This landmark policy opens a rare opportunity to develop a full-fledged national railway industry.

A new mechanism to support railway industry development

On December 12, 2025, the government issued Decree 319/2025/NĐ-CP outlining the procedures, authority, and policy framework for implementing special mechanisms related to the development of science, technology, research, and technology transfer for key national railway projects, in accordance with recent National Assembly resolutions.

The decree clearly defines criteria for selecting Vietnamese organizations and enterprises eligible to undertake railway-related technology transfer missions. These include factors such as infrastructure, financial capacity, human resources, and a commitment to mastering the technology.

Eligible entities must be established under Vietnamese law, with clearly defined functions (for organizations) or registered business lines and valid operating licenses (for enterprises) aligned with the relevant railway technologies.

In addition, these companies must have adequate factory space and facilities to receive and install equipment and production lines.

They must also demonstrate sufficient financial capacity or access to capital to finalize payments for technology transfer, as well as employ qualified experts and technicians capable of managing, operating, and mastering the transferred technologies.

Enterprises must present resource mobilization plans and a binding commitment to fully absorb, master, and operate the new technologies.

They are also expected to show experience in international technology cooperation. Importantly, the value of the technology transfer must not exceed the approved project budget.

Only companies not undergoing dissolution, bankruptcy proceedings, or having had their licenses revoked are eligible.

Project investors must define specific criteria within these guidelines to match the technical demands of each individual railway technology package.

Laying the groundwork for a homegrown railway manufacturing ecosystem

In practice, many Vietnamese companies are already preparing to play a greater role in future railway projects.

Several major enterprises have partnered with international firms to receive advanced technology, with the long-term goal of domestic production of locomotives and train cars for both urban and high-speed rail networks in Vietnam.

Plans are also underway to establish integrated railway industry complexes - including manufacturing zones, closed-loop testing tracks, and large-scale maintenance centers.

These efforts aim to go beyond basic assembly to develop complete production capabilities and master core railway technologies.

In the materials segment, domestic firms have launched projects to produce rail-grade steel and specialty alloys for high-speed and urban railway systems. One such project is set to break ground on December 19.

Once operational, these facilities will reduce Vietnam’s dependence on foreign suppliers for strategic materials.

Meanwhile, other Vietnamese firms are expressing readiness to participate in high-tech sectors like signaling, control systems, and foundational infrastructure - from substructures to railbed construction.

These contributions will allow local companies to gradually move up the value chain and take on more integral roles in the railway industry, rather than remaining secondary contractors.

A strategic shift from import dependence to technology mastery

The release of Decree 319 - complete with detailed criteria for selecting domestic firms to receive railway technology - marks a strategic shift in Vietnam’s infrastructure policy: from total reliance on foreign imports to partial localization and eventual mastery.

Speaking with VietNamNet, Nguyen Minh Thao, Deputy Head of the Business Development and Business Environment Department at the Institute for Economic and Financial Policy, said this decree reflects both a timely and significant move.

In the past, large-scale public investment projects involved complex procedures that placed domestic firms at a disadvantage when competing with foreign contractors. As a result, private Vietnamese firms were often relegated to sub-contracting or low-value-added roles.

Now, by changing the engagement approach, the government is enabling the private sector to directly participate in major national projects.

This gives local enterprises a chance to build up technical capabilities, move deeper into the value chain, and eventually master key technologies - strengthening their competitiveness in the process.

According to Thao, the clear criteria outlined in Decree 319 not only ensure transparency but also reflect the government’s strategic intent to “commission” capable domestic firms to handle key infrastructure missions.

Without such a mechanism, Vietnamese companies would likely never be considered primary contractors - only assistants.

“This new approach does more than support private sector growth,” Thao added.

“It concretizes national resolutions encouraging technological innovation, and it offers tailored mechanisms for large-scale projects. More importantly, it creates a level playing field where domestic private firms can fairly compete with state-owned and foreign-invested enterprises, fostering long-term transformation across Vietnam’s entire railway industry.”

Tam An