Vietnamese legislature approves multiple incentives to attract investors in railway sector

Vietnam's law-making National Assembly (NA) has passed an amended Railway Law that paves the way for sweeping incentives aimed at encouraging private investment in the country's rail sector.

With 426 out of 440 deputies present at the legislature's ongoing ninth session on Friday voting in favor, the new law introduces a series of preferential policies for both domestic and foreign investors involved in railway business activities.

These include exemptions and reductions in land use and land rental fees for railway-dedicated land, as well as access to credit and government guarantees for loans.

Besides, firms investing in railway infrastructure and operations can enjoy tax incentives, particularly for corporate income tax, preferential loans and partial state budget support for projects in economically disadvantaged areas, and subsidies for urban railway passenger transport.

Additionally, investors will be encouraged to use locally produced goods and services, with exceptions for specific projects such as the procurement or construction of railway carriages and locomotives.

Vietnam will support, create favorable conditions for, and protect the rights and interests of local and foreign organizations and individuals engaged in railway infrastructure management, rail transport operations, industrial production for the railway sector, and training.

Investors will also be encouraged to join research, application of science and technology, digital transformation, and technology transfer in the railway industry.

The revised law highlights the government's commitment to prioritizing state budget allocation for railway infrastructure investment, maintenance, and protection.

Also, it emphasizes the key role of the railway system in Vietnam's socio-economic development and national defense.

Provinces through which railway projects pass will be encouraged to contribute resources to land clearance, resettlement support, and local infrastructure construction.

Furthermore, the law grants priority in land-use planning for railway infrastructure development and related industrial works.

   Simplified contractor selection process

One of the notable changes in the amended law is the relaxed approach to contractor selection for railway projects.

The law allows authorized project investors to choose from restricted bidding methods or direct appointment of contractors for goods supply, consulting, construction, and EPC (Engineering, Procurement, and Construction), EC (Engineering and Construction), EP (Engineering and Procurement), or turnkey contracts.

Foreign contractors may also be selected for consulting services and pre-construction phases.

While bidding competition requirements may be waived in some cases such as feasibility studies and FEED (front-end engineering design) preparation, the process must still comply with Vietnam's bidding regulations and relevant international treaties.

Tieu Bac - Tien Long - Thanh Chung / Tuoi Tre News

(2025/06/27-17:44)