The North-South high-speed railway project is an opportunity for Vietnamese enterprises to mature in the infrastructure industry ecosystem.

In December last year, the National Assembly officially approved the investment policy for the North-South HSR project. Later, in April this year, the government continued to issue the implementation plan for the project. Recently, the government has required the completion of contractor selection and contract signing before the expected project commencement date of December 31, 2026.

Vietnamese enterprises are fully capable

VinSpeed, a subsidiary of Vingroup, has just registered to participate in the North-South HSR project, with expectations to commence construction before December this year and have the entire line put into operation before December 2030. The proposed project has a total investment of about 61.35 billion USD, excluding site clearance costs. The company commits to arranging 20% of the capital, while the remainder will be borrowed from the government at zero interest rate for a 35-year term.

Previously, in October 2024, in a proposal document to the government, Deo Ca Group suggested implementing the North-South HSR project in two components. Firstly, the construction of bridges, roads and tunnels should be assigned to domestic enterprises, similar to expressway projects. Secondly, those concerning locomotives, carriages and signalling systems should be assigned to domestic enterprises in joint ventures with foreign partners. Simultaneously, Deo Ca recommended the prioritisation of domestic enterprises with management capability and specific achievements to take leading, connecting and training roles for other enterprises.

In reality, to participate in major projects like the North-South Expressway, large contractors such as Vinaconex, Cienco, and so on have also actively acquired international technology to proactively undertake high-tech contract packages. In the structural segment, Hoa Phat Group is researching train rail production, while THACO desires to manufacture train carriages. Notable is the involvement of two domestic technology groups VNPT and Viettel in researching control, signalling and electrical power systems.

At the recent seminar on the North-South HSR project, Ho Duc An, Technical Director at FECON, a major construction and infrastructure development company, affirmed that Vietnamese enterprises are fully capable of handling 70-80% of the construction volume. However, this mega project requires outstanding organisational capacity, inter-regional supply chain coordination capability, and use of the most advanced construction technology.

To prepare for the HSR project, the company has deployed four strategic action groups. First: participating in the development of supply chains and suppliers serving domestically and internationally. Second: preparing equipment repair factories and precast concrete component factories. Third: sending staff and engineers to learn directly abroad, participating in specialised training courses and large-scale project management courses to learn experience from partner countries worldwide. Fourth: promoting international cooperation and knowledge exchange to understand clearly the nature and technical requirements of the North-South HSR project, while preparing for construction technology transfer, especially advanced construction technology, to implement the project as quickly as possible.

“Participating in a project like the North-South High-Speed Railway is not just about winning bids or completing construction packages. It is an opportunity for Vietnamese enterprises to mature in the infrastructure industry ecosystem,” said An.

Mechanisms to create incentives needed

Although affirming this is not only for the railway sector but also opens great opportunities for the infrastructure field, Nguyen Quoc Hiep, Chairman of the Viet Nam Construction Contractors Association, stated that currently only about 20 domestic enterprises have sufficient conditions to access these large contract packages. The reason is that most Vietnamese enterprises are small in size, with limited financial capacity and technology, not yet meeting the high technical requirements of the project.

Therefore, in the immediate term, mechanisms are needed to create incentives for Vietnamese enterprises such as conditional direct appointment mechanisms, selecting units based on clear criteria. In the long term, solutions are needed to form contractor ecosystems through linkages between large and small enterprises to meet the entire supply chain in large-scale infrastructure projects like high-speed railways.

Chu Van Tuan, Deputy Director of the Railway Project Management Unit under the Ministry of Construction, stated that during the feasibility study report preparation process, the unit has directly worked with domestic contractors, coordinating with the Viet Nam Contractors Association to assess capacity, experience, and propose appropriate support mechanisms. The consistent guiding spirit is to design reasonable contract package structures, helping domestic enterprises participate substantively, from construction and installation to technical service provision.

However, this is a project with particularly high requirements for technical synchronisation and connectivity, not only in the construction phase but also in operation, maintenance, and system control. Therefore, contract package division must both ensure opportunities for domestic contractors and comply with international technical standards, the project's overall logic, and legal regulations on bidding.

In the requirement documents and tender invitations being drafted, the options being studied particularly note areas where Vietnamese enterprises have strengths, such as foundation infrastructure, bridge and tunnel construction, and auxiliary works. “Resolution 68 and government directives have very clearly established the spirit of prioritising domestic enterprises. We have the responsibility to concretise this by designing appropriate policies, contract package structures, and technical orientations,” said Tuan.

Acknowledging the efforts of the Ministry of Construction and relevant agencies and departments that have created many mechanisms to facilitate the railway industry, especially with construction enterprises, An believes there needs to be specific guidance on direct appointment criteria and early decisions on technology selection for the project so enterprises can prepare appropriate resources, equipment, and personnel.

Additionally, domestic enterprises participating in the railway industry also hope to receive support in land access, tax incentives and credit, creating conditions for accessing capital sources at reasonable costs to implement projects.

The government should sponsor research and technology transfer in the railway sector, as well as supporting human resource training. Reducing income tax for engineers and workers directly participating in HSR construction is also considered an incentive policy worth considering.

With these requirements, the government has directed the completion of a system of mechanisms and policies supporting domestic enterprises, creating conditions for enterprises with real capability to participate HSR projects. The Ministry of Construction is working with the Ministry of Finance to build a role division scheme and localisation roadmap, ensuring clear roles between private enterprises and state enterprises in the high-speed railway sector.

On May 17, the National Assembly passed a resolution on some special mechanisms and policies for the development of the private sector. Among these, to support the formation of medium and large enterprises and pioneering enterprises, the resolution stipulates that the government expands the participation of private sector enterprises in key national projects and important national projects.

Authorised persons and investors may choose to apply one of the forms of ordering; restricted bidding; direct appointment; or other appropriate forms according to legal provisions to implement projects and key national research tasks, including high-speed railways and urban railways. This provides a solid foundation for the domestic business community to participate more deeply in national key projects and then reach out to the world.