Submit to the Prime Minister important proposals on railway industry

4 main groups

According to the Ministry of Construction , the national railway network currently consists of 7 main lines and 12 branch lines, with a total length of 2,703 km. However, the railway industry - with the core being the Vietnam Railway Corporation (VNR) - has only stopped at the level of manufacturing, maintaining low-speed vehicles and manufacturing simple mechanical equipment with outdated technology. Although there are up to 35 production facilities, most of the machinery, components and equipment still have to be imported.

Therefore, the draft decision to promulgate the List of railway industrial goods and services submitted by the Ministry of Construction to the Prime Minister includes 4 main groups: Railway vehicles; information and signaling systems; rails, switches, connecting accessories; traction power supply systems.

These groups are divided into 15 essential goods and services that Vietnamese enterprises can be ordered or assigned by the State. According to calculations, in the next 5-10 years, the total value of these groups of goods and services can reach 15-20 billion USD, based on the development roadmap of national and urban railways.

According to calculations by the Ministry of Construction, in the next 5-10 years, the total value of these groups of goods and services could reach 15-20 billion USD. Illustration photo: AI.

The drafting agency said that the List was built based on the actual capacity of domestic enterprises, especially units in the fields of mechanical engineering, electricity - electronics, information technology, energy and vehicle manufacturing and assembly.

Several large corporations such as Viettel, VNPT, Vingroup, THACO , Thanh Cong, Hoa Phat, FPT or Gia Lam Railway Company are expected to participate in research, investment and development of railway industrial products.

According to Deputy Minister of Construction Nguyen Danh Huy, this list will be the basis for competent agencies and organizations to assign tasks or order railway industrial products to Vietnamese enterprises. This is a premise to help enterprises feel secure, proactively research, invest, improve design, manufacturing and production capacity; gradually increase the localization rate, especially in the group of railway materials, equipment and spare parts.

The Deputy Minister of Construction also emphasized that the issuance of the list helps Vietnamese enterprises participate deeply in the supply chain, gradually master technology, develop a sustainable railway industry, serve the goals of socio-economic development, and ensure national defense and security.

If approved, the Ministry of Construction will coordinate with the Ministry of Industry and Trade and relevant agencies to widely disseminate the list, introduce market demand and selection criteria, and attract businesses to be interested in and participate in investment and production.

Criteria for selecting businesses

The Ministry of Construction is finalizing a draft Decree regulating the assignment of tasks, ordering and criteria for selecting Vietnamese enterprises to provide railway industrial goods and services.

According to the draft Decree, selected enterprises must have non-negative net assets and demonstrate capital mobilization capacity.

Enterprises operating for more than 3 years must have an average revenue of 8,000 billion VND or more in the last 3 years. Enterprises operating for less than 3 years must have a minimum charter capital of 3,000 billion VND. In case of foreign investment, at least 35% of the charter capital must be owned by domestic investors.

These criteria are built on the scale of VNR - currently the only state-owned enterprise in this field.

VNR is currently the only state-owned enterprise in the railway sector. Photo: VNR.

According to the Ministry of Construction, international experience shows the effectiveness of the mechanism of assigning tasks associated with technology transfer. In Korea, when implementing the high-speed railway project, Hyundai Rotem Group was assigned to receive technology, produce vehicles and signaling systems. Thanks to that, Rotem's charter capital increased from 175 billion won (1999) to 2,009 billion won (2024), equivalent to more than 40,000 billion VND. Currently, Rotem is in the top 10 global train manufacturers, accounting for nearly 14% of the urban railway market share, just behind Bombardier and Alstom.

For smaller enterprises, the draft decree also allows participation in one or several components of railway industrial goods and services, contributing to the formation of a domestic supporting industrial chain and promoting the comprehensive development of Vietnam's railway industry.

Source: https://tienphong.vn/trinh-thu-tuong-de-xuat-quan-trong-ve-cong-nghiep-duong-sat-post1792909.tpo