Drastic changes in store for railway system

Drastic changes in store for railway system

The Ministry of Transport has vowed to take drastic measures to restructure and improve the country’s stagnant rail sector.

Hanoi Railway Station

It is said that Vietnam Railways holds a monopoly over the sector, controlling both infrastructure and the business. Nguyen Xuan Thuy, an expert, said he was surprised when Vietnam Railways reported a VND170 billion (USD8.1 million) profit in 2013. Thuy said the state provided VND2 trillion for infrastructure development maintenance, while the company only contributed VND1 trillion to the state budget. “It’s a loss, not a profit,” he said.

Another expert said that Vietnam Railways is highly vulnerable to corruption, as they use the maintenance fund to award contracts to one of their subsidiaries without bidding and regardless of the cost. In addition, Vietnam Railways even allows unlicensed companies to rent their train cars.

At a conference last year, the deputy minister of transport, Nguyen Ngoc Dong, said that Vietnam Railways is a corporation, not a ministry, and that this reveals various management problems in the government. Dong said they are carrying out various measures to restructure and equitise Vietnam Railways.

The Prime Minister also demanded that authority to manage railway infrastructure and business be spread out to different entities, encouraging private firms and individuals to invest in the sector.

Even though the Ministry of Transport asked Vietnam Railways to upgrade its stations last year, the operator sent a request to build new roof and service buildings for the stations on January. The Minister of Transport Dinh La Thang then reprimanded Vietnam Railways for being slow, and assigned them a number of specific tasks such as improving the price of tickets, services on board and dirty stations.

Previously, Thang reprimanded many leaders of Vietnam Railways for playing golf most of the time instead of working. “Playing golf is everyone’s right. But it’s another matter if their work is not done,” he said.

Thang agreed to not let Vietnam Railways manage both the railway infrastructure and business.

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