Within the draft Law on Key Industries, currently under development, the Ministry of Industry and Trade proposes empowering the Prime Minister to decide on applying localization mechanisms for certain national key projects. These projects include high-speed rail, national railways, and urban railways.

The proposed mechanisms include: dividing bid packages to allow Vietnamese enterprises to participate, designating domestic investors or contractors for certain items, issuing a list of products and services requiring localization, and establishing a mechanism to ensure funding for implementation.

According to the drafting agency, the policy's objective is to increase the use of domestic goods and services. This aims to create opportunities for Vietnamese enterprises to participate more deeply in large-scale projects, enabling them to gradually master technology and enhance their competitiveness.

The draft also sets requirements for enterprises participating in the localization mechanism. Accordingly, enterprises must possess self-sufficiency in core stages such as manufacturing, maintenance, servicing, or repairing key equipment.

Additionally, enterprises are encouraged to undertake high-value-added tasks such as EPC general contractors, design general contractors, project development consultants, project management, system integration, facility operation, and manufacturing supporting industrial products for the projects.

Metro Line 1 Ben Thanh - Suoi Tien travels on Vo Nguyen Giap Street. Photo: Quynh Tran.

Beyond the railway sector, the localization mechanism is also proposed for many other key projects significantly impacting socioeconomic development, national defense, and security. This list includes: wind power, solar power, thermal power, small modular nuclear power, green hydrogen production, electronics, semiconductors, high-tech industries, oil and gas exploration and processing, strategic minerals, and projects related to environment and climate change response.

The Ministry of Industry and Trade stated that the policy of developing foundational industries, priority industries, spearhead industries, and supporting industries has been consistently established across many terms. Resolution 29, on continuing to accelerate the industrialization and modernization of the country, also calls for prioritizing resources and establishing strong enough mechanisms to develop fields such as: metallurgy, mechanical engineering, new materials, energy industry, digital technology, biotechnology, and supporting industries.

According to the drafting agency, there are currently no specific regulations on localization mechanisms for national key projects. The participation of domestic enterprises in large-scale works primarily depends on their competitiveness in individual bid packages or general incentive policies for investment, research and development, and technology transfer.

The draft also permits the application of direct ordering or domestic direct contracting for certain key industrial products and services. Applicable cases include: products appearing on the Vietnamese market for the first time, products resulting from scientific and technological research, or those serving national defense, security, energy, and environmental protection.

According to the Ministry of Industry and Trade, these mechanisms will contribute to creating stable output for domestic industrial products, encouraging enterprises to invest in technology, research, and innovation. This will ultimately enhance the self-reliance of Vietnam's industry.

Son Ha