Vietnam PM directs ministries to address VAFIE proposals on ministerial merger, high-speed railway project

Prime Minister Pham Minh Chinh has directed relevant ministries and agencies to give written responses to proposals submitted by Prof. Nguyen Mai, chairman of the Vietnam’s Association of Foreign Invested Enterprises (VAFIE).

The proposals cover the merger of the Ministry of Planning and Investment (MPI) and the Ministry of Finance (MoF); preferential credit policies for domestic enterprises; financial-tax policies and experience in developing high-speed rail systems.

The VAFIE. headquartered at the MPI's office building at 65 Van Mieu street, Hanoi, is the parent entity of The Investor.

According to a document issued by the Government Office earlier this week, the PM asked the Ministry of Home Affairs to coordinate with relevant ministries and agencies to review Mai's proposal regarding the merger of the MPI and the MoF while giving advice to the government and its steering committee on the implementation of the 12th Party Central Committee’ Resolution No. 18 on streamlining the state apparatus for greater efficiency.

The MoF was required to coordinate with other ministries and agencies to consider the proposal related to financial and tax policies.

The State Bank of Vietnam (SBV) will work with relevant ministries and agencies to scrutinize the proposal regarding preferential credit policies for domestic enterprises; while the Ministry of Transport will collaborate with other ministries and agencies to address the proposal on experience in developing high-speed rail systems.

Earlier, in a letter sent to the Prime Minister in January, Prof. Nguyen Mai expressed strong support for the policy of the Party Central Committee (PCC), the Politburo and the PCC's Secretariat on state apparatus reform, with a focus on reducing administrative layers, clearly defining the roles and responsibilities of each unit, downsizing the administrative workforce, and selecting capable individuals to work for Party and the State agencies.

First, regarding the merger of the MPI and the MoF, Mai emphasized the importance of economic forecasting and the designing and monitoring of medium- and long-term economic plans and strategies.

He argued that given the unpredictable developments in the global politics, economy, markets, trade, and investment, Vietnam needs a dedicated economic forecasting center equipped with modern tools and experts to respond to emerging situations effectively.

He noted that many countries, such as the U.S., Germany, and Japan prioritize short-term forecasts (monthly and weekly), rather than long-term forecasting.

Second, he mentioned that before 2010, large-scale infrastructure projects as well as production and service projects were mostly carried out by foreign investors and enterprises.

However, from 2011 onwards, Vietnam has seen the emergence of thousands of large-scale private enterprises, including heavyweights like Vingroup, Sun Group, Hoa Phat, T&T, and Deo Ca, which have the financial capacity, technology, technical solutions, and skilled experts to undertake large projects.

These companies also possess modern technologies that meet international standards, resulting in shorter construction times, lower costs, and higher efficiency.

Mai proposed that the Party and the State prioritize domestic enterprises by offering financial, credit, and tax incentives to help them successfully implement projects both at home and abroad.

Finally, the VAFIE leader acknowledged the Prime Minister and the Government’s efforts to address the waste of public investment funds, construction delays, and the lack of quality in transportation infrastructure projects.

"These efforts have led to shorter construction times, reduced investment costs, higher quality, and completion of more projects, contributing to faster economic growth and higher social-economic returns," he stressed.

Mai provided the example of the expressway system, which was initiated in the mid-1990s and had around 670 km completed by 2017. From 2018 to 2025, an additional 2,300 km is expected to be completed thanks to the selection of capable contractors, transparent bidding processes, and strict supervision of construction, with severe legal penalties levied on violations in the construction of national key projects.

“We need to draw lessons and apply them to the construction of the high-speed rail system, firstly the section from Hanoi to Ho Chi Minh City,” the professor said, urging the Prime Minister to direct the Ministry of Transport to take action on this matter.