High-Speed Dreams: Vinspeed Proposes a Revolutionary North-South Railway, Awaiting National Assembly Approval by May 20th.

Feasibility Assessment

On May 15, the Government Office issued a notification regarding Deputy Prime Minister Tran Hong Ha’s conclusion at the meeting on the proposal for investing in the high-speed rail project on the North-South axis by Vinspeed Railway Development and Investment Joint Stock Company.

Accordingly, on May 12, Deputy Prime Minister Tran Hong Ha chaired the meeting to discuss Vinspeed’s proposal.

After hearing Vinspeed’s report and considering the opinions expressed by the delegates present, Deputy Prime Minister Tran Hong Ha concluded that the Politburo has issued Resolution No. 68-NQ/TW on private economic development. This resolution encourages the participation of private enterprises in important national projects and invites the private sector to collaborate with the state in strategic areas and important national projects (such as high-speed railways, urban railways, and key industries).

At the meeting, the initial opinions of the ministries and agencies were fundamentally supportive and welcoming of Vinspeed’s proposal to invest in the high-speed rail project on the North-South axis. However, the proposed shift in investment format and the application of certain specific mechanisms and policies, especially for implementing this project, need to be reported to the competent authorities and fall under the jurisdiction of the National Assembly.

Regarding the draft resolution on piloting some specific mechanisms and policies for investing in the development of the railway system, Deputy Prime Minister Tran Hong Ha assigned the Ministry of Construction to review carefully the investor’s proposals, absorb the opinions of the Party Committee of the Government, and consider the suggestions of the ministries and sectors to perfect the draft resolution. The principle is to include in the draft resolution the policies that will be applied commonly and report to the competent authorities and the National Assembly before May 20.

Concerning the specific proposal for the North-South high-speed rail project, the Ministry of Construction is responsible for compiling and summarizing the proposals and opinions of the ministries and agencies, including the Ministry of Finance, the Ministry of Agriculture and Environment, the Ministry of Justice, and the State Bank of Vietnam. They will then report to the Government Standing Committee and the Party Committee of the Government for consideration before submitting it to the competent authorities for deciding on the policy to switch to the private investment format and the specific mechanisms and policies to be applied to the project.

The Ministry of Finance is assigned to carefully evaluate the contents related to its functions and tasks. Specifically, they should assess the feasibility of shifting from public investment to direct investment and evaluate the feasibility and the state’s ability to balance the capital source to lend to the enterprise as proposed by the investor.

Additionally, they should evaluate the specific mechanisms and policies proposed for the project, such as the state lending to private enterprises without interest for a term of 35 years, the project’s operation period of 99 years, the minimum fare by class, and the enjoyment of other investment incentives as prescribed by law…

Comparing the Two Options

The State Bank of Vietnam is responsible for reviewing, evaluating, and providing opinions to perfect the policy that the total debt of the project will not be counted in the total debt of the Vingroup’s borrowing according to the Law on Credit Institutions, as suggested by the Ministry of Finance.

The Ministries of Agriculture and Environment, Justice, Public Security, National Defense, Industry and Trade, and Science and Technology shall, in accordance with their functions and tasks, inspect, provide opinions, and assess the impact of the mechanisms and policies proposed by Vinspeed.

Regarding the progress of implementation, Deputy Prime Minister Tran Hong Ha requested that the ministries and agencies promptly express their opinions and make proposals according to their functions and tasks and send documents to the Ministry of Construction before May 19.

The Ministry of Construction will synthesize, report to the Party Committee of the Ministry of Construction, and submit it to the Party Committee of the Government before May 22. They will then report to the competent authorities and the National Assembly at the 9th session of the 15th National Assembly, with the permission of the competent authorities.

Vinspeed Railway Development and Investment Joint Stock Company is responsible for coordinating with the Ministry of Construction and the Ministry of Finance to finalize the investment plan and establish a comparison between the two investment options: state investment and private investment. This comparison should clarify the feasibility, completion progress, and investment efficiency, thereby demonstrating the advantages of private investment, such as faster, cheaper, and more effective implementation.

Vinspeed is required to collaborate with the following ministries and agencies: Construction, Finance, Agriculture and Environment, Justice, Industry and Trade, Science and Technology, and the State Bank of Vietnam, to clarify and perfect the specific mechanisms and policies to be presented to the competent authorities for consideration and decision-making.

The Deputy Prime Minister requested that Vinspeed fulfill its commitments regarding the proposed contents and develop a plan to build a railway industry system, taking the lead in fostering the development of the railway industry if approved by the competent authorities.