Vietnam May Pick Sumitomo, Itochu for Bullet Train

2010-02-18

VIETNAM, planning to build Southeast Asia’s first bullet train, may choose a group of Sumitomo Corp. and Mitsubishi Heavy Industries Ltd., or Itochu Corp. and Kawasaki Heavy Industries Ltd. for the $56 billion project.

The country is favoring Japanese technology for the 1,555 kilometer (966 mile) Hanoi-to-Ho Chi Minh City line as Vietnam “is geographically similar to Japan with not enough land and too many people, and a long coastal line,” Nguyen Huu Bang, chairman and chief executive officer of Vietnam Railways Corp., said in an interview yesterday.

Vietnam plans to name the consortium for the line within about a year as it overhauls French colonial-era railways that are struggling to keep up with an economy that grew an average of 7.3 percent a year over the past decade.

The National Assembly is scheduled to approve preliminary proposals for the line in May, Hanoi-based Bang, 57, said. Vietnam will then call for tenders, and overseas investors will be chosen about nine months later, he said.

Vietnam Railways is likely to pick a consortium with Sumitomo and Mitsubishi Heavy, both based in Tokyo, or Osaka- and Kobe-based Itochu and Kawasaki Heavy, because they currently run lines in Japan that are similar to what would be built in Vietnam, Bang said.

The Nomura Research Institute has helped do some initial studies into the project, and Japan’s Ministry of Economy, Trade and Industry will fund a feasibility study that will start in June, Vietnam Railways said.