Vietnam has begun early execution of a $7.7 billion rail megaproject linking its northern border with China to Hanoi and the Hai Phong port complex, moving one of Southeast Asia’s largest transportation investments from legislative approval to early construction activity.
The Lao Cai-Hanoi-Hai Phong railway was approved in February by Vietnam’s National Assembly, authorizing public investment in a new standard-gauge line designed to transport goods and passengers. Government documents describe a corridor running from the border railway in Lao Cai province through Hanoi to Lach Huyen station in Hai Phong.
The National Assembly set a target of completing the project by 2030 and ordered the government to start preparing a feasibility report during 2025, while allowing some preparatory and enabling activities to run in parallel.
According to the resolution, the line will use a gauge of 1,435 mm and operate at design speeds of up to 160 km/h on the main line segments outside Hanoi, with reduced speeds through urban sections and on secondary lines. Vietnamese officials have said the choice of gauge is aimed at aligning the country’s rail system with international standards and improving interoperability with China’s network, particularly for freight traffic.
Implementation authority rests with the central government and the prime minister, and implementation will be carried out through a specialized project management board. Vietnam Railways is designated to take responsibility for the management and operations of the infrastructure once construction is complete.
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Government statements issued in early December confirmed that early implementation of a first component of the project has begun.
Officials said initial activities include work at several stations, while design work for additional stations is ongoing and expected to progress in phases until 2026. Construction of the main track is expected to begin after preparatory activities are completed and feasibility stage approvals are obtained.
Topographical and geographical challenges
From an engineering and delivery perspective, the approved alignment points to a complex construction program.
The corridor crosses nine provinces, starting in the mountainous border regions near Lao Cai, passing through riverine and agricultural areas of the Red River Basin, passing through dense urban stretches in and around Hanoi, and ending at coastal port facilities in Hai Phong. The resolution authorizes varying design speeds per segment, reflecting the physical and urban limitations along the route.
The scale of the facilitating work is also substantial. The National Assembly estimated land needs at about 2,632 hectares and a displaced population of approximately 19,136 people, assigning responsibility for land acquisition, resettlement and related sub-projects to provincial people’s committees.
The financing of the railway is structured as a public investment and can resort to appropriations from the state budget, government bonds and foreign loans on favorable terms. The National Assembly explicitly authorized the mobilization of ODA and foreign loans without requiring separate approval procedures.
Government statements earlier this year indicated that Chinese government loans are expected to be part of the financing, although detailed terms have not been publicly disclosed.
To support construction on various terrains, the resolution includes special requirements for obtaining material. These provisions allow provincial authorities to modify mining licenses and the capacity of common construction materials required for the project, while meeting environmental and safety requirements.
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While the National Assembly authorized flexible procurement mechanisms, including the use of EPC packages and direct procurement in specific circumstances, it also mandated improved oversight. The resolution requires multi-agency participation in contractor evaluations and orders the State Audit Office to audit project execution.
No contractors or designers have yet been named, and no procurement schedule for major civil works or rail systems has been released. Officials have said the current focus remains on completing feasibility work, detailed designs and enabling activities before moving to full-scale construction.
Vietnamese authorities have described the railway as a cornerstone of the country’s long-term industrial and transport strategy, aimed at easing pressure on roads, improving export logistics and strengthening cross-border connectivity.
As early work progresses and more components move towards procurement, the project is expected to attract the attention of global railway contractors and designers who are evaluating one of Southeast Asia’s largest railway construction programs moving towards execution.
