VietNamNet Bridge – Vu Anh Minh, Chairman of the Viet Nam Railways Corporation, tells the Thoi bao Kinh te Viet Nam (Viet Nam Economic Times) that the shortage of funds makes investment decisions difficult for the sector.

Vu Anh Minh.

Some people have blamed the “weak service” of Viet Nam railways, compared to other means of transport, for its poor investment-attracting capacity. How would you respond to that charge?

I have to admit that investment in the railway sector is not attractive to investors, including institutions, individuals and businesses. We all know that development of railway infrastructure requires huge investment capital. That’s why in other countries, governments are the main investors in railway infrastructure. 

Due to State Budget limitations, the government has to focus its investment budget on means of transport that can generate quick returns on investment. For example, with VND10 trillion (US$440 million) we can build a road to boost socio-economic development of a region, but a new railway route needs a lot more money.

Besides, a railway line cannot stand by itself, but has to link with other forms of transport. However, we cannot deny that investment in the railways sector is very important in a country’s economic development. In other countries, including Russia, Japan, China, huge sums of money have been invested in the railway sector in recent years. For example, China now has some 30,000km of express rail lines.

We should also remember that railways have several advantages over other means of transport. It is fast, safe and can carry many passengers and cargo at low cost.

When we invest in a new road, the transportation capacity of that route is doubled. But with a new railway route (with a width of 1.435m), transportation capacity will increase 10 times.

What should the railway sector do to attract capital from sources outside the State budget?

At present, our investment capital comes from three main sources: the State Budget, which is used for infrastructure development; financial investment from other sectors is used to build railway stations, warehouses, dry ports, loading/unloading goods and transportation connections; and the third source, is various forms of credit. This source is typically used for maintenance work, manufacturing new carriages and locomotives or refurbishing old ones.

We have developed a plan to attract investment from the public to renovate railways stations, carriages and storage facilities.

Since funding is scarce, what are the priority areas on which Viêt Nam Railways will focus its investments?

For the immediate future, we will focus our investment in upgrading some railway stations, particularly rails running inside them, which are just 300-400m long. Now, stations can only accommodate trains with 19 coaches or wagons. Once the upgrade is completed, they will be able to accommodate trains with 25 coaches. The new stations will also be able to service 25 pairs of trains (travelling in both directions) in 24 hours.

According to our plan, by early 2018, VNR will have 100 new locomotives to replace obsolete ones. This June, we will start operating a high quality train. This will increase to four in 2018. In addition, VNR will upgrade its rail infrastructure, particularly rail bridges and tunnels along the North-South route.

What are VNR’s plans to increase connectivity when its tonnage increases?

We will have to upgrade warehouses and develop more inland container depots; and invest more in loading and unloading equipment. Of course, logistics will be a focus. More recently, the VNR signed agreements with the New Sai Gon Port Corporation to build two Inland Container Depots - one in Song Than (Binh Duong Province) and the other in Dong Anh (Ha Noi).

Does the VNR have a plan to attract more passengers?

Yes, besides upgrading trains and stations, in the near future, we will apply different ticket-sales models, including allowing reservations six months in advance and offering discount tickets.

We are planning to pilot a new service by providing free two-way transport services to passengers from the railway station to their destinations. This service will be offered on the Ha Noi-Cua Lo, Ha Noi- Sa Pa and other routes. 

VNS