Deo Ca (DCR) Khe Net Rail Tunnel Opens: First Train Runs on VND 2,000B Project

Overview

Deo Ca Group (ticker DCR, registered on UPCOM) announced that the first freight train passed safely through the Khe Net railway tunnel in Quang Tri province on 21 September, marking the start of commercial operation for the VND 2,000 billion-plus Khe Net pass rail renovation project. The work is the group’s first direct railway-tunnel construction contract, delivered through the Ilsung-Deo Ca consortium, and removes a long-standing bottleneck on Vietnam’s North-South railway.

Key Facts

• Total project investment exceeds VND 2,000 billion, funded by a Korean EDCF loan plus domestic counterpart capital.
• The first freight train cleared the Khe Net tunnel on 21 September, following a six-day trial run that stepped speeds from 5 km/h to 15 km/h and then 60 km/h.
• The new alignment includes two railway tunnels totalling roughly 935 metres in length and 10 metres in diameter, built to Grade I railway tunnel standard.
• Commercial operating speed through the tunnel is now up to 60 km/h, versus the previous sub-30 km/h restriction over the pass.
• The old Khe Net pass route spans more than 10 km with 43 curves and steep gradients, and previously took about one hour to cross.
• The Ilsung-Deo Ca consortium holds package XL01, covering the two new tunnels and related works.
• Deo Ca says some ancillary items remain outstanding before the full inauguration of the project.

What Happened

According to information from Deo Ca Group, the first freight train ran safely through the Khe Net railway tunnel in Tuyen Son commune, Quang Tri province, on the morning of 21 September. The run opened a six-day trial operation period in which train speeds were raised progressively from 5 km/h to 15 km/h and then to 60 km/h. Deo Ca said the operating results met technical requirements, providing the basis for putting the works into actual service.

The Khe Net pass route is more than 10 km long with 43 curves and steep gradients. Before renovation, train speeds through the area were typically held below 30 km/h and crossing the pass took roughly one hour, with heavy freight trains often requiring additional pushing locomotives at extra cost. The renovation project was launched to address those constraints, using an EDCF loan from South Korea and domestic counterpart funding. Under package XL01, the Ilsung-Deo Ca consortium built two new railway tunnels and associated items, replacing the old alignment with a Grade I standard tunnel section.

Market Context

DCR last closed at 4,500 on 14 September 2026 on UPCOM, the Hanoi exchange’s unlisted public company market, where liquidity and disclosure cadence differ from HOSE and HNX. The stock sits in the infrastructure and construction segment, which has been sensitive to public-investment disbursement and transport-ministry project awards. The Khe Net milestone lands as Vietnam pushes to raise capacity on the North-South railway corridor, where each removed bottleneck supports freight volumes and scheduling stability. The company metadata associates the ticker with the construction and materials sector, so the shares trade primarily on project pipeline and execution news rather than near-term earnings.

Strategic Significance

Khe Net is the first railway tunnel Deo Ca has built directly after years of accumulating capability in road tunnels, making it a credential for future rail packages as Vietnam prepares larger North-South high-speed and upgrade programmes. The project also demonstrates the group’s ability to execute under foreign concessional financing, a structure that governs a large share of Vietnamese transport infrastructure. For long-term holders, the thesis rests on whether this reference project converts into repeat rail awards and whether the group can manage the margin profile of rail work, which is technically demanding and schedule-sensitive. The removal of the Khe Net bottleneck itself improves throughput economics for the whole North-South line, reinforcing the policy case for further rail spending.

What to Watch

• Formal inauguration of the Khe Net project once remaining ancillary works are completed.
• Any new railway tunnel or North-South upgrade packages awarded to Deo Ca or the Ilsung-Deo Ca consortium.
• EDCF disbursement progress and counterpart-funding arrangements for the project.
• DCR disclosures on revenue recognition from package XL01 in upcoming financial statements.
• Freight volume and train-frequency data on the North-South line after the speed limit is lifted.