Chinese rail and power giants seek major investment in Vietnam's infrastructure

On his visit to China's Guangxi, Vietnamese Prime Minister Pham Minh Chinh on September 16 had important meetings with key stakeholders from China's major corporations. The discussions centred around potential investment opportunities in Vietnam's infrastructure sector, particularly the proposed Lao Cai - Ha Noi - Haiphong railway.

During the engagements, PM Chinh welcomed chairman of the Executive Board of China Railway Construction Corporation (CRCC) Chen Yun and Wang Xiaojun, deputy general manager of PowerChina.

Yun of CRCC expressed a strong interest in investing in railway projects that have been green lit by the Vietnamese government. "We are eager to participate in these initiatives," Chen said.

Highlighting the global footprint of CRCC, PM Chinh said that the Vietnamese government encouraged foreign corporations, particularly those from China, to expand their investment and business operations in Vietnam.

A central aspect of the discussions revolved around the potential construction of the Lao Cai - Hanoi - Haiphong railway, estimated to stretch around 388km.

"Infrastructure development is a strategic breakthrough for us," PM Chinh said.

He urged for immediate detailed discussions post-meeting with Vietnamese agencies like the Ministry of Transport, the Ministry of Planning and Investment, and the Commission for the Management of State Capital at Enterprises (CMSC).

PM Chinh said, "The government will address issues within its jurisdiction. The spirit is to ensure progress, quality, safety, and environmental protection commitments made must be met with tangible effectiveness."

Additionally, Xiaojun of PowerChina mentioned plans to invest in power projects and expressed interest in Vietnam's high-speed railway projects. The Vietnamese PM responded positively, recommending immediate viable solutions and collaboration.

"The foundation of our cooperation in deploying infrastructure projects, including high-speed railways, lies in the strong bilateral ties between Vietnam and China. The key is effective implementation that benefits both states, the public, and businesses, while also sharing the associated risks," he said.

Vietnam Railways Corporation is currently seeking opinions on preliminary planning for the Lao Cai - Hanoi - Haiphong - Quang Ninh railway line, conceived by domestic consultants.

This railway, spanning over 441km, is planned up to 2030 with a vision to 2050. It is set to start at Hekou, China, in Lao Cai and traverses multiple provinces before concluding at Cai Lan Port in Quang Ninh.

CRCC, known globally for its construction expertise across various sectors, currently operates with 381 branches in 105 countries and 290,000 employees.

In Vietnam, CRCC served as the main contractor for Hanoi's urban rail project, the Cat Linh-Ha Dong line, boasting an EPC (engineering, procurement, contruction) contract value of $640 million. It is also linked to the Dak Nong wind power project with a contract value of $18.1 million, and a tyre factory project in Tien Giang province valued at $5 million.

Having penetrated the Vietnamese market in 2000, PowerChina was involved in constructing the Lai Chau and Son La hydropower plants, as well as the Vinh Tan coastal thermal power centre. They have also been the main contractor for wind and solar projects with a total capacity of 7GW. The cumulative contract value of these endeavours surpasses $6.5 billion.

PowerChina's integrated capabilities span investment and financing, planning design, technical construction, equipment production, and operational management, particularly in clean and low-carbon energy, water resources, environmental, and infrastructure sectors.

In 2022, the corporation ranked 100th on the Fortune Global 500 list and 29th among China's Top 500 enterprises.

With wider activities taking place involving the markets of China, Taiwan, and Hong Kong, their investors are looking at potential infrastructure opportunities throughout Vietnam.

The energy sector in Vietnam has piqued the interest of Chinese corporations, paving the way for collaborations and potential investments in renewable energy projects.

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