THACO proposes to build North-South high-speed railway project, joining forces with domestic enterprises

In an official dispatch sent to Prime Minister Pham Minh Chinh and Deputy Prime Minister Tran Hong Ha, Mr. Tran Ba Duong, THACO stated that the Politburo issued Resolution No. 68 on private economic development, then the National Assembly also issued Resolution No. 198 on a number of special mechanisms and policies for private economic development, encouraging the private economic sector to participate with the State in strategic areas, important national projects (such as high-speed railways, urban railways, key industries...).

As a multi-industry corporation, THACO decided to propose investing in the high-speed railway project on the North-South axis, and the National Assembly approved the project investment policy in Resolution No. 172.

In this proposal, THACO said it will prepare an investment project and request competent authorities to approve the investment policy according to Investment Law No. 61/2020/QH14, using its own capital and other legally mobilized capital sources.

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Mr. Tran Ba Duong. Photo: TC

THACO also informed that the group will apply rail technology, electrification, ensuring modernity and international standards on the principle: THACO and domestic enterprises cooperate to receive reasonable technology transfer from the world's leading experienced partners in Europe (Germany, France...); Asia (Japan, Korea...).

In addition, THACO also organizes training for personnel to master technology in infrastructure construction; production of locomotives and carriages; signal and control systems; management and operation of high-speed railway systems to proactively form the railway industry and through this project develop the country's fundamental industries such as heavy industry (metallurgy, mechanics), digital industry...

In particular, priority is given to coordination and joint ventures, cooperation with domestic enterprises and corporations for items and tasks that can be met domestically.

The total investment (including compensation, support and resettlement costs) of this project is nearly 1,714 trillion VND, equivalent to about 67.34 billion USD. Of which, the site clearance item is an independent project implemented by the State, not included in the total investment capital of the project. If this cost is not included, the investment capital undertaken by the enterprise is about 1,562 trillion VND (equivalent to 61.35 billion USD).

To carry out this investment, THACO will use its own capital and other legally mobilized capital sources.

Specifically, the capital portion corresponding to 20% of the total investment, equivalent to about 12.27 billion USD, is THACO's capital contribution (including equity and other legally mobilized capital) through the issuance of shares to increase capital for THACO and its member corporations, while still ensuring that Mr. Tran Ba Duong and his family hold the controlling shares of THACO.

At the same time, THACO will establish a company to implement the project and invite other domestic corporations and enterprises to contribute capital, in which THACO holds the controlling stake to jointly implement the project with the prerequisite of not transferring or assigning the project, capital contribution, or shares in the project implementing company to foreign countries.

The remaining 80% of the total investment capital, equivalent to about 49.08 billion USD, will be borrowed by the company from domestic and foreign credit institutions; the Government will guarantee and support all loan interest for a period of 30 years (the collateral is the entire project).

THACO has proposed to divide the project into two phases. Because the special nature of the high-speed railway requires high technology and engineering in metallurgy, mechanical engineering, construction, and especially integrated digital technology and control systems, security and safety factors in the construction and operation management process.

Phase 1 will be completed and put into operation within 5 years with 2 segments from Ho Chi Minh City to Nha Trang and from Hanoi to Ha Tinh, after the State hands over the cleared land. These are also two segments with large demand for passenger and cargo transportation to put into operation and exploitation.

Phase 2 will complete the entire project in the next 2 years, with the remaining segment from Ha Tinh station to Nha Trang station. Because this segment has steep terrain and complex geology, it needs time to research and find the most effective solution.

According to THACO Group, the proposal to complete the project in 7 years and divide the stages of the entire route is also to have time for domestic partners to study, learn, cooperate (joint venture, association) to receive technology transfer to participate in construction, production, installation and operation in a safe manner and achieve the highest efficiency for the project.

At the same time, there is enough time to form a railway industry, saving costs to reduce the total investment capital of the project to the lowest possible, thereby reducing travel costs (ticket prices) for people.

Previously, VinSpeed High-speed Railway Investment and Development Joint Stock Company also registered to invest in the North-South high-speed railway project. This company has a charter capital of 6,000 billion VND.

Accordingly, the project has an investment capital of about 1.56 million billion VND (equivalent to about 61.35 billion USD), excluding compensation costs, relocation support, and resettlement for site clearance.

Of which, VinSpeed is responsible for arranging 20% of the total investment capital of the project, equivalent to 312.33 trillion VND (about 12.27 billion USD). For the remaining 80% (excluding compensation costs, relocation support, and resettlement for site clearance), VinSpeed proposes to borrow State capital without interest within 35 years from the date of disbursement.

Also according to VinSpeed, to ensure a portion of the revenue is returned to the State, VinSpeed will cooperate with Vingroup and Vinhomes to propose the development of modern urban areas with full amenities in locations adjacent to railway stations according to the TOD (Transit Oriented Development) model.

Source: https://vietnamnet.vn/thaco-de-xuat-dau-tu-xay-dung-duong-sat-toc-do-cao-bac-nam-2405197.html