High-Speed North-South Railway: ‘It’s Time to Leverage Private Capital’

Leveraging Private Capital for Development

In an interview with
Tien Phong

newspaper, GS, TS. Bui Xuan Phong, former Chairman of the Vietnam Railway Economics and Transport Association, shared insights on the proposed high-speed North-South railway project. He highlighted the growing interest from private enterprises in contributing to this endeavor, aligned with Resolution 68 on private economic development by the Politburo.

Notably, VinSpeed has recently proposed to invest directly in the project, offering an alternative to traditional public investment or public-private partnership models. Even more impressively, they aim to complete the project in just five years, half the time of the initial plan.

GS, TS. Phong acknowledged that numerous Vietnamese contractors are eager to participate in the construction of this high-speed railway. However, he emphasized the complexities of railway technology, encompassing not only engineering and mechanics but also electrical, transportation, and economic aspects. The North-South high-speed railway project presents even more extraordinary demands.

“The challenge for Vietnamese enterprises aspiring to engage in this mega project lies in acquiring or transferring technology from developed countries with a strong high-speed railway sector,” expressed GS, TS. Phong. He added that learning from or hiring highly skilled foreign experts is also essential.

From a different perspective, transport expert Nguyen Xuan Thuy appraised the capabilities of Vietnamese private enterprises, highlighting their nimble organizational structures, decisiveness, and efficient budget allocation. Mr. Thuy expressed confidence in the potential for private enterprises to play a more significant role in the North-South high-speed railway project. However, he acknowledged the lack of experience among Vietnamese private enterprises in constructing high-speed railways, leading to the necessity of engaging foreign experts and architects who may not possess an in-depth understanding of Vietnam’s unique railway characteristics.

TS. Nguyen Xuan Thuy emphasized the importance of collaboration between the state and private enterprises in undertaking the North-South high-speed railway project.

According to Mr. Thuy, Vietnam’s railway sector has over a century of experience, offering valuable consulting and directional support to enterprises. Conversely, he suggested mechanisms to empower private enterprises to act independently in specific project phases.

“It’s time to harness the potential of private sector capital, dynamism, decisiveness, and stringent management in executing the North-South high-speed railway project,” asserted TS. Nguyen Xuan Thuy.

Opportunities for Localization

PGS.TS Nguyen Hong Thai, Vice Chairman of the Vietnam Railway Transport Association, shared with
Tien Phong

that Vietnam considers the North-South high-speed railway project as a pivotal pillar in its industrialization and modernization agenda during this era of national advancement. The project is envisioned to rely primarily on public investment and minimize foreign dependence, presenting a substantial opportunity for Vietnamese enterprises to partake in the construction market valued at approximately $33.5 billion and to venture into the highly prospective railway industry.

However, undertaking a project of this magnitude comes with significant challenges in technology, human resources, finance, and legal aspects, posing complex questions for policymakers and the Vietnamese business community.

According to PGS, TS. Nguyen Hong Thai, the most formidable challenge for Vietnam in executing this project lies in multi-sector coordination. The Ministry of Construction needs to address a series of issues spanning various domains, including national defense and security, finance, investment planning, science and technology, research and training, integrated spatial planning for stations, regional planning, and foreign investment.

Vice Chairman Nguyen Hong Thai pointed out that Vietnamese enterprises aspiring to engage in the project’s construction must simultaneously tackle multiple challenges. For instance, they must meet world-class technical and technological standards, and the targeted speed of 350 km/h necessitates stringent design, construction, and quality control measures. Elements such as bridge girder deflection, dynamic interaction between trains and tunnels, and signaling systems must attain absolute precision…

However, in reality, Vietnamese enterprises currently lack a sufficient pool of high-caliber railway engineers to undertake this highly complex project, which demands absolute precision in technology and techniques and has no precedents in Vietnam.

“The North-South high-speed railway project not only presents an opportunity for Vietnam to significantly enhance the autonomy of its transportation infrastructure but also serves as a significant test of the capabilities and unity of domestic enterprises,” asserted Mr. Thai. He emphasized that with determination from the government, support from macroeconomic policies, and the spirit of creativity and proactiveness among Vietnamese enterprises, this project offers a chance to elevate construction capabilities and foster the localization of the railway industry in Vietnam.