High-Speed Rail: Opportunities for Vietnamese Businesses
In a recent proposal to invest in the North-South high-speed rail project, the investment alliance between Mekolor (Vietnam) and Great USA (USA) has stated that they can fund the project with 100 billion USD and are not seeking any special privileges from the government, including counter-capital funding or financial guarantees.
In an interview, Mr. Vo Xuan Truong, Chairman of Mekolor Joint Stock Company and representative of the investment alliance, made several attention-grabbing statements that are difficult to verify.
“We have thoroughly researched the North-South high-speed rail project and see a worthwhile investment opportunity. With our available resources, we believe we are capable of investing in this project alongside our partners,” said Mr. Truong.
He confidently declared, “If all goes well, the 100 billion USD investment can be recouped within 15 years of the project’s operation.”
To support his claim, Mr. Truong provided an example: “With Vietnam’s population of approximately 100 million people, we estimate that there will be around 60 million trips between the north and south annually via high-speed rail. If the ticket price is set at 50 USD per trip, the project is expected to generate roughly 3 billion USD in revenue each year. In addition, we plan to establish around 40 brands at 20 stations along the route, which will also contribute significantly to our income.”
Mr. Vo Xuan Truong, Chairman of Mekolor Joint Stock Company, chats with reporters at a cafe in District 4, Ho Chi Minh City. Photo: Tran Chung |
While well-known companies like THACO and VinSpeed are arranging self-funding for about 20% of the project’s capital, the alliance between Mekolor (Vietnam) and Great USA (USA) is confident about securing 100% of the required funds.
When asked about this, Mr. Truong replied, “I’m not saying that our financial capabilities are better or worse than others. Every unit has its own financial strengths and considerations. However, we can assure you that we have prepared the necessary resources for investing in the North-South high-speed rail project.”
The Chairman of Mekolor boldly stated, “We are ready to prove that we have 100 billion USD at our disposal. The funds will be continuously disbursed to ensure the project’s progress,” and acknowledged that as a new entity, they might be at a disadvantage compared to other potential investors. Nonetheless, he repeatedly emphasized their access to “readily available capital and technology partners.”
When pressed on how the alliance has arranged the claimed 100 billion USD, Mr. Truong referred to their proposed economic initiative named “One Mekong One Meal,” suggesting that the North-South high-speed rail line is just one component of this larger initiative and, therefore, falls within the already allocated funds.
He further claimed that the total capital mobilized for the “One Mekong One Meal” initiative amounts to 120,000 billion Euros, which is an unrealistic figure as it equals the world’s total GDP.
Addressing concerns about proving their financial capabilities, Mr. Truong assured, “We have a dedicated account for this investment project. In our reports to the government, we have included verified financial proof provided by a reputable top-10 global financial institution.”
However, when asked directly about the specific institutions involved, he gave a vague response, stating that it was “a reputable financial institution within the top 10 in the world.”
Mr. Truong also declined to answer questions about the alliance’s current business focus and last year’s profits, saying that this information would be disclosed in future reports to the government.
Many have dismissed the alliance’s proposal to invest 100 billion USD in the North-South high-speed rail project as unrealistic.
Undeterred by external skepticism, the alliance representative asserted, “We are not concerned with outside comments; we only seek the government’s attention and support.”
Mr. Vo Xuan Truong added, “Despite doubts and accusations of ‘hot air’ or ‘virtual capital,’ I speak on behalf of an alliance with American involvement, and we must abide by international law. This is no trivial matter; making false claims at the national level can lead to serious legal consequences.”
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Previously, VinSpeed, a high-speed rail development company, proposed investing in the North-South high-speed rail project through direct investment rather than public or PPP models. They committed to arranging 20% of the capital, equivalent to 12.27 billion USD (excluding land clearance costs), and requested the government to provide the remaining 49.08 billion USD as an interest-free loan for 35 years. VinSpeed also proposed that the government handle land clearance and promised to have the project operational within five years of construction. They suggested a minimum ticket price set at 60-75% of the maximum airfare. The proposed concession period is 99 years. Additionally, VinSpeed sought preferential treatment in the form of being assigned as the investor for several urban area projects near the railway stations. Meanwhile, THACO, an automotive manufacturer, offered to contribute 20% of the total capital (12.27 billion USD) through self-financing and legal capital mobilization within Vietnam. They plan to borrow the remaining amount of over 49 billion USD from domestic and foreign credit institutions. THACO requested a government guarantee and support for the entire interest expense over 30 years, secured by the project’s assets. They proposed dividing the project into two phases, with a completion timeframe of seven years. Regarding the business plan, THACO suggested that the government approve the ticket prices based on ensuring a feasible financial plan and timely capital recovery. They requested a concession period of 70 years and priority in allocating land for urban development following the TOD (Transit-Oriented Development) model. |
Tran Chung
– 19:45 09/06/2025
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