The Ministry of Construction has finalized the draft resolution outlining special mechanisms and policies for the North-South high-speed railway project. The draft has been submitted to the Ministry of Justice for review.
0% interest rate loans for up to 30 years
A key highlight is the Ministry’s proposal of financial policies, tax incentives, and unique regulations for public-private partnerships (PPPs).
Specifically, for business investment models, the government will provide loans covering up to 80% of the approved project investment (excluding contingency costs) at a minimum 0% interest rate. The loan term is capped at 30 years from the first disbursement date.
Investors must fully repay the loan within 30 years of the initial disbursement.
 Proposed financial incentives for investors in the North-South high-speed railway project. Image: Source |
For PPP projects, the government’s capital contribution is capped at 80% of the approved investment.
Domestic commercial banks are exempt from credit limit regulations for loans to investors. These loans will not count toward the bank’s total credit limit for the investor.
Investors are exempt from import taxes on machinery, equipment, railway vehicles, and related components or materials used for construction, upgrades, maintenance, or operation of railway infrastructure. This applies only if these items are not domestically produced or fail to meet project technical standards.
The draft also outlines specific PPP regulations. For the first three years of operation, a 100% revenue shortfall sharing mechanism is allowed if actual revenue falls below projections.
The government will prioritize funding from annual surplus revenue, remaining central budget allocations, or annual investment plans to cover revenue shortfalls. After the initial three years, revenue shortfall sharing will follow standard PPP regulations.
The project’s payback period is capped at 70 years.
No compensation for suspended or terminated investors
Regarding capital mobilization and disbursement, investors must submit a project implementation schedule and capital mobilization plan for approval immediately after receiving their investment registration certificate.
Investors are required to disburse at least 20% of their committed capital in each disbursement period until their contribution is fully utilized.
Failure to meet capital mobilization commitments or misuse of government loans may result in revocation of the investment certificate. Investors must compensate for any damages, losses, or expenses incurred.
Investors face suspension or termination without compensation if their activities compromise national defense, security, or result in severe operational failures due to poor quality management or non-compliance with guarantees.
Investors must provide collateral for government loans. Upon project completion, the collateral becomes project-generated assets. Investors cannot mortgage or pledge project assets for other ventures.
During project execution, investors cannot alter investment objectives or key project parameters such as track gauge, design speed, or load capacity.
The draft also mandates that investors prioritize domestically produced goods and services, require foreign partners to transfer technology and train Vietnamese personnel for management, operation, and maintenance, and gradually localize technology.
Tâm An
– 06:15 03/11/2025
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