VN sets rules for local firms to join $67bln rail project

VN sets rules for local firms to join $67bln rail project

With a total investment exceeding US$67 billion, the North-South high-speed railway is not only an unprecedented infrastructure project in Vietnam, but also a test of the private sector’s capacity to engage in large-scale public works.

The Government has issued Decree 319 introducing special mechanisms for technology transfer in key railway projects. — Illustrative photo. VNA/VNS

The Government has issued Decree 319 introducing special mechanisms for technology transfer in key railway projects, providing a solid legal basis for domestic enterprises to participate in the supply chain of the North-South high-speed railway.

With a total investment exceeding US$67 billion, the rail line is not only an unprecedented infrastructure project in Việt Nam, but also a test of the private sector’s capacity to engage in large-scale public works.

A central component of Decree 319 is the establishment of 10 specific criteria for selecting Vietnamese entities eligible for government-commissioned technology transfer orders. Qualifying firms must meet strict requirements regarding legal status, financial health, technical infrastructure, and workforce, as well as demonstrate the ability to master and advance technologies post-transfer.

These criteria are designed to vet capabilities and cultivate a core group of industrial players, a move aimed at gradually reducing the nation's reliance on imported technology and equipment.

By subcontracting on major infrastructure and ODA-funded projects in recent years, domestic companies have mastered essential construction technologies, including elevated rail lines and river-crossing bridges, according to Dr. Nguyễn Quốc Việt from the University of Economics and Business.

Major conglomerates such as Hòa Phát, THACO, Fecon Corp, and Viettel are already engaged in sectors matching their competencies, ranging from steel structures and rolling stock manufacturing to power systems, signaling, and control operations for the rail megaproject.

Positioning itself for upcoming Government orders, steel maker Hòa Phát is scheduled to break ground on a specialised rail steel production facility in Dung Quất on December 19. The project, valued at VNĐ10 trillion ($384.6 million), will span nearly 15 ha and feature a design capacity of 700,000 tonnes per year.

Assoc. Prof. Dr. Nguyễn Chi Sang, Chairman of the Vietnam Association of Mechanical Enterprises, said the decree allowing project owners to commission local enterprises offers a dual benefit. The shift is expected to lower import dependence and cut project costs by 10-20 per cent while generating hundreds of thousands of high-skilled jobs. To fully capitalise on this opportunity, he urged enterprises to deepen technology investments and leverage the leadership of major corporations to anchor a robust domestic supply chain. 

Bizhub