North-South high-speed railway project: Why does VinSpeed 'know it will lose money but still do it'?

Responding to the press, VinSpeed representatives frankly identified this as a project of dedication, done out of a desire to contribute to the country, not just to seek profit.

Not just for profit

At a recent meeting with ministries, the Prime Minister requested research units to propose the construction of VinSpeed's high-speed railway. Responding to the Prime Minister's direction, the Government Office announced that ministries and agencies basically support and welcome VinSpeed's proposal to invest in the North-South high-speed railway project.

Agreeing with the above view, many experts expressed their welcome when a private enterprise pioneered investment in one of the most difficult projects in Vietnam.

“ This proposal from businesses is very encouraging, as they are willing to shoulder major national responsibilities, even accepting risks ,” said Dr. Le Xuan Nghia, former Vice Chairman of the National Financial Supervision Committee.

Associate Professor Dr. Tran Dinh Thien also emphasized his belief that Vietnamese private enterprises have enough potential and aspiration to not only accelerate infrastructure projects but also contribute to raising the national strength.

However, from ministries to experts, all expressed concerns about the possibility of prolonged losses and the unknown time of capital recovery of the project. In the world , high-speed railways are always a key lever to create a foundation for national development, but they are also "sure to lose money" with 98% of projects suffering high and prolonged losses after decades of operation. This has been proven in many leading countries such as Korea, China, Japan and many countries in Europe.

That is the reason, according to the Government Resolution, this project must start before December 2026. However, it is currently difficult to identify an enterprise as the investor as well as the operator. In that context, the fact that a business boldly proposed to invest in this project - according to Mr. Nghia - is a great contribution.

VinSpeed itself does not deny this fact. Responding to the press, Ms. Dao Thuy Van, Deputy General Director of VinSpeed High-Speed Railway Investment and Development Joint Stock Company said: " We have determined that this is a project of dedication and implementation because of the desire to contribute to the country, not just to seek profit ."

Will Vingroup make another miracle?

Although welcomed, some opinions have raised concerns that a newly established enterprise like VinSpeed has enough capacity to undertake and even need only 5 years - half the time compared to the original plan - to complete a national-scale project like the North-South high-speed railway?

Speaking about this issue, Dr. Le Xuan Nghia shared his confidence: VinSpeed can absolutely do it. According to him, although it is a new name, behind VinSpeed is billionaire Pham Nhat Vuong with the largest multi-industry ecosystem in Vietnam.

The expert especially emphasized the implementation capacity of the enterprises run by Mr. Pham Nhat Vuong, which has been proven through a series of large infrastructure projects - from the VinFast automobile factory built in 21 months, the Ring Road 2 ahead of schedule, to the national-scale exhibition center constructed in just 10 months...

“ Before VinFast, few people believed that Vietnamese people could make cars, but now they are the best-selling car company in the market with a current localization rate of nearly 70%. I believe VinSpeed also has that ‘miraculous gene code’ ”, Dr. Le Xuan Nghia cited.

Sharing the same view, lawyer Truong Thanh Duc, Director of ANVI Law Firm, Arbitrator of Vietnam International Arbitration Center - VIAC, emphasized: Choosing domestic private sector to build high-speed railway is to make it faster, more efficient and bring more benefits to the country, not to loosen control and avoid responsibility.

“ Instead of spending a lot of effort on direct investment and business activities, the State will better focus its resources on staying outside, standing above to build mechanisms, set conditions and carry out supervision and inspection to ensure the right goals and effectively serve the interests of the people and society, ” said lawyer Truong Thanh Duc.

Source: https://vtcnews.vn/du-an-duong-sat-cao-toc-bac-nam-vi-sao-vinspeed-biet-lo-van-lam-ar945443.html