Economic management expert Hoàng Thị Thu Phương. Photos kinhtedothi.vn

Economic management expert Hoàng Thị Thu Phương speaks to Kinh Tế & Đô Thị (Economic and Urban Affairs) about the best financial options for the North-South high-speed railway line.

How do you assess the scale and challenges of the North-South high-speed railway line?

The North-South high-speed railway line project is clearly unprecedented in size.

With a total investment exceeding VNĐ1.5 quadrillion, equivalent to more than US$60 billion, it is arguably the most challenging project we have faced in decades.

It demands the highest level of political will and maximum effort from both the State and the people.

Difficulties are not limited to capital mobilisation.

Project management, financial oversight and ensuring investment efficiency are also significant challenges.

The project is currently in the investment preparation phase, and many practical aspects are still in the planning stage.

Once implementation begins, more complex and unpredictable issues may arise.

What do you think is the best financial solution for the project?

The Ministry of Finance has proposed four funding options: a combination of central and local budgets (with the central budget playing the leading role); Government bonds with appropriate interest rates and terms; mobilising domestic investment resources, including public-private partnerships (PPP) and tapping into high-concession foreign funding under reasonable, low-constraint conditions.

This financial plan is feasible and covers all possible funding channels.

However, in my opinion, we should focus mainly on two sources: the State budget and Government bonds, especially the budget.

Contributions from both central and local governments over different project phases will be crucial.

The National Assembly and the Government have also outlined specific, optimised policies that allow financial resources from land auctions around high-speed railway stations to be used for land clearance and reinvestment in the project. Government bonds can also serve as an effective channel to mobilise public contributions for this key national project.

Foreign loans will also be needed, but they often come with legal, contractual and technological conditions, so they require careful consideration.

Recently, some domestic enterprises have expressed interest in implementing the project under PPP.

But based on available media information, I believe these cooperation proposals are not truly optimal.

An image showing the future design of the proposed North-South high-speed railway line.

Why are the private sector’s proposals for cooperation in the North-South high-speed railway project not optimal?

Firstly, there’s the issue of capacity. Some domestic firms have proposed taking on the project, but they lack experience in this field.

Entrusting such a nationally significant mega-project to them would pose risks to businesses, the State and the public alike.

If the project gets delayed or faces problems due to a lack of experience and capability, it wouldn’t just result in economic losses but could also affect politics, security and national defence.

Moreover, most companies only propose contributing around 20 per cent of the total investment and ask that the remaining 80 per cent be borrowed from the State budget or guaranteed by the Government to access domestic or international loans at zero per cent interest.

They also seek full exemptions on equipment import taxes, corporate income taxes and demand exclusive rights to operate the railway line and develop surrounding land areas.

Clearly, this places most of the burden on the State and the public, while the benefits are concentrated in the hands of the businesses.

If the project encounters risks, budget overruns or inefficiencies, the State and the people will ultimately bear the consequences.

I believe this approach is neither optimal nor feasible. However, we should still acknowledge and appreciate the pioneering spirit of these private enterprises.

People across the country are concerned about this project, especially regarding capital recovery. What do you think is a viable plan for recovering the capital invested in the project?

We need to clearly recognise that the North-South high-speed railway line is not an ordinary commercial project. It is the backbone of national transportation and a core component of comprehensive socio-economic development. Therefore, asking how — and how many years it will take — to recoup investment is not the right question.

The true value of the project lies in its ability to drive national development, rather than generating commercial profits.

The benefits it brings to transportation, urbanisation, production and trade are immense and not easily quantified. What truly matters is arranging and managing project funds wisely, using capital efficiently and ensuring progress and quality so that the project can be completed and put into use quickly.

Given this nature, I believe the North-South high-speed railway line should be funded by the State budget and implemented by the State to avoid being swayed by the interests of individual organisations or enterprises.

If handed over to private companies, their economic goals will naturally take precedence, which could hinder the project’s development mission.

What role can private enterprises play in this large-scale project?

I believe there is still room, even a strong need, for private sector involvement in the project.

We have many large companies, but they lack experience and mastery of complex, modern technologies.

Projects like this offer an ideal environment for them to learn, grow and gain experience. They can participate in supporting roles, essentially "learning by doing”.

The Government has emphasised the need to mobilise domestic strength and ensure domestic businesses can participate.

There are binding requirements for contractors to use domestically-produced goods and services, and there’s a focus on training a high-quality workforce to develop the railway industry.

This creates valuable opportunities for local enterprises to join and contribute, which should be seized wisely.

We should also keep in mind that the North-South high-speed railway line will not be the only large-scale, nationally significant project in the future. If domestic enterprises can absorb technology and gain experience now, they will be well-positioned to lead future projects. VNS