VietNamNet Bridge - Soon after the Ministry of Transport (MOT) announced the plan to call for public capital for railway projects, business tycoons announced they were interested in investment, even though they have no experience in the field.

 

Local newspapers reported that Do Quang Hien, president of T&T Group, the big real estate and finance investor, is eyeing Hanoi railway station, the largest station which makes up 20 percent of total revenue.

Vingroup, a real estate company, is awaiting the Ministry of Transport’s nod on its plan to take over the three most important railway stations in Vietnam, including  Hanoi, Da Nang and HCM City stations.

The Hanoi railway station, named “Hang Co Station” in the past, became operational in 1902 after it was built by French. Located at No 86 Le Duan Street in inner Hanoi, it serves as an important hub for passenger and cargo transportation. 

A report showed that in 2011, the number of passengers on board nearly reached 3 million, while the revenue of the Hanoi station was VND771.1 billion.

Meanwhile, Sungroup has asked for the concession to provide services on key routes, including  Hanoi-Lao Cai, Hanoi-Da Nang and HCM City-Da Nang.

Analysts said that interest by businesses operating in many different business fields shows that the railway sector is an attractive investment channel.

However, they also warned that investors will be under pressure after a series of highways become operational soon.

Minister of Transport Dinh La Thang noted that though people complained about the high fee for traveling on Noi Bai-Lao Cai highway, they still want to travel on it.

“People nowadays would rather go on Noi Bai-Lao Cai highway which takes them 3-3.5 hours, and they do not want to take Thanh’s (Tran Ngoc Thanh, chair of the Vietnam Railway Corporation) trains anymore which take 10 hours,” Thang said.

Meanwhile, Dr. Nguyen Xuan Thuy, a transport expert, while admitting that the heavy burden on the state would be eased if it allowed private investors to develop railway projects, warned that private investments may cause serious consequences.

Private investors try to optimize their profits when making investments in any project. Therefore, they may withdraw capital if they find railway projects unprofitable.

It is still unclear about the fate of the Hanoi railway station. However, Thanh from the Vietnam Railway Corporation (VRC) said in a local newspaper that Hanoi station will not be put up for sale. 

“We only call for investment in the railway station, while we do not intend to sell the station definitely,” he said.

GTVT