Vietnam Railways saved with allocation of maintenance funding

Representatives of the MoT and VNR signing the contract for maintenance funding

The Ministry of Transport (MoT) and state giant Vietnam Railways (VNR), the operator of the country’s railway network, on May 24 signed a contract on the management and maintenance of the national railway network in 2021 using state funding.

Accordingly, the implementation of the contract is carried out till the end of 2021. The total contract value is over VND2.82 trillion ($122.6 million).

Under the contract, VNR is responsible for the management and maintenance of the national railway network in 2021 to ensure the smooth operation of railways, security, and safety.

The MoT committed to advance 50 per cent of the total contract value to VNR within five working days of the signing. The signing was made following the prime minister’s issuance of Document No.636/TTg-CN dated May 19, asking the MoT to place the order on the management and maintenance of the national railway network in 2021 with VNR before May 24.

The move helps to ease the minds of stakeholders and thousands of labourers in the railway industry who have been uncertain about their future and salaries.

Since the beginning of 2021 till May, a state funding of VND2.82 trillion for railway maintenance in 2021 had not yet been allocated to VNR, thus hindering the 20 member companies to pay salary for workers and buy spare parts.

In the past, when VNR was under the direct management of the MoT, it was directly allocated funding. However, since the giant was transferred to the Commission for the Management of State Capital at Enterprises, it has been experiencing funding difficulties as the MoT is now only able to allocate funds to its directly-managed Vietnam Railway Authority (VRA).

This is not the first time that the railway industry is stuck. In 2020, the prime minister also had to issue a resolution to solve similar problems.

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