return icon Vietnamnet.vn

Transport giants clamour for government support

Despite the supporting policies soon ahead, state-owned transport giants will take some time to recover from the global health crisis as a fault in global supply chains remains apparent.

1491p6 transport giants clamour for government support
Transport giants clamour for government support

In late April, Vietnam Railways (VNR) increased the number of trains on the North-South network after nearly a month of running only a couple of carriages as requested by the government to prevent the spread of the coronavirus.

A representative of VNR said that it has not enjoyed any incentives. “We are waiting for the government’s supporting policies especially involving taxes; exemption of infrastructure use fee which makes up 8 per cent of VNR’s total revenue annually; restructuring of the debt repayment period; and continuation of lending working capital to ensure their operation,” he told VIR.

Fortunately, what VNR expects are included in the government’s latest draft resolution on the supporting policies for businesses which is being completed for issuance. The VNR representative however admitted, “Even when we get the financial supporting tools, the railway sector will take about three to four years to recover.” For this year, the corporation estimates the parent company’s revenue might fall by VND700 billion ($30.43 million) to VND1 trillion ($43.47 million) compared to the yearly targets, and a loss of VND694 billion ($30.17 million) to VND935 billion ($40.65 million), depending on when the pandemic ends.

The concern is convincing as its performance has suffered in the last decade due to stiffening competition, limited state funding, and downgraded infrastructure despite strong efforts. At present, VNR’s passenger and cargo transport market shares are just 0.2 and 1.2 per cent, respectively.

Similarly, shipping conglomerate Vietnam Maritime Corporation (VIMC) is hoping for financial tools to come into effect soon. VIMC desires to get extension of the lending term for credit contracts without a fine on late payments, to restructure the debt repayment period, and to continue to lend working capital to ensure operation. VIMC is also owner of heavy bank loans used to purchase the fleet of the sunken state-run Vietnam Shipbuilding Industry Group. Meanwhile, logistics and seaports are affected due to a break in the global supply chain.

“VIMC’s recovery, especially in shipping, and logistics will much rely on the time of controlling the pandemic among countries, and all economic activities resume operation globally,” Nguyen Canh Tinh, CEO of VIMC.

No better than the others, national flag carrier Vietnam Airlines is in need of supporting policies. Most urgent for the group may be extension of the lending term for credit contracts without a fine on late payment, restructuring of the debt repayment period, and continuation to lend working capital to ensure their operation. In addition to this is reduction of fees for taking off, landing, and flight control for VNA, and other taxes.

It was reported that in early 2020 Vietnam Airlines had reserves of VND3.5 trillion ($152.17 million), but has all but vaporised due to the pandemic. As aviation is one of the transport segments being hardest hit by the pandemic, Vietnam Airlines is one of the largest victims when in the first quarter of 2020, its consolidated revenue fell by VND6.7 trillion ($291.3 million) from the same period last year to VNDVND19.2 trillion ($834.78 million), thus hitting a loss of VND2.38 trillion ($103.47 million).

Last week Vietnam Airlines Group, which includes Vietnam Airlines, VASCO, and Jetstar Pacific announced plans to resume all their domestic air routes from June. Experts, however, said that Vietnam Airlines will take months to return to its golden age of double-digit growth rate and record profits. The airline projects a loss of VND19.65 trillion ($854.34 million) for the whole year.

Other transport titans like Airports Corporation of Vietnam and Vietnam Expressway Corporation are forecast to suffer losses this year at VND140 billion ($6.08 million), and VND9.33 trillion ($405.65 million) respectively, despite having access to financial support tools.

“Looking forward, the scenario will continue to be hard as flights to and from international routes are still being suspended and lockdown in many countries amid serious global COVID-19 developments,” said a senior economist. VIR

Bich Thuy

VN railway operator requests $2.5 million bailout to support local routes

VN railway operator requests $2.5 million bailout to support local routes

The Vietnam Railways Corporation (VNR) has asked the Government for a bailout of VND60 billion (US$2.5 billion) to support three local routes suffering devastating drops in travel demand due to COVID-19.

Vietnam Airlines posts heavy losses due to Covid-19

Vietnam Airlines posts heavy losses due to Covid-19

Vietnam Airlines has announced in its Q1 financial report that its first quarter losses were greater than its 2019 profits.

MORE NEWS

Deputy PM highlights significance of int'l solidarity, cooperation at UN session

The strengthening of international solidarity and cooperation is key to addressing interlocking global challenges, affirmed Permanent Deputy PM Pham Binh Minh while addressing the general debate of the 77th Session of the UN General Assembly.

Huge potential for luxury real estate in Vietnam

The branded residence market is gaining a stronger foothold in the Vietnamese market with potential to further develop, shaping the lifestyle of the country’s elite, according to experts.

VIETNAM BUSINESS NEWS SEPTEMBER 25

Action plan to promote green growth in agriculture

Vietnam’s economic growth counts on high-tech FDI

Vietnam’s economic growth has been accelerating in 2022, with experts considering high-tech foreign investments as a driver.

The “seven-star” islands in Quang Ninh

Along with crystal blue sea and beaches, the 7 Sao (seven star) islands also have caves and primeval forests.

Customs you only see in Vietnam

The travel site Culture Trip has listed a number of Vietnamese customs that often surprise foreign tourists:

Investors and buyers play waiting game in credit switch

The State Bank of Vietnam finally created extra credit room for some banks on September 7. However, the extension is deemed low and may not help real estate businesses and homebuyers access feasible capital sources for their projects.

Woodwork exports to EU, US drop as consumers cut spending

Many woodwork manufacturers complain that exports have been sliding as people in target markets have been tightening their purse strings.

Vietnam: new destination for multinationals to set up R&D centers

Vietnam wants to upgrade foreign direct investment (FDI) quality by manufacturing products with higher hi-tech and added value, and multinationals are also striving to do this after many years in Vietnam.

Huge real estate projects seek new investors

Many investors have quit large-scale investment projects capitalized at trillions of dong.

VIETNAM NEWS HEADLINES SEPTEMBER 24

Work starts on Tan Van-Nhon Trach section of HCM City’s Ring Road No.3

Three Vietnamese airlines named among world’s best air services

Vietnam Airlines, Vietjet Air, and Bamboo Airways have been honoured in different categories by Skytrax, a UK-based site which ranks airlines and airports.

Vietnam Days Abroad 2022 to take place in Austria, India, RoK

Vietnam Days Abroad 2022 will be held in Austria, India, and the Republic of Korea (RoK) on the occasion of the anniversaries of diplomatic relations between Vietnam and these countries.

UN backs Vietnam’s development priorities: Secretary-General

The United Nations (UN) will continue paying attention to and support Vietnam's development priorities towards green and sustainable orientations, and just transition, especially in terms of financial access.

Vietnam merits seat at UN Human Rights Council: Washington Times

The Washington Times has published an article in which it supports Vietnam's candidacy for the United Nations Human Rights Council (UNHRC) for the 2023-2025 term.
back_to_top