Illustrative image (Photo: VNA) Hanoi (VNS/VNA) - The VietnamRailway Corporation (VNR) faces the most difficult period in its history due tothe COVID-19 pandemic and flooding in central Vietnam, according to VNRchairman Vu Anh Minh.
The corporation expects to record a loss ofabout 2 trillion VND (85 million USD) this year while it gained a profit of 182billion VND in 2019. Its consolidated revenue this year is estimated at 6.5billion VND, just 77 percent of the figure last year.
According to the VNR report on production andbusiness, in the first nine months of this year, cargo volume was estimated atmore than 3.6 million tonnes or 99 percent of the same period of last year. Therailway served about 3 million passengers, a reduction of 54.3 percentyear-on-year. Therefore, its revenue in the first nine months decreased by 34.2percent to 2.27 trillion VND.
The railway industry faces increasingcompetition from other means of modern transport such as aviation, while therailway sector is still not modernised, causing the number of passengers usingtrains to decrease, according to Minh.
VNR's only advantage is its ability totransport passengers on short and medium routes on which airlines have a smallnumber of flights such as Hanoi-Quang Binh, Hanoi-Lao Cai and Sai Gon-Nha Trang.
To recover, Minh said resuming the industrywould depend on the development of the pandemic. In addition, theimplementation of the 7 trillion VND project package to upgrade the Hanoi-HCMCity railway would reduce its capacity.
The railway industry is unlikely to recoverin 2021, according to Minh. It needs at least 3-4 years to recover productionand business. The capacity of transporting passenger and cargo could increaseafter the infrastructure upgrade is completed, then revenue could increase.
This project is expected to finish on June30, 2021, but this deadline looks likely to be missed. Implementation of thisproject could be extended by six months, making the VNR lose trillions of VNDof revenue.
Passenger transportation has faced manydifficulties so the railway industry has promoted freight transport on domesticor international railway routes from 2019, according to the corporation.
For cross-border routes, VNR’s trains havetransported cargo weekly through China, Kazakhstan, Russia and Europe. Besidestransporting traditional products such as iron, steel, cement and petroleum,the corporation has opened routes to transport goods containers of Viettel andVietnam Post.
To attract more customers, the corporationhas also offered services to transport frozen goods, and import and exportfruits.
However, the corporation has struggled touse standard train cars on the Chinese railway. Therefore, it musttransfer goods to other train cars at Bang Tuong Station to transport goodsfrom Vietnam to China and third countries.
Minh said amid the COVID-19 pandemic, freighttransport had played a key role despite the low revenue. Freight transportationin the first nine months of this year increased by about 10 percentyear-on-year, of which it surged by 20 percent in September.
According to Nguyen Hoang Thanh, deputygeneral director of the Railway Transport and Trade Joint Stock Company(Ratraco), trains can transport a large volume of cargo over long distanceswith high safety. Transport by train takes 18-20 days compared to 40-45 daysfor marine transport. This is a great competitive advantage, especially forgoods that need particular storage conditions and fast delivery times.
At present, the railway industry was seekingnew sources of cargo and international routes for transporting cargo, Minhsaid. However, the warehouse system along the railway line, the ability tocollect goods and high loading and unloading costs were barriers for thisplan./.
The corporation expects to record a loss ofabout 2 trillion VND (85 million USD) this year while it gained a profit of 182billion VND in 2019. Its consolidated revenue this year is estimated at 6.5billion VND, just 77 percent of the figure last year.
According to the VNR report on production andbusiness, in the first nine months of this year, cargo volume was estimated atmore than 3.6 million tonnes or 99 percent of the same period of last year. Therailway served about 3 million passengers, a reduction of 54.3 percentyear-on-year. Therefore, its revenue in the first nine months decreased by 34.2percent to 2.27 trillion VND.
The railway industry faces increasingcompetition from other means of modern transport such as aviation, while therailway sector is still not modernised, causing the number of passengers usingtrains to decrease, according to Minh.
VNR's only advantage is its ability totransport passengers on short and medium routes on which airlines have a smallnumber of flights such as Hanoi-Quang Binh, Hanoi-Lao Cai and Sai Gon-Nha Trang.
To recover, Minh said resuming the industrywould depend on the development of the pandemic. In addition, theimplementation of the 7 trillion VND project package to upgrade the Hanoi-HCMCity railway would reduce its capacity.
The railway industry is unlikely to recoverin 2021, according to Minh. It needs at least 3-4 years to recover productionand business. The capacity of transporting passenger and cargo could increaseafter the infrastructure upgrade is completed, then revenue could increase.
This project is expected to finish on June30, 2021, but this deadline looks likely to be missed. Implementation of thisproject could be extended by six months, making the VNR lose trillions of VNDof revenue.
Passenger transportation has faced manydifficulties so the railway industry has promoted freight transport on domesticor international railway routes from 2019, according to the corporation.
For cross-border routes, VNR’s trains havetransported cargo weekly through China, Kazakhstan, Russia and Europe. Besidestransporting traditional products such as iron, steel, cement and petroleum,the corporation has opened routes to transport goods containers of Viettel andVietnam Post.
To attract more customers, the corporationhas also offered services to transport frozen goods, and import and exportfruits.
However, the corporation has struggled touse standard train cars on the Chinese railway. Therefore, it musttransfer goods to other train cars at Bang Tuong Station to transport goodsfrom Vietnam to China and third countries.
Minh said amid the COVID-19 pandemic, freighttransport had played a key role despite the low revenue. Freight transportationin the first nine months of this year increased by about 10 percentyear-on-year, of which it surged by 20 percent in September.
According to Nguyen Hoang Thanh, deputygeneral director of the Railway Transport and Trade Joint Stock Company(Ratraco), trains can transport a large volume of cargo over long distanceswith high safety. Transport by train takes 18-20 days compared to 40-45 daysfor marine transport. This is a great competitive advantage, especially forgoods that need particular storage conditions and fast delivery times.
At present, the railway industry was seekingnew sources of cargo and international routes for transporting cargo, Minhsaid. However, the warehouse system along the railway line, the ability tocollect goods and high loading and unloading costs were barriers for thisplan./.
VNA
