VTG (Canada) Wants to Invest in The Metro Line in Hanoi

On November 22nd, Deputy Prime Minister Trinh Dinh Dung has met Mr. Richard Courey, President and CEO of Vision Transportation Group (VTG) from Canada to discuss VTG’s plan to invest in Vietnam.

At the meeting, Deputy Prime Minister Trinh Dinh Dung welcomed and highly appreciated the experiences of VTG in the field of transportation infrastructure project development in many countries around the world. According to Deputy Prime Minister, in the current context, Vietnam is advocating the mobilization of social resources to invest in developing infrastructure for socio-economic development. Therefore, the Government always welcome and appreciate the determination of potential international partners who are experienced in investing in infrastructure projects in Vietnam.

VTG has researched and proposed with Hanoi, the Government, ministries and departments to implement the project of urban railway no. 2 connecting Noi Bai airport with the West Lake area in the form of public – private partnership (PPP).

According to research of VTG, this will be the urban railway that is completely feasible in technology and the ability to recover capital, ensuring benefit for investors.

Richard Courey and his colleagues have reported to the Deputy Prime Minister on the idea, method, technology, investment progress of the project, and proposed some recommendations to the Government. Furthermore, he also affirmed that with their reputation and experiences, VTG is fully qualified in professional and financial capacity to successfully implement the project, meeting all the requirements of the Government of Vietnam.

Vietnam Deputy Prime Minister also suggested VTG to study more investment projects to develop infrastructure, especially railway transport infrastructure, including the North-South high-speed railway.

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Taste of US investors in Investment in Vietnam

The scent of American investors

Renewable energy, high technology industries, supporting industries… are areas that are interested by US investors when they come to set up company in Vietnam.

One of the “hot” issues that US businesses and investors interested in is the issue of cooperation and investment in the field of renewable energy. According to Mr Freb Burke from Baker & McKenzie, renewable energy is currently the most attractive investment area. Vietnam will avoid the construction of thermal power plants when moving to invest in wind and solar power plants.

In addition, many multinational corporations have strict environmental standards and they want these standards to be applied globally. Manufacturers also want to produce consumer goods using clean energy. For example, Apple is making a commitment to achieve 100% clean energy in their global supply chain. Hence, if Vietnam wants to attract investors like Apple, Vietnam should produce enough renewable energy to meet their needs.

According to Mr Burke’s explanation, renewable energy secures energy and environment security for Vietnam, helping Vietnam tap its potential and export energy. Renewable power plants attract the interest of US businesses like First Solar and GE. Furthermore, Vietnam has just raised its electricity purchase price to 9.35 UScent per kWh. This is a relatively attractive price for foreign investors due to the reduction in the price of wind and solar power along with the development of technology. However, Vietnam needs long-term guarantees for investors to borrow from banks and invest.

Moreover, the American Chamber of Commerce in Vietnam (AmCham) stated that the Association and its partners are proposing a Production Energy Plan in Vietnam to provide a needed road map for reforms, in order to attract investors, equipment suppliers, manufacturers and operators from the United States.

In addition, many US investors have also expressed their interest in intelligent cities, waste treatment projects, high-tech industries… Many businesses say that despite the United States withdrawal from the TPP agreement, trade relations between Vietnam and United States will continue to develop strongly in the future.

In fact, in recent times, high technology and supporting industries have attracted more projects of US investors. According to the owner of Saigon Silicon Project, after the construction of the project in Saigon Hi-Tech Park in the second half of 2016, up to now, many US investors have expressed their plan to implement projects here. It is planned that after completion of the infrastructure, the project can attract about 20 projects operating in the field of high tech and supporting industries, with investment capital of about 1.5 billion USD.

Meanwhile, a group of US scientists and businesses have recently reached an initial agreement on implementing a smart glass production project in Long An province with a billion dollar investment capital. This is a high-tech manufacturing project and about 90% of the output will be exported.

According to businesses, the results of investment attraction is not worth the potential of the two countries. Currently, the United States ranks 9th among foreign investors in Vietnam, with an investment of about 10 billion USD according to registered statistics from the United States. However, if we count the investment from the United States through third countries, the investment capital must be greater, for example, the Intel project has investment of more than 1 billion USD, but the investment capital is registered from the enterprise based in Netherlands.

Another good news is that, during the US visit of Vietnam Prime Minister Nguyen Xuan Phuc at the end of May 2017, US and Vietnamese businesses have signed contracts worth tens of billions of dollars in many fields. Therefore, according to businesses, if the bottlenecks, especially the regulatory and framework issues on investment are improved, the flow of investment from the United States is likely to increase in the coming time

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