Vietnam's industrial conglomerate Thaco proposes North-South high-speed railway investment, following Vingroup's proposal

Private conglomerate Thaco Group has proposed to invest in a North-South high-speed railway project in Vietnam, following a similar proposal from heavyweight Vingroup.

In a proposal submitted to Prime Minister Pham Minh Chinh on Monday, Thaco said that of the $61.35 billion in investment capital, 20% will come from its equity and the remaining from foreign and domestic loans.

The cost does not include compensation and resettlement expenditures, which belong to a seperate project handled by the State.

Thaco proposed that the Government guarantee and pay all loan interest for 30 years. The loans are secured by project assets.

The enterprise said it would establish a project company, holding a controlling stake while inviting domestic corporations to contribute capital. The project will not be transferred to foreign investors, including shares and exploitation rights.

It plans to apply electrified rail technology, ensuring the project meets modern standards and complies with international best practices.

This effort will be based on cooperation between Thaco and domestic enterprises to facilitate technology transfer from leading global partners in Europe such as Germany and France, and Asia, including Japan and South Korea, the corporation wrote in its proposal.

The first phase is scheduled for completion and operation within five years, covering two sections: from Ho Chi Minh City to Nha Trang and from Hanoi to Ha Tinh, contingent upon the state’s handover of cleared land. These sections are prioritized due to their high demand for passenger and freight transport.

The second phase will complete the remaining segment from Ha Tinh to Nha Trang within the following two years. This section traverses mountainous terrain with complex geological conditions, requiring additional time to study and outline optimal solutions.

Thaco also highlighted that its member company, Thaco Industries, will collaborate with domestic enterprises to receive technology transfers and produce locomotives, train carriages, machinery parts, components, and equipment for the project, as well as transport vehicles linked to the North-South Expressway.

Meanwhile, another subsidiary, Thadico-Dai Quang Minh, will work alongside domestic enterprises to receive technology transfer and implement investment, construction, project management, operation, maintenance, and upkeep of infrastructure.

Additionally, it will invest in and efficiently develop land surrounding the stations based on the transit-oriented development (TOD) model to create integrated urban areas.

Thiso, another member corporation, will coordinate with domestic enterprises to invest in, manage, and operate social infrastructure such as commercial centers, Emart hypermarkets, schools, hospitals, and parks, addressing the essential needs of local populations and promoting socio-economic development.

Founded in 1997 with a focus on automobile manufacturing and assembly, Thaco has grown into a diversified industrial conglomerate. It now operates across multiple sectors through its member corporations and employs more than 77,000 people.

Previously, on May 15, VinSpeed High-Speed Rail Investment and Development JSC, a subsidiary of private conglomerate Vingroup, announced its registration to invest in Vietnam’s North-South high-speed railway project.

The behemonth project will have an estimated investment of VND1,562 trillion ($60.24 billion), excluding costs related to compensation, relocation support, and resettlement for land clearance. It is scheduled for completion by 2030.

VinSpeed commits to mobilizing 20% of the total investment capital, equivalent to $12.27 billion. For the remaining 80%, excluding costs related to compensation, relocation support, and resettlement for land clearance, the company proposed borrowing from the state budget, through zero-interest loans, repayable over a 35-year period from the disbursement date.

Compared to the investment plan approved under Resolution No. 172/2024/QH15, VinSpeed’s proposal would substantially reduce fiscal pressure on the national budget. This model gains further relevance considering the global trend of high-speed rail projects struggling with cost recovery and sustained profitability.

VinSpeed has pledged to begin construction before December 2025, accelerating the project timeline to bring the entire railway into operation by December 2030.

The firm is currently in talks with leading partners from China, Germany, and Japan to facilitate technology transfer and the domestic production of locomotives, carriages, and signaling systems.