around adjoining

neighborhoods;

g) Promote a new freight station to the north of the City at Kim Lien, close to

major industry with connections to the future Lien Chieu port and the

ASEAN region.

1 The existing Son Tra port is close to capacity and is not connected to rail.

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Figure 1: The project area—central city, new rail station and the transit corridor

Figure 2: The redevelopment concept

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The organizing principle. The key principles to be adopted to ensure

that the City is able to make best use of the opportunity to maximize integration

of infrastructure development with urban planning and upgrade facilities for

poor communities living along the current alignment are:

• Integrated Transport Planning (ITP) focused on coordinated delivery of

trunk infrastructure (ie., road and rail) in a way that adapts to the physical,

social and economic fabric of the City and ensure integration with the

municipal infrastructure;

• Transit oriented Development (TOD) focused on achieving mixed use

development around public transport, to bring together people, jobs, and

services in a way that make it efficient, safe, convenient and attractive to

travel on public transport and improve access to opportunities to support

City’s green growth agenda; and

• Pedestrian Oriented Design (POD) focused on the design and

presentation of public space and provision of services and facilities that

encourage convenient safe walking access to public transport and

associated development.

Application of ITP-TOD-POD principles for urban

regeneration. The proposed new station redevelopment and shift in the role

and function of both the existing rail line and station site represents a critical

opportunity to complement City’s growth and serve as an impetus for a holistic

urban and transport renewal program. The application of ITP-TOD-POD

principles is achieved in 2 phases, as follows:

The New Station Site

• The orientation of the new station site has its focus to the north-east and

the new CBD. In order to maximize the potential for TOD and investment

within the precinct, a 'radial' approach to development around the

station site is proposed, which implicates land within a total area of some

1km, including existing established villages, employment areas and

natural landscape areas.

• The new Station will be eminently connected to the existing urban

context. This is realized through a new road connection as an extension of

Nguyen Sinh Sac Street to the west to and across the rail line (as a tunnel

under the new Station). This has potential to better link the Station to its

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broader context and facilitate improved access to the new CBD and

DaNang Bay from the west and relieve congestion on Hoang Van Thai

Road as a principal western access.

• New high rise development presents an opportunity to develop areas

immediately around the station as TOD– in particular to its east side in a

series of stages, broadly arranged on a grid based block framework

comprising multiple separate parcels. A street based block arrangement

could accommodate a different composition of housing, office, retail,

institutional or other employment generating functions.

Figure 3: A connection between a new station and the existing City core

The Remnant Station Site & Rail Line

While redevelopment of the existing station site represents a key investment

opportunity in its own right, a successful ITP/TOD/POD approach inspires

neighborhood regeneration in the surroundings through improved connectivity

and access to services, specifically focused on:

• Integrated development around new rail station. The rail realignment

initiative provides an opportunity for neighborhood improvement of areas

within immediate walking distance of the station and rail line, currently

impacted by noise, congestion and constrained movement;

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• Improved infrastructure services for low income residential areas to the

west of the existing station along the existing rail line who currently have

limited access to public transport, poor connections to the CBD and other

drainage and sanitation services, which has resulted in constrained

income and employment opportunities;

• Mixed development around transit stations. The alignment of the existing

rail line to the west of the Hue T junction (bridge/overpass) passes through

informal settlement and some undeveloped areas, which suggest that

there is capacity for better neighborhood design over time. These areas,

and the broader urban precinct leading west towards the new station has

the capacity to achieve higher housing densities and mix uses around

potential new transit stations.

