The Vietnam High-Speed North-South Railway Project: Empowering Local Businesses

One of the current concerns is that Vietnam has not yet built a high-speed railway, and questions remain about the country’s ability to construct, operate, maintain, and, most importantly, master the technology for such a project. The proposal aims to address the challenge of mobilizing resources to enable Vietnamese enterprises (DNs) to participate in building the high-speed railway.

Mr. Tran Thien Canh, Director of the Vietnam Railway Administration, stated that the experience of other countries shows that high-speed railways will enable a nation to establish a railway industry and engage large conglomerates. For example, South Korea received technology transfers from France and then engaged large domestic industrial corporations such as Daewoo and Hyundai to form a consortium. They mandated that the French supplier sign a contract with this consortium for technology transfer.

In Vietnam, companies specializing in chips and electronic circuits, such as VNPT and Viettel, or automobile manufacturers like Truong Hai, can participate. They can not only produce electronic components, accessories, or automobiles but also contribute to the railway industry’s auxiliary industries.

According to the proposal, the planned high-speed North-South railway line is expected to have a structure comprising 60% bridges, 10% tunnels, and 30% ground. In terms of construction, the Vietnam Railway Administration leader shared that building bridges and tunnels requires advanced techniques, and domestic enterprises are now capable of handling 100% of the design and construction based on their experience with the North-South Expressway.

Regarding the train fleet, Vietnam has already upgraded all old carriages into high-quality ones, and there are two railway industrial facilities: the Di An Locomotive Factory and the Gia Lam Locomotive Factory, established during the French period. These factories are now equipped with modern machinery, including CNC cutting machines. Some iron and steel companies have expressed their ability to produce rail steel if given the opportunity.

The rail and switch complex is more complicated than the ray, but if the market demand is large enough, domestic enterprises can participate in researching, producing, and supplying them.

The most complex aspect is the information, signaling, and train control systems, with only a few manufacturers globally, such as Hitachi (Japan), Alstom (France), and Siemens (Germany). Even China has only achieved over 80% self-sufficiency and still relies on core technology providers.

According to a leader of the Ministry of Transport (MoT), one of the requirements for the high-speed railway project is for Vietnam to completely master the technology, including operation, maintenance, and replacement, and gradually produce some components. After consulting the experiences of 22 countries worldwide, especially the six countries with the most developed high-speed railways today (Japan, France, Spain, China, Germany, and South Korea), several nations expressed their willingness to transfer technology to Vietnam.

To facilitate the participation of domestic enterprises in the development of the railway industry, the MoT proposes creating a special mechanism to allow investors in high-speed railway projects, national railways, and urban railways to require general contractors and technology transfers. Investors can also request domestic enterprises to supply vehicles and equipment that can be produced locally.

Additionally, there will be conditions for technology transfers and training in operation and maintenance for five years. Local enterprises will be involved in assembling 30-40% of the carriages supplied, along with supplementary products, supplies, and railway industry equipment prioritized in the list of key mechanical products in Vietnam’s mechanical industry development strategy to enjoy preferential policies.

The proposal also suggests forming a consortium of domestic enterprises to receive technology transfers, research and development, master operations and maintenance, gradually produce components and replacement equipment, and assemble and manufacture new carriages.

“If provided with suitable technology transfers, Vietnam has the potential to develop the railway industry, move towards self-sufficiency and localization in manufacturing carriages, power supply systems, information, and signaling systems, and fully autonomously operate, maintain, and produce some replacement components for the high-speed railway,” said a leader of the MoT.

Allocating over $400 million for human resource training

Ensuring a skilled workforce to operate the high-speed railway is another challenging aspect of the project. According to the MoT, the proposal includes a training program for human resources in three forms (domestic, overseas, and combined domestic and overseas) and four levels of proficiency (technicians, engineers, masters, and doctors) for five subjects (state management agencies, project management units, operating units, training institutions, and research institutions).

The training will be funded by the project, with a total budget of approximately $348 million. Of this, the project operator will borrow about $340 million to train 13,880 personnel in management and operations and about $8 million to train 700 project management personnel.

Additionally, the proposal suggests allocating approximately $88 million from the project to train personnel for state management agencies, lecturers, and scholarships for students in specialized fields such as metallurgy, mechanical engineering, electronics, telecommunications, automation, and artificial intelligence. It also includes building shared laboratories to serve training, research, and development.

According to the MoT, after the construction is completed, the Vietnam Railway Corporation (VNR) is expected to be the unit responsible for managing, operating, and exploiting the entire infrastructure. They will be handed over all the means and equipment for exploitation and will be responsible for repaying the investment costs. As per the plan, the VNR will form two enterprises: one for management and business and the other for receiving investment means from the project for transport business.

The VNR leader shared that the enterprise is planning to prepare the necessary resources to manage and operate the high-speed railway. Once the proposal is approved for investment, the corporation will select some management staff and lecturers from the Railway College to undergo training first, followed by others. A training roadmap has been developed according to the project’s implementation progress, with different training durations depending on the position and tasks.

“The most time-consuming training is for train drivers. The VNR will select young train drivers with experience in operating conventional trains for training first. The entire line will require more than 700 drivers, but they will be trained in batches according to actual needs,” the VNR leader said.