Why Are Billionaires Pham Nhat Vuong, Tran Dinh Long, and Tran Ba Duong Competing to Propose the North-South High-Speed Railway Project?

Since the National Assembly approved the investment policy for the North-South high-speed railway project, Vietnam’s infrastructure market has entered an unprecedented race. From industrial conglomerates and major contractors to small-scale enterprises, all are eagerly submitting proposals, expressing interest, or showcasing their commitment.

From an outsider’s perspective, this rush resembles a hunt for a “gigantic pie,” but upon closer examination, each slice reveals both significant profit opportunities and a chain of financial, technical, and policy risks that not everyone can navigate.

The North-South high-speed railway project spans 1,541 km across 20 provinces, with a total investment of approximately VND 1,700 trillion (USD 67 billion). Its structure comprises 60% bridges, 10% tunnels, and 30% embankments, averaging USD 43.7 million/km (VND 1,073 billion/km), comparable to global high-speed rail standards within the same speed range.

Billion-Dollar Race Among Industry Giants

Vingroup, through its subsidiary VinSpeed, has emerged as a prominent contender. The conglomerate, led by billionaire Pham Nhat Vuong, proposes to develop the entire route under a business investment model, with an estimated investment of over USD 61 billion (excluding land clearance costs).

Vingroup requests an 80% loan for the project, to be repaid within 30 years. The group pledges to complete construction within five years, without subcontracting or transferring the project, while significantly increasing localization and workforce training.

According to Nguyen Viet Quang, Vice Chairman and CEO of Vingroup, if VinSpeed directly invests, the state and society will benefit in multiple ways. Notably, the state would only need to lend 80% instead of funding the entire 100%, with faster capital recovery (30 years vs. 140 years).

Meanwhile, Truong Hai Group adopts a different approach: self-arranging 20% equity and raising the remaining 80% through loans and capital mobilization. Notably, the group will establish subsidiaries to attract additional domestic and international investment.

Based on meticulous resource and capability calculations, the project is expected to take five years for the Hanoi-Vinh and Ho Chi Minh City-Nha Trang sections, and seven years for the Nha Trang-Vinh segment. The group commits to project quality, timely disbursement, and local manufacturing of train carriages and locomotives by 2029.

While not aiming to be the primary investor, other enterprises are also actively participating, leveraging their strengths. For instance, Hoa Phat (HPG) specializes in producing standard railway tracks. Deo Ca has sent personnel abroad to learn tunnel and road construction expertise, aiming to apply decades of experience to the project. Many other companies in shipbuilding, signaling, technology, and construction are also ready to contribute.

However, not all participants will succeed. A recent government-business meeting highlighted a clear divide. Alongside established companies with strong capital mobilization and large-scale project experience, many newcomers with modest capital or small teams have registered, planning to rely heavily on loans or non-state budgets. Some have been warned about financial capacity or were unreachable for verification.

What Do Businesses Gain from Joining This Historic Project?

The high-speed rail project offers a significant opportunity for urban development around stations (TOD), likened to a lucrative “slice of the pie.” International experience shows that commercial areas, hotels, offices, logistics hubs, and satellite residential areas near stations often experience substantial value appreciation, becoming long-term revenue sources.

Thus, not only contractors and manufacturers but also real estate giants are actively participating to control land and develop station-adjacent projects, offsetting participation costs and generating long-term profits. For real estate developers, even a small plot near a station can transform into a multi-billion-dollar urban complex.

Another perspective highlights that participation, or even expressing interest, serves as a strategic signal, enhancing a company’s position in policy negotiations, opening international cooperation opportunities, and building core capabilities for future large-scale infrastructure projects abroad.

Additionally, plans like Hoa Phat’s Dung Quat rail factory or Vingroup’s establishment of VinSpeed and VinMetal are seen as opportunities to increase production, achieve economies of scale, and raise localization rates, thereby reducing future import costs.

Significant Opportunities, Substantial Risks

However, these benefits come with considerable risks. Financially, the project demands massive foreign and domestic currency mobilization. Interest rate fluctuations, exchange rates, and capital costs can distort financial plans. Smaller enterprises, if overly reliant on loans, may fall into a debt spiral, jeopardizing their overall business strategy.

The Ministry of Construction’s financial simulation shows that a state-lent 80% loan at a 1% interest rate would balloon to USD 64 billion after 30 years; at 5%, it would soar to USD 182 billion. Thus, even a slight interest rate variation could collapse the financial model from the outset.

A government submission underscores an unavoidable reality: no country has allowed private entities to fully invest in high-speed railways without substantial state support. Nonetheless, Vietnamese enterprises remain determined to participate in this national flagship project.

Technically, implementing a 350 km/h rail line across Vietnam’s diverse terrain requires stringent standards and advanced safety and control technologies. Errors in technology selection, standards, or technology transfer could drastically increase maintenance and operational costs.

The question arises: which enterprises possess the necessary capabilities, compelling technical profiles, feasible capital mobilization plans, reasonable localization strategies, and viable implementation solutions? A recent government-business meeting demonstrated the state’s efforts to listen to ideas, verify commitments, and ensure objective, impartial investor selection to avoid negative consequences.

In conclusion, the rush to participate in the North-South high-speed railway project reflects both the ambition and pragmatism of Vietnamese enterprises: the ambition to seize significant opportunities and the pragmatism in accessing land, contracts, and equipment value chains. The project will create a “pie” shared across multiple sectors, including construction, heavy industry, real estate, finance, and services. However, only enterprises with robust financial capabilities, practical technical expertise, and a commitment to transparency will truly be selected.