Vietnam’s largest conglomerate, Vingroup, said on Thursday it has withdrawn its investment proposal for the country’s $67-billion North–South high-speed railway project, citing a reassessment of resources and priorities, reports Bangkok Post.
The proposal, submitted in May, was reviewed after Vingroup was awarded several major national projects, including an Olympic-standard stadium and rail links connecting key locations, the company said in a statement.
Following the announcement, shares of Vingroup and its subsidiaries fell sharply. Vingroup, along with property developers Vinhomes and Vincom Retail, slid about 7%, while hospitality arm Vinpearl dropped 3%, dragging the benchmark Ho Chi Minh City index down 2.24%.
In May, Vinspeed—a subsidiary founded by Vingroup chairman Pham Nhat Vuong—proposed to develop the 1,540-kilometre railway linking Hanoi and Ho Chi Minh City. The plan included self-financing 20% of the project and seeking the remaining 80% through a zero-interest, state-funded loan over 35 years.
However, Vietnam’s central bank raised concerns over Vingroup’s high leverage and limited experience in rail infrastructure, warning that the requested loan and guarantees could pose risks to banking stability. An opinion dated May 19 and reviewed by Reuters said the proposal would require “special state guarantees.”
The finance ministry also flagged the zero-interest terms and the proposed 30-year repayment schedule—serviced only at maturity—as effectively amounting to a state subsidy that could negatively affect Vietnam’s credit ratings.
Other investors, including auto manufacturer Thaco, Vietnam Railways, and Vietnam Investment and Development Group, have expressed interest in the high-speed rail project.
Vingroup said its withdrawal would not delay the project and would allow the company to focus on delivering other large-scale initiatives. The government has said the winning bidder for the North–South railway project will be announced in January.
Bd-pratidin English/ Jisan
