Vietnam Railway Corporation (VNR) has plans to add new train cars to gradually replace all aging ones by 2021.

The railway sector has been replacing old train cars to raise its passenger transport market share to 11% by 2020

Six new trains will be built this year and cars which have been in service for 10 to 15 years will be rehabilitated. In the last two years, VNR has built 90 new cars valued at a combined VND957 billion (US$42.2 million).

VNR is using 1,000 train cars and 296 locomotives originating in many countries and many of them have been in use for 20 to 40 years. Some VND4.14 trillion is needed for new train cars and locomotives between 2016 and 2020.

According to a VNR report, the sector encountered numerous difficulties last year due to the rising competition of other means of transport, especially low-cost air services, and the impacts of storms and floods on railways.

Meanwhile, railway infrastructure development projects have been hit by financial constraints.

However, the number of railway passengers and revenue have increased. Particularly, VNR obtained revenue of nearly VND8.2 trillion last year, up 10.9% year-on-year and beating the full-year target by 1.9%, and after-tax profit of VND154 billion, exceeding the figure in 2016 and the plan for last year.

According to VNR, despite efforts to improve service quality, launch promotion programs and lower fares, the sector has not been able to meet the demand of passengers while logistics and transport services have remained underdeveloped.

The sector looks to attract more passengers, boost revenue by at least 8% and earn after-tax profit of VND158 billion this year. VNR will continue proposing relevant ministries and agencies spend VND7 trillion upgrading the north-south railroad and invest in 100 new locomotives in the 2016-2020 period.

Deputy Minister of Transport Nguyen Ngoc Dong said VNR should achieve growth of 8-9% and raise its passenger transport market share to 11% by 2020.

SGT