[Exclusive] Bid for Vietnam’s 100-trillion-won North–South Express Railway project reignited

【Hanoi, Vietnam—Correspondent Kim Jun-seok】With the project costs alone reaching 100 trillion won, the North–South Express Railway project—the largest in Vietnam’s history—has recently returned to square one in the race to win the contract, raising the prospect of faster action by South Korea’s railway industry. Chinese companies had reportedly been all but certain to win the contract, but Vietnam’s railway authorities are said to have announced the final breakdown of talks during last-minute negotiations on details.
According to this newspaper’s reporting on the 1st, Vietnam’s railway authorities had effectively selected a Chinese consortium as the feasibility study (FS) consultant and had been working to reach an agreement, but announced the breakdown of negotiations at the final stage.
The FS consultant is responsible for the crucial work of designing technical standards for the entire project, including the high-speed railway’s signaling system, track specifications and power system. An entity that secures this role first can win the contract at the main bidding stage on the basis of its own country’s technology. Given that railway projects require substantial funding, an FS consultant that leads the initial design can also help secure financing, making it easier to arrange package financing such as official development assistance (ODA) or large-scale loans.
A source familiar with the project said, “The Vietnamese government pulled the plug after the Chinese side refused to transfer key underlying technologies and demanded an excessive amount.” The selection of an FS consultant, originally scheduled for the second quarter, was delayed until the fourth quarter of this year, reportedly because of difficult negotiations with China and efforts to reconcile differences.
China maintained its reluctance to transfer high-speed rail technology throughout its negotiations with the Vietnamese government, and friction eventually emerged. Past examples of China’s expansion into Southeast Asia show that it has transferred only technologies focused on maintenance and repair, while insisting on exporting complete products and tightly controlling core technologies such as the train control system (CTCS)—the “brain” of the system. The word is that this closed-door approach prompted a backlash from Vietnam.
Earlier, Vietnam had effectively laid the groundwork with China in mind by setting a requirement that trains operate at 350 km/h. China is currently the only country in the world operating trains commercially at 350 km/h. In addition, To Lam, general secretary of the Communist Party of Vietnam (CPV), personally rode the high-speed train Fuxing Hao on a long-distance trip during a visit to China last April, and industry observers were also said to have viewed China’s contract as all but certain.
South Korea’s railway industry has formed a “North–South Express Railway Task Force (TF)” within the Ministry of Land, Infrastructure and Transport, comprising the ministry, Korea National Railway, Hyundai Rotem Company and major domestic engineering firms. The task force holds regular meetings and closely monitors the progress of the bid.
[email protected] Kim Jun-seok Reporter