• A new public transit corridor linking the new and existing stations –

integrated with BRT. The potential reuse of the remnant rail as a ‘transit

line’, comprising pedestrian and cycle access and public transit presents

a ‘neighborhood renewal’ opportunity focused on transit stops at

perpendicular junctions 800m apart. It is possible to redefine the remnant

rail line as a new convenient public transport spine with regular transit

stops with interconnections into existing urban areas. This simple initiative

unlocks the potential of surrounding neighborhoods and assists in relieving

congestion at critical junctions. The designation of the corridor as a

‘Green Transit Corridor’ ensures successful connectivity between the new

dedicated passenger station and both the new and existing CBDs. The

resulting impact would contribute to the overall growth the City’s

economy;

• Encourage local activity nodes at intermediate stations around key

junctions. While significant attention must be drawn to the destinations at

each end of the corridor, significant opportunities also exist at regular

transit stations along the former rail line as a defined Green Transit

Corridor. At 800m centers, these provide the basis for perpendicular

connections into the route and meaningful local access and services.

Importantly, they provide a basis for a more modest level of TOD to be

enacted by local investors and businesses. This would promote

opportunities for PPP and contribute to City’s development;

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Figure 4: Opportunities for secondary station regeneration

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Public Transport & Access. The proposed rail relocation initiative will result in the

removal of rail services from the central CBD area, however it also serves as an

impetus for consideration of a new integrated City public transport system that is

more responsive to the needs of a growing population. The City's public

transport network currently consists of 5 bus routes which provide services to

residents living close to major roads only. A new BRT service is also approved

and awaiting implementation. Given notable planned growth to the west of the

City, the consolidation of the existing CBD and the acknowledged nexus

between Da Nang Bay and Da Nang Airport (which comprises the rail corridor

and 9 level crossings), there is potential to relieve congestion with a new transit

conduit along the rail line. This can also facilitate improved mobility within and

around neighborhoods along the length of the route. (Please see Figure 5):

Figure 5: Constraints and opportunities of the proposed design

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Potential Benefits. The benefits include:

• Improvements in the quality of life for city residents, particularly the poor

living along the rail alignment, improving long-term competitiveness,

productivity, innovation, lower prices, and higher incomes and contributing

to a greener and more sustainable city;

• Considerable potential for Land Value Capture (LVC) instruments to attract

private sector investment, promote high-density redevelopment along

transit routes and allow government to benefit or capture resulting increase

in property values;

• Reduction in passenger travel time for road users (resulting from relocation

of railway station, construction of fly-overs and tunnel at existing at-grade

intersections, construction of new roads, and provision of additional public

transport infrastructure, facilities, and BRT);

• Reduction in travel time of rail passengers (resulting from shortening 11.8

km of the trip by avoiding a loop in and out of the dead end station and

construction of flyovers at-grade intersections);

• Reduction in train operating cost (resulting from shortening of train trips by

4.3 km); and

• Reduction in traffic accidents and improvement in health and the

environment.

What makes Da Nang a City of Choice?

Da Nang is a city of national importance and has a long term development

partnership with the World Bank. The city has successfully prepared and

implemented complex multi-sector investment projects funded by the Bank with

both urban and transport dimensions. It has a clear long term development

strategy and good experience with environmentally sensitive economic

development and urbanization which it has shared with other Vietnamese cities.

The building of trust, confidence and mutual understanding between the City

and the Bank makes it possible to navigate complex issues and find satisfactory

solutions.

Da Nang is also a medium size city and is not yet faced with the urban problems

confronted by much larger other cities like Hanoi and Ho Chi Minh, which have

grown to seven and ten million population respectively, and expanded in an

unplanned manner with over dependence on private transport. As the

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residents adopt a life style based on private forms of mobility, it becomes more

and more difficult to retrofit to more sustainable public transport oriented city

structure. Opportunities for expanding road space become limited and

expensive due to associated cost of resettlement. This has resulted in

congestion, environmental degradation, pollution and a general decline in the

quality of life. In contrast, medium size cities are not yet confronted with urban

planning mismanagement and environmental degradation and offer potential

to learn from mistakes of the large cities. With good planning, growth can be

“managed” to ensure a balance between growing population and increasing

demands of infrastructure.

Da Nang offers an additional advantage in having a strong leadership and

good capacity for both planning and execution of multi sector programs, as

demonstrated in the past. Successful demonstration of restructuring national

railway alignment to boost economic growth and creating an opportunity for

spatial integration would also result in important lessons for replication in other

cities.

