The Underground King: Where’s the Money Coming From for Vietnam’s High-Speed North-South Railway?

Proposed Expansion of the North-South Expressway: Unlocking Vietnam’s Development Potential

Vietnam is experiencing an unprecedented wave of infrastructure development, with the government spearheading a series of national key projects. One of the most notable areas is transportation infrastructure, including the high-speed North-South railway with an investment value of $67 billion, the Lao Cai-Hanoi-Haiphong railway project totaling nearly $8.4 billion, and a strategic network of expressways and seaports. Among these, the expressway network is making remarkable progress, aiming to complete 3,000 km by the end of this year.

At the annual general meeting of shareholders on June 10, 2025, Mr. Ho Minh Hoang, Chairman of the Board of Directors of Deo Ca Group, announced that the company has proposed to the Ministry of Construction and the Government a plan to expand the North-South Expressway from an incomplete four-lane highway to a six-lane highway. The total investment for this project is estimated at VND 186,000 billion under a PPP model. If approved as the project’s investor, Deo Ca will undertake detailed feasibility studies and prepare the necessary resources.

Additionally, the group is proactively researching investments in other national transport infrastructure projects, including the Lao Cai-Hanoi-Haiphong railway and the Ben Thanh-Tham Luong metro line.

This year, Deo Ca plans to invest in PPP projects with a total investment of over VND 87,000 billion, focusing on key infrastructure projects: Ho Chi Minh City-Thu Dau Mot-Chon Thanh Expressway, Ho Chi Minh City Ring Road 4, Ho Chi Minh City-Trung Luong-My Thuan Expressway, Dong Dang-Tra Linh Expressway (phase 2), and Tan Phu-Bao Loc Expressway.

The group is also expanding its market reach and investment portfolio by venturing into high-speed railways, metro lines, airports, and electromechanical projects, with an estimated total project value of VND 15,000 billion.

Capital Increase to Participate in the North-South High-Speed Railway Project

According to Deo Ca’s 2024 financial statements, the group achieved consolidated revenue of nearly VND 9,650 billion, a 46% increase compared to 2023. Net profit reached VND 735 billion, a significant 14% surge year-on-year. As of December 31, 2024, Deo Ca Group’s total assets exceeded VND 50,000 billion, with a charter capital of over VND 4,200 billion. The company has also made payments totaling over VND 223 billion for principal and interest on the DCA12101 bond.

For 2025, Deo Ca sets ambitious targets, aiming for consolidated revenue of over VND 11,700 billion and net profit of VND 940 billion, representing growth rates of 21% and 28%, respectively, compared to the previous year. Additionally, the group plans to issue over 193 million shares to existing shareholders to increase its charter capital to nearly VND 6,800 billion. This additional capital will be utilized to strengthen working capital and fund strategic investments such as the expansion of the North-South Expressway in the East, the riverfront boulevard project in Hong River, and participation in TOD (Transit-Oriented Development) and high-speed railway projects. It will also ensure the group’s robust financial position to support long-term development plans.

In terms of capital mobilization, Deo Ca will contribute equity capital to project companies, with an expected value of over VND 600 billion. If successful in bidding for new PPP projects, the company will also contribute capital, with an estimated requirement of VND 438 billion for 2025.

Regarding construction and installation activities, Deo Ca continues to bid for transport infrastructure projects funded by the state budget and expressways to be completed in 2025. The group remains at the forefront of smart management and operation solutions, leveraging digital platforms.

Speaking about the quality and warranty of PPP projects, Mr. Nguyen Huu Hung, Vice Chairman of Deo Ca Group, shared: “In the past, when implementing PPP projects, we were concerned about the quality of the works because after the warranty period, usually 24 months, the contractors had almost no responsibility. The application of the PPP++ model has brought many advantages not only in capital mobilization and resource connectivity but also in ensuring project quality. With this model, the participating units act as both investors and contractors, investing in the products they construct, hence bearing responsibility from the outset and throughout the project’s life cycle. The guarantee for the warranty of the works is the capital contributed by the units to the project. This is one of the outstanding advantages of the PPP++ model.”