Vietnam Railways reports loss in 2020, urging clearance of legal problems

January 11, 2021 | 18:30

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With a loss in 2020 due to COVID-19 and legal barriers, the country’s railway giant Vietnam Railways is urging authorised agencies to soon deal with legal problems to facilitate its operations, enabling it to fulfil future targets.

vietnam railways reports loss in 2020 urging clearance of legal problems

Vietnam Railways held a meeting to review its 2020 performance and set targets for 2021

Vietnam Railways on January 8 held the meeting to review the 2020 performance and set targets for 2021 with a number of difficulties expected down the road.

Vu Anh Minh, chairman of VNR, said that the global health crisis and storms in the central region have caused a loss of VND1.33 trillion($57.83 million) last year. “If the bad situation continues this year, our equity of VND3.25 trillion ($141.3 million) will all be gone by the end of 2022.”

Vu Anh Minh, chairman of VNR

Statistics from VNR showed that its consolidated revenue reached VND6.56 trillion ($285.22 million) during the year, equal to 78.3 per cent of the year earlier. The parent company’s revenue was VND1.71 trillion ($74.35 million), fulfilling 81.6 per cent of the yearly target and equal to 66.6 per cent of 2019.

According to Minh, in addition to the pandemic and storms, legal barriers are another important reason for the poor performance. The restructuring plan and the draft master plan in line with Decree No.46/2018/ND-CP governing the management and use of railway infrastructure assets have not been approved, thus hindering the giant in taking the next steps in development.

Deputy Transport Minister Nguyen Ngoc Dong

Addressing the meeting, Deputy Transport Minister Nguyen Ngoc Dong said that in the last 10 years, the railway sector failed to mobilise resources for its development plans. Meanwhile, state funding for railways, despite an increase, was just VND4-4.5 trillion ($173.9-195.65 million) which is mostly used for maintenance works and social security, not for development plans.

Dong noted that among the difficulties, downgraded infrastructure remains a big bottleneck which cannot be improved in a short time. It needs a long time to improve, along with changes in mindset, investment, and management.