The Vietnam Railway Corporation (VNR) estimated a loss of VND3.2 trillion (US$139 million) in equity in its two subsidiaries, Hanoi Railway Transport and Saigon Railway Transport, due to the serious impact of Covid-19 pandemic, according to Chairman of the Vietnam Railway Corporation Vu Anh Minh.
|Vietnam railway sector could loss equity of US$139 million due to Covid-19. Photo: Hoa Thang|
According to the corporation’s report, in 2020, its revenue was VND6.5 trillion (US$282.6 million), equivalent to 78.3% compared to 2019. Average income of employees is VND8.27 million (US$360) per month, equivalent to 86.2% from a year earlier.
Specificially, two key company member of the VNR, Hanoi Railway Transport and Saigon Railway Transport estimated a combined loss of more than VND600 billion in 2020.
The Covid-19 pandemic thwarted the plan to restore passenger transport taking advantage of the peak traffic times in summer and Tet holidays. The number of train passengers per month only reached 30-35% compared to the same period of last year, the all-time low level in the history of the railway industry, Mr. Minh said.
The railway industry is forecast to continue facing challenging time in 2021 due to the pandemic. The railway infrastructure upgrade project worth VND7 trillion (US$304.3 million) which is underway is hampering normal operation of the industry, adding more difficulties to the sector, according to Mr. Minh.
In addition, the railway industry is facing stiff competition from aviation. Local airlines have kept selling tickets at promotional prices, affecting passenger and cargo volume in the railway sector. A plan to restructure the VNR in terms of finance, investment, human resources and technology and services, which was submitted almost three years ago for approval, is still "pending", according to the VNR.
Ms. Nguyen Thi Phu Ha, Vice Chairwoman of the Committee for State Capital Management at Enterprises, said that huge losses reported in 2020 would have strong implications on the industry’s development in the coming years.
In the past 10 years, the VNR has failed to involve private resources in railway development. It could only mobilize private funding once the restructure plan is approved, Ms. Ha said, adding that the VNR needs to submit to the Committee for State Capital Management at Enterprises different scenarios in 2021 for appropriate adjustment of the annual plan and government support.