Vingroup Withdraws From $67 Billion North South High Speed Rail Bid

Vingroup, Vietnam’s largest private conglomerate, formally withdrew on December 25 its investment registration to build the planned North South high speed railway linking Hanoi and Ho Chi Minh City. The project, estimated at VND1.7 quadrillion, roughly US$67 billion, had been presented as a priority national infrastructure program with a proposed route of about 1,540 to 1,541 kilometers and an official preparatory timeline that targets groundbreaking in December 2026 and completion by 2035.

The bid had been submitted in May through VinSpeed, a unit founded by company chairman Pham Nhat Vuong. VinSpeed’s proposal reportedly envisaged contributing about 20 percent of project equity from the sponsor, and sourcing the remainder through a state provided, zero interest loan with a long repayment tenor the company described as 35 years. Finance ministry officials raised concerns that the zero interest terms and a repayment schedule that some officials framed as 30 years would amount to an implicit state subsidy and could have negative implications for Vietnam’s sovereign credit metrics, creating a tension between the sponsor’s financing model and fiscal prudence.

Vingroup framed the withdrawal as a strategic reallocation of capital. The company asked the government to accept the withdrawal, saying the decision "would not impede the project's progress" and that it would allow the firm to concentrate on other large scale infrastructure, industrial and energy projects already approved or under construction. Those priorities include a 9,000 hectare Olympic standard sports complex in Hanoi, the 54 kilometer Ben Thanh to Can Gio metro line in Ho Chi Minh City, a 120 kilometer high speed link between Hanoi and Ha Long Bay, a VinMetal steel plant, two wind farms in Ky Anh, the Haiphong LNG thermal power plant and the Can Gio coastal megacity development.

Financial markets reacted quickly. Shares of Vingroup and its listed units fell sharply, with Vingroup, property developer Vinhomes and retail operator Vincom Retail down about 7 percent, while hospitality arm Vinpearl slipped roughly 3 percent and the benchmark Ho Chi Minh City index declined about 2.24 percent. Some trading screens showed stocks hitting floor prices following the announcement. The immediate market moves underscore investor sensitivity to both Vingroup’s role in large national projects and the potential for fiscal liabilities to shift back to the state.

The government has signalled it will press ahead with the procurement process and expects to announce a winning bidder in January. Other domestic groups that have expressed interest include automobile group THACO, state owned Vietnam Railways, and major private conglomerates active in investment and development. Officials led by Prime Minister Pham Minh Chinh have insisted on identifying an optimal investment model that ensures transparency and feasibility.

The episode highlights broader tensions in Vietnam’s infrastructure strategy. The project’s price tag makes it one of the largest planned investments in the country’s history and its financing model will shape future public private partnerships. Policymakers now face a choice between accommodating concessional terms to attract private execution capacity and safeguarding fiscal metrics that affect sovereign borrowing costs and long term investment capacity.