Restructuring Vietnam Railways: Necessity to separate freight and passenger transportation

The Hanoitimes – Vietnam’s railway sector is at the crossroad as reform is needed to stay ahead, or facing the risk of being left behind. The restructuring process now put focus on the divestment process of Vietnam Railways (VNR). With regard to the equitization process of VNR, the government is expected to reduce its share at the company to 51% to invite investors, with an aim to implement restructuring plan and competing with other transportation models, said the Chairman of Board of VNR Vu Anh Minh. VNR has previously completed the first phase of restructuring plan in scaling down its business lines, which focuses on freight transportation and increased the chartered capital to VND 3,2 trillion (roughly US$ 141 million).  In period 2017 – 2020, VNR will continues phase two of the restructuring plan. Priority will be placed in the improvements of productivity and efficiency in operation, merging the Hanoi Railway Transport and Saigon Railways into a company specialized in freight transportation. In the future roadmap, VNR will divest all of its state fund from this company as soon as it starts having profitability.  Stating the reason for this merging, Hanoi Railway Transport and Saigon Railways at present are providing freight and passenger transportation services, but this model proved inefficient as both companies have been sustaining losses. As they are operating non-stop train route from north to south, it is unlikely that the train can stop at a certain station for passengers to board in or changing the route. However,… [Read full story]

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