Accelerating equitization of Vietnam Railway Corporation

Through the Prime Minister's Working Group, Prime Minister Nguyen Xuan Phuc requested the Vietnam Railway Corporation to report and clarify six issues of national concern, with the requirement to truly innovate and fundamentally change this transport industry.

On August 14, the Prime Minister's Working Group led by Minister and Head of the Government Office Mai Tien Dung inspected Vietnam Railway Corporation.

This is the 31st agency that the Working Group has inspected and the 6th unit inspected regarding the implementation of solutions related to ensuring the GDP growth target in 2017.

Speaking at the opening of the inspection, Minister, Head of the Government Office Mai Tien Dung, Head of the Working Group, said that the inspection aimed to fully and comprehensively assess the implementation of the tasks assigned by the Prime Minister and the Government to the Corporation and the implementation of measures to boost production, business, increase output, and transport passengers and goods. At the same time, it also detected difficulties and obstacles in the process of performing tasks in order to have solutions or measures to remove and adjust.

The Head of the Working Group stated that with a history of 135 years of formation and development, 28,000 officers and employees, and over 3,000 km of railway passing through 34 localities, the railway industry has made important contributions to socio-economic development in recent times.

In the first 6 months of the year, the Corporation has achieved many achievements, such as revenue of over 3,500 billion VND, up 3.8% over the same period, but only reaching 45.1% of the yearly plan. The Corporation has many solutions to organize production, especially applying some new technologies.

From the beginning of 2016 to August 10, the Government and Prime Minister have assigned the Corporation 57 tasks, of which 56 have been completed, and one task is overdue and has not been completed.

Through the Working Group, the