HANOI, May 21 (Reuters) - Vietnam plans to invest nearly $1 billion in the next three years to transform its outdated railway system, by building new tracks for high speed trains.

Vietnam's rail system is slow and trains overcrowded. It takes more than 30 hours to make the 1,760-km (1,094 mile) journey from Hanoi in the north to Ho Chi Minh City in the south.

The government said in a statement at the weekend the three-year plan to spend 14.6 trillion dong ($907 million) called on foreign and domestic investors to form joint ventures with the state-run Vietnam Railways Corp.

It did not identify any foreign firms that have shown an interest in helping build new railways.

The investment for the whole sector that won government approval last week is separate from a major north-south project that would use Japanese aid.

In February, Prime Minister Nguyen Tan Dung gave approval to Vietnam Railways to build a $33 billion railway between Hanoi and Ho Chi Minh City over a six-year period that would cut the train journey between the two cities to less than 10 hours.

A single-track north-south line which dates from the era of French colonial rule at the end of the 19th century is the main route through Vietnam.

The railway sector is projected to handle 14.1 million tonnes of cargo and serve 20.7 million passengers in 2010, the government statement said.

Last year, the railways sector handled 9.2 million tonnes of cargo, a rise of 4.1 percent from the previous year, and also served 11.6 million passengers, a decline of 9.5 percent from 2005, government statistics show. ($1=16,103 dong)

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