Specific financial mechanism proposed for Vietnam Railways

Specific financial mechanism proposed for Vietnam Railways

The Ministry of Finance is drafting a decree on the operational and financial management mechanism for Vietnam Railways to create a legal basis for state capital investment and management.

The draft decree aims to strengthen decentralisation, reduce procedures, and unlock resources for the enterprise, while ensuring transparency and strict supervision in line with market economy principles and state management.

Photo: VNR

The draft proposes special mechanisms for the railway industrial complex project; management, maintenance, repair, renovation, and upgrading of national railway infrastructure assets; construction of commercial and office buildings at railway stations; and investment credit incentives.

The investment preparation process for the railway industrial complex project is subject to several specific policies as follows: Vietnam Rail (VNR) is allowed to consult domestic and foreign contractors and organisations regarding technology, reference prices, and potential risks during the project preparation process; this consultation must be transparent and must not provide an unfair advantage to any supplier.

VNR is allowed to decide on the use of foreign contractors for consulting and pre-implementation activities for the project.

Regarding the performance of tasks and orders for railway industrial services and railway industrial goods of the railway industrial complex, VNR is assigned and orders enterprises in which VNR has 100 per cent invested capital to perform all or part of railway industrial services and railway industrial goods in accordance with the law.

The draft clearly states that VNR is assigned the task of commissioning its dependent and independent accounting units, and commissioning its subsidiaries to carry out repairs, renovations, upgrades, and functional enhancements to national railway infrastructure assets using the company's own capital.

In cases where the state entrusts VNR with the management, maintenance, operation of national railway infrastructure, VNR shall implement initiatives to construct commercial service and office buildings within railway stations and on land designated for railways associated with stations through the selection of investors as stipulated in the 2025 Investment Law.

The MoF also proposes adding investment projects for the production, assembly, and procurement of various types of railway locomotives and carriages; specialised vehicles operating on railways; machinery and equipment for railway infrastructure maintenance; and mechanical components, systems, and parts for the production and assembly of locomotives, carriages, and railway transport vehicles to Section III – the list of investment credit loan projects issued with the government’s Decree No.78/2023/ND-CP from 2023, amending and supplementing a number of articles of Decree No.32/2017/ND-CP from 2017, on state investment credit.

At present, the draft is currently open for public comment on the MoF’s online portal.

VIR