National Assembly 'finalizes' series of preferential policies for private enterprises building railways

Panorama of the final meeting day of the 9th Session, 15th National Assembly - Photo: GIA HAN

On the morning of June 27, with 426/440 delegates present in agreement, the National Assembly passed the Railway Law (amended).

Prioritize railway budget

Notably, this law provides many preferential policies and State support for railway development.

Accordingly, budget priority is given to investment, upgrading, maintenance and protection of railway infrastructure; development of railway industry and human resource training; affirming the leading role of railway in transportation, serving socio- economic development and national defense and security.

Mobilize local resources to participate in compensation, resettlement support, and investment in construction of a number of items belonging to the national railway infrastructure within the locality where the railway project passes through.

Prioritize land allocation for developing railway infrastructure and railway industrial works in the land use planning process.

Railway infrastructure business serving railway transport activities; railway transport business; railway industry and railway human resource training are investment incentive industries and professions.

Organizations participating in railway infrastructure business are allowed to use radio frequency bands exclusively for railway traffic operations and traction power supply systems serving train operations.

Railway enterprises are given preferential land use fees and loan guarantees.

In particular, the new law stipulates that organizations and individuals participating in railway business activities are entitled to incentives and support such as exemption or reduction of land use fees and land rent for land reserved for railways.

Enterprises are also entitled to borrow investment credit capital from the State or receive Government guarantees on loans when investing in the development of national and local railway infrastructure; purchasing railway vehicles, machinery and equipment for railway infrastructure maintenance; and developing the railway industry.

The State supports a portion of the State budget capital and preferential credit capital for organizations participating in railway business activities in areas with difficult socio-economic conditions; and subsidizes public passenger transport activities by urban railway.

Along with that, priority is given to purchasing and using domestic goods and services or must purchase and use goods and services from domestic manufacturers or service providers, except for railway construction investment projects and projects to purchase and build new railway locomotives and carriages.

Enterprises participating in investment and development of railway industry and railway infrastructure business enjoy preferential corporate income tax rates.

Encourage, support, facilitate and protect the legitimate rights and interests of domestic and foreign organizations and individuals investing in and doing business in railway infrastructure and railway transport; connect railways with other modes of transport; develop the railway industry, research, apply science and technology, transfer technology, digital transformation and train and develop human resources.

Designated bidder when selecting investors for railway projects

Regarding the regulations on selecting railway contractors, the new law stipulates that the person with the authority to decide on investment in railway projects is allowed to apply one of the following forms: restricted bidding, designated bidding when selecting investors, contractors providing goods, consulting services, non-consulting services, construction contractors, contractors performing EPC, EC, EP, and turnkey contracts.

The order and procedures shall comply with the provisions of the law on bidding, other relevant legal provisions and in accordance with international treaties to which the Socialist Republic of Vietnam is a member.

The investor is allowed to decide to use foreign contractors for consulting and pre-implementation activities for the railway project.

Investors are not required to apply regulations on ensuring competition in bidding for consulting contractors preparing Feasibility Study Reports, FEED designs, and technical designs in cases of designated bidding to implement construction, EPC, EC, EP, and turnkey packages, but must still ensure compliance with other provisions of the law on bidding.