Rationale for Bank involvement. In addition to being a long-term

development partner with the City, the Bank would bring its experience in:

• Integrated, multi-modal land-use and urban transport planning

• Public transport operations and management

• Transit-oriented development

• Municipal finance development

• PPP

• Environment improvements

• Stakeholder management

• Provide a common platform for different stakeholders in government,

financial institutions and the private sector

This is no doubt an ambitious undertaking by the city and the country—high risk-

high reward scenario. A successful demonstration would pave the way for

application of the same concepts in other large Vietnamese cities which face

similar issues as well as providing an example for other cities throughout the East

Asia Region and beyond.

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Need for Partnerships

This is potentially a major and complex undertaking, costing over USD 500 million

and would require close coordination within the government at national and

city levels as well as the private sector, international financial institutions and

other stakeholders.

Coordination between national and City governments. In discussions with the

leaders of Da Nang City and representatives of the various Ministries, the Prime

Minister has agreed (Decision No. 363/TB-VPCP dated November 4, 2016) with

the main direction of the City’s development focused on improving investment

and trade environment, enhancing competitive capacity and developing a

strong city. This direction comes with a clear recognition of the importance of

the City in contributing to development and building strong infrastructure and

urban management. The Agreement recognizes a major increase in the City’s

GDP to 9.7 percent over the past year, increase in labor force participation rate

and a decline in income inequality. The specific focus of the Prime Minister’s

agenda is on developing Da Nang City as a strong service center, supporting

tourism and trade services and port operations. Towards meeting those

objectives, investments in railway relocation in the City commencing in 2017 was

specifically identified by the Prime Minister.

Coordination among financing institutions. Given the large resource envelope,

it is natural that multiple financial agencies—both international and local, will

need to form partnerships. Ensuring a basis of close cooperation, exchange of

information, and a common basis to make decisions would go a long way in

successful implementation.

Coordination among multi-sectoral teams. (a) Within the Bank. Successful

implementation of the proposed project design would require close

coordination across multiple sectors—especially urban, transport, and the

environment. It is important that within the World Bank, which is expected to

take a lead in managing this project, both urban and transport practices form a

strong partnership basis. This has already been happening in the past and there

is a strong need to maintain that approach; (b) Within the Government.

Coordination across central and city agencies and across multiple agencies in

the City is critical. The City has agreed to set up a Da Nang Infrastructure

Coordination Group, under the chairman ship of the PC and represented by

national Ministries and City agencies.

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Key Elements of Success

• Set up a formal arrangement to strengthen coordination between the

Center, City, and the Investors;

• Focus early-on on putting in place institutional and regulatory structures

suitable for project delivery and implementation;

• Presently there are no formal instruments in the Vietnamese planning

system to capture land value uplift. It appears that development

contributions are negotiated between the government and the private

sector on a site by site basis, with little clarity as to tangible measurements

or the distribution of benefits. Given the very considerable redevelopment

capacity of station (new and old site) side of land in the name and the

opportunity for substantive consolidation along at the stations and along

the green transit corridor, there is a strong basis for formalizing a LVC

program;

• Given the multiplicity of stakeholders including Departments and

agencies at national and city levels, the private sector, international

financial institutions, and the community, design consultative and

participatory process to develop a platform for sharing information and

providing feedback;

• Need to clearly define project scope and project cycle accounting for

risks and uncertainties;

• Given the scope and magnitude of the project, phase out investments

into manageable components, recognizing interdependencies among

different phases;

• Prioritize the set of investments and actions to be taken at both national

and City levels to ensure continued deliverability; and

• The principal of neighborhood regeneration and improvement of existing

low income housing areas requires extensive discussion with communities.

Outcomes such as improved linkages and transit improvements are

applicable to all areas, however the particular needs of individual

wards/districts should be based on a full consultative process.