The Ministry of Transport (MoT) on May 24 signed a contract with the Vietnam Railways (VNR) for the maintenance of the country’s railway network using state fund.

Overview of the signing ceremony. Source: Ministry of Transport

The contract ceremony took place with the presence of Minister of Transport and Chairman of the Committee for State Capital Management (CSCM), state capital representative at the VNR.

Under the contract agreement, the VNR would be responsible for regular and urgent reparation and maintenance of the national railway network in the country, ensuring smooth operation of the railway sector.

The validity of contract is set to be effective from January 1,2021 to December 31, 2021, with the value of VND2.82 trillion (US$122.47 million).

Minister of Transport Nguyen Van The urged the VNR to soon carry out the maintenance works as stipulated in the contract, while ensuring lawful rights and wages of railway workers.

Prime Minister Pham Minh Chinh on May 19 issued instruction requesting the MoT to handover the responsibility of maintaining the railway network to the VNR before May 24.

The move came following VNR’s letter to the PM calling for the government support as the state firm is on the brink of bankruptcy.

With more than 11,000 workers, the VNR is struggling to pay their salaries and keep its trains operational without state funding.

However, under the State Budget Law, only agencies depending on state budget support, in this case, it is the MoT but the CSCM, is allowed to allocate funds for its subordinate units, so PM’s decision helped clear the hurdles in timely providing funds for the VNR.