Vietnam's $67B High-Speed Rail: Richest Tycoon Exits, Siemens Beats China — What's Next?
On Christmas Day, Vietnam's business world dropped a bombshell.
On December 25, 2025, Vingroup — owned by Vietnam's richest man Pham Nhat Vuong — officially withdrew from the bidding for the North-South High-Speed Railway. The 1,541-kilometer line connecting Ha Noi and TP. Ho Chi Minh City, with a budget of USD 67 billion, is the largest infrastructure project in Vietnamese history. The news sent Vingroup's stock limit-down, wiping USD 1.9 billion off Pham Nhat Vuong's net worth in a single day — enough to top Forbes' Christmas wealth-loss list.
Yet just eight days earlier, Vingroup's subsidiary VinSpeed had signed a high-profile deal with Germany's Siemens, announcing plans to bring 350 km/h rail technology to the 121-kilometer Ha Noi–Quang Ninh (Ha Long Bay) line it will build independently.
So what is this high-speed rail drama really about? Let's start from the beginning.
A fifteen-year dream for high-speed rail
Vietnam's high-speed rail dream dates back to 2010, when the National Assembly rejected a Japan-backed North-South rail proposal — the cost was too high and the country's finances too thin. Fifteen years later, with Vietnam's economy transformed, the project finally won National Assembly approval in November 2024.
The plan calls for 23 passenger stations and 5 freight stations, cutting the current 30-hour train journey to five or six hours. This is not just a transportation project — it is seen as a symbolic step toward developed-nation status.
Billionaire ambition, government contradiction
Vingroup established VinSpeed in May 2025 and quickly entered the bidding. Pham Nhat Vuong's proposal was bold: fund 20% privately, and ask the government for a 35-year, zero-interest loan for the remaining 80%, with the principal repaid in full at maturity.
The proposal triggered fierce debate inside the government.
Vietnam's central bank raised concerns first. Officials said Vingroup was already highly leveraged and lacked railway construction experience — guaranteeing a loan of this size could destabilize the entire banking system. The Ministry of Finance went further, arguing that zero interest plus a 30-year repayment deferral amounted to a state subsidy, and that any failure could drag down Vietnam's sovereign credit rating.
An internal document obtained by Reuters showed that relevant agencies believed the proposal required "special state guarantees" to work — essentially transferring all risk to taxpayers.
Paradoxically, insiders say senior government officials had actively encouraged Vingroup to bid in the first place, and had even discussed real estate development partnerships along the corridor. This push-and-pull reflects the dilemma Vietnam faces in pursuing its "national champion" corporate strategy.
A dramatic reversal in one week
On December 17, VinSpeed held a high-profile signing ceremony with Siemens in Ha Noi, launching technical cooperation on two lines VinSpeed will build itself — the 121-kilometer Ha Noi–Quang Ninh (Ha Long Bay) line and the 54-kilometer Ben Thanh–Can Tho line in TP. Ho Chi Minh City. Siemens' global CEO attended in person; Germany's ambassador to Vietnam witnessed the signing. The two sides announced plans to deploy Siemens' latest Velaro Novo high-speed trains, capable of 350 km/h, with 30% lower energy consumption and 10% higher passenger capacity than previous models.
German outlet Table.Briefings reported with excitement that Siemens had beaten Chinese, Japanese, and South Korean rivals for the Ha Noi–Quang Ninh line — a key foothold in Southeast Asian markets where Chinese firms have long held the upper hand. The win was read as a signal of shifting geopolitical ground.
Eight days later, Vingroup withdrew from the far larger contest — the North-South High-Speed Railway bid.
The real reason for the exit
Vingroup's official explanation was "concentrating resources on other major projects." Pham Nhat Vuong does have plenty on his plate: a 9,000-hectare Olympic City project in Ha Noi, a massive waterfront city in Can Tho, VinMetal's steel plant, an LNG power plant in Hai Phong, a wind farm in Ha Tinh — each one a money pit in its own right.
But those familiar with the situation say the real sticking point was financing terms.
VinSpeed's CEO told reporters directly: "We put forward one proposal from start to finish. If it had to become a public-private partnership, we simply couldn't raise that 80%." In other words, without the government's ultra-favorable loan terms, no private company could shoulder a project of this scale alone.
That explains an apparent contradiction: Vingroup pulled out of the North-South Railway while, in the same week, breaking ground on the 54-kilometer Ben Thanh–Can Tho (Can Gio) line. The difference is that the financing terms on the latter are clearly more favorable — and the route runs through some of Vingroup's most active real estate development zones.
Pham Nhat Vuong's business logic has always been clear: if a deal doesn't make money, let it go no matter how big. He applied the same discipline in 2020 when he sold VinMart supermarkets to Masan Group and moved on.
Siemens wins; China is absent
VinSpeed's choice of Germany's Siemens over Chinese firms for the Ha Noi–Quang Ninh line reflects the complicated feelings many Vietnamese hold toward Chinese infrastructure.
Vietnam and China have a delicate relationship. The two countries have overlapping claims in the South China Sea, and border tensions flare periodically. Vietnamese public opinion is also deeply skeptical of Chinese-built infrastructure. The Cat Linh–Ha Dong metro line in Ha Noi stands as the cautionary tale: built by a Chinese contractor, it suffered severe delays, major cost overruns, and remains a source of public frustration.
When the Siemens deal was announced, Vietnamese social media erupted in approval. One commenter wrote: "Not using a Chinese company is the right call — we don't want them touching any major national projects." Others pushed into sovereignty territory: "We should stay away from those who have eyes on our land."
For the North-South Railway, no technical partner has been chosen yet. Vietnam's Ministry of Transport says it will prioritize partners with "high safety standards and financial transparency" — no names mentioned, but the message was clear. Siemens' win on the Ha Noi–Quang Ninh line may have already shaped the outcome.
What happens next?
With Vingroup out, other bidders are circling. The most-watched is THACO, Vietnam's largest automotive group, which has signed a strategic partnership with South Korea's Hyundai Rotem. State-owned Vietnam Railways and the Discovery Group are also in the running.
The government has said it will announce the final investment model and winning bidder in January 2026. Only then will this fifteen-year dream finally enter its countdown.
This high-speed rail saga is about far more than a construction project. The choice of technical partner, the fight over financing, the question of who ultimately pays — every step shapes Vietnam's strategic direction as China and the United States compete for influence in the region. Whether the line actually opens on schedule in 2035 remains very much an open question.
