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Vietnam Railway Corporation seeks nearly $35 million loan to sustain operations

To survive in the Covid-19 pandemic, the Vietnam Railways Corporation (VNR) has applied for a non-interest loan package worth VND800 billion (nearly $35 million), according to Vu Anh Minh, VNR Chairman.

 

Tổng công ty Đường sắt xin vay 800 tỷ để hoạt động cầm cự

 

 

Minh said the proposal had been submitted to the Committee for Management of State Capital at Enterprises. The VNR will pay the debt when the market recovers and when VNR has enough money.

According to Minh, VNR has had a loss of more than VND2,200 billion since the pandemic occurred last year. However, the company only asked for a VND800 billion loan, the minimum capital for the corporation to maintain its operations.

In these difficult circumstances, VNR has tightened governance, reduced costs, and cut employees' salaries.

According to VNR’s report recently sent to the Committee for Management of State Capital at Enterprises, its output and revenue dropped sharply in 2020, at 81% of 2019, and it had a loss of VND 1,300 billion.

Over the past five months, VNR’s revenue plunged. During the Lunar New Year, Reunification Day and International Labor Day holidays, passengers returned more than 11,000 train tickets worth nearly VND4 billion.

In May, 393 trains were suspended. During some periods, only two trains on the Hanoi-HCMC route were operational, while all trains to localities were suspended.

It is estimated that the corporation will have a loss of VND942 billion in 2021. If the epidemic continues and lasts until 2022, VNR will lose all its equity and may have to cease operations.

Along with the proposal for a non-interest VND800 billion loan, VNR also asked for policies to support its 13,000 workers. Moreover, it expects that over 6,000 employees of the railway sector at high risk of being infected with the coronavirus will be vaccinated against Covid-19.

At present, nearly 1,200 employees of VNR have had their employment contracts suspended and 136 others have taken unpaid leave.

The corporation also proposed reducing railway infrastructure use fees this year and in the following years, and reducing or exempting the land use fees for railway transportation firms this year and extending the fee payment deadlines.

Vu Diep

Ambitious railway development plan in Vietnam until 2030

Ambitious railway development plan in Vietnam until 2030

Along with upgrading railway routes, Vietnam has ambitious plans to develop a number of new ones during 2021-2030 to strengthen regional economic development.

 

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