Investment scenario for the hundred billion USD railway industrial complex

The Railway Industrial Complex project with a capital of up to 17,509 billion VND will be an important boost for the railway industry to gradually meet the demand for upgrading and building domestic railway infrastructure of up to 275 billion USD by 2050.

Building new train cars at Di An Railway Factory ( Binh Duong province). Photo: AM

Clear roadmap

Only one and a half months after receiving the Prime Minister's request, Vietnam Railways Corporation submitted Document No. 1641/TTr-DS to the Ministry of Finance for consideration and submission to the competent authority for approval of the investment policy for the Railway Industrial Complex Project.

Previously, in Notice No. 157/TB-VPCP dated April 5, 2025, Prime Minister Pham Minh Chinh assigned Vietnam Railways Corporation to proactively preside over and coordinate with capable partners to prepare the dossier of the Railway Industrial Complex Project to serve railway projects according to the order, procedures and regulations to submit to competent authorities for consideration and decision.

The Hanoi People's Committee is assigned to study, consider and decide according to its authority to guide and complete procedures to hand over 250 hectares of land in Phu Xuyen district to Vietnam Railway Corporation according to regulations to study the construction of the Railway Industrial Complex.

“The scale of investment in the railway system in the coming time is very large, including: high-speed railway project on the North-South axis; Lao Cai - Hanoi - Hai Phong railway, urban railways in Hanoi, Ho Chi Minh City, and routes Lang Son - Hanoi, Hai Phong - Ha Long - Mong Cai... This is an opportunity for us to master technology and develop railway industrial production. The goal is to develop the railway industry by 2030 - 2045 (mastering the production of carriages, locomotives and the ecosystem related to the railway industry)”, Notice No. 157 clearly stated.

It is known that the most important highlight in Document No. 1641 is that Vietnam Railway Corporation proposed to the competent authority to assign the Corporation (currently a 100% state-owned enterprise) to receive the transfer of technology for manufacturing railway vehicles.

The State will invest 100% of capital in the form of increasing state capital at enterprises for Vietnam Railway Corporation to build a Railway Industrial Complex with an area of ​​about 250 hectares, in Phu Xuyen district and Ung Hoa district (Hanoi city) and purchase equipment to assemble and produce locomotives and carriages for railways with speeds under 200 km/h and urban railway systems.

Mr. Dang Sy Manh, Chairman of the Board of Directors of Vietnam Railways Corporation, said that the Group aims to produce domestically and gradually localize hardware and software components for information, signals and power supply systems; master all operations and maintenance work and gradually produce some components and spare parts for high-speed railways; receive technology transfer, invest in machinery and equipment and produce locomotives and carriages for national railways with speeds of less than 200 km/h, and purchase designs and manufacture for urban railways.

The project will also build functional zones to carry out major repairs to all railway vehicles and equipment, first of all national and urban railways.

Specifically, for urban railway lines and new railway lines, in the first phase (from 2029 to 2031), this Railway Industrial Complex will assemble electric locomotives and clean energy locomotives; produce passenger cars for railways with speeds under 160 km/h; assemble distributed electric power train units (EMUs) for urban railways; and produce freight cars with speeds of 120 km/h for the Lao Cai - Hanoi - Hai Phong railway line.

In the next phase (from 2032 to 2035), the Group aims to master the production of passenger cars and freight cars with speeds under 160 km/h; assemble electric locomotives, gradually increasing the localization rate to 30%; produce materials and spare parts for vehicle repair, infrastructure accessories, signal information, etc.

For the high-speed railway on the North-South axis, the Group will participate in assembling EMU trains under a procurement and technology transfer contract. By 2035, it will master the assembly technology and gradually increase the localization rate to 20%.

“The final destination is by 2040 - 2050, the Group strives to achieve 80% localization for EMU trains and produce materials and spare parts to serve the exploitation and operation of the high-speed railway on the North - South axis,” said the leader of Vietnam Railways Corporation.

The breakthrough of the railway industry

According to the proposal, the Railway Industrial Complex will be a multifunctional complex, including a factory for manufacturing and assembling vehicles, equipment, and spare parts; a research center; a repair and maintenance center; infrastructure connection to the national railway line and auxiliary works.

The total preliminary investment of the Railway Industrial Complex Project is 17,509 billion VND. Of which, public investment capital will be used to build a railway connecting to the national railway, technical infrastructure, research and development (R&D) center and other items supported by the State; additional state capital to the enterprise will be used to invest in the construction of an assembly plant and related items; at the same time, investors will be called upon to participate and cooperate in business.

If approved by competent authorities, the Railway Industrial Complex Project will prepare for investment within 1 year; construction will be implemented within 3 years to complete phase I in 2029.

It is estimated that the revenue that this complex will bring from 2030 to 2050 is about 228,102 billion VND; the average profit is 1,141 billion VND/year, helping the Project to recover capital in 16 years.

In Submission No. 1641, along with the proposal for the State to invest additional charter capital to have resources to build the Railway Industrial Complex and Railway Innovation Cluster, Vietnam Railways Corporation also proposed that the Ministry of Finance consider and report to competent authorities to allow a number of specific mechanisms and policies.

Firstly, adding products, materials, equipment, assembly products, manufacturing of locomotives and carriages (including electrified locomotives, EMU carriages, high-speed trains) belonging to the railway industry that need priority in the list of key mechanical products in the development strategy of Vietnam's mechanical industry as a basis for enjoying preferential policies.

Second, create maximum conditions for businesses, especially small and medium enterprises, to participate in providing products and services, forming a railway industrial ecosystem.

Third, supplement the List of technologies encouraged for transfer, including specialized machinery, equipment, and technology in railway industry development (technology lines, technology for manufacturing materials and spare parts) serving urban railways, high-speed railways, and electrified railways.

Fourth, put high-tech products of the railway industry into the list of prioritized high technologies to promote research and technology development in the railway sector, serving new projects.

“These are important conditions to ensure the feasibility of the Railway Industrial Complex Project,” said the leader of Vietnam Railway Corporation.

It should be added that the Ministry of Construction has initially completed the Draft Project on Orientation for Development of Vietnam's Railway Industry to 2030, with a vision to 2045, to seek opinions from relevant ministries and branches.

According to calculations, by 2050, the orientation of railway renovation, upgrading and construction activities, including urban railways and high-speed railways, is estimated to reach a total value of about 275 billion USD.

This is a huge market for the domestic railway industry to develop synchronously all 5 categories of work, including consulting, design and project management; railway construction industry group; railway information and signal industry group; locomotive, carriage, spare parts and accessories industry group; traction power system industry group...

“In the context that the Vietnamese railway industry only meets the needs of maintenance and repair with old technology, to achieve the goal of developing the industry of manufacturing carriages, locomotives and the ecosystem related to the railway industry by 2030-2045, the Railway Industrial Complex Project is an important boost, creating a premise for Vietnamese enterprises to participate more deeply in this important market,” said the leader of the Ministry of Construction.

Source: https://baodautu.vn/kich-ban-dau-tu-to-hop-cong-nghiep-duong-sat-hang-tram-ty-usd-d289588.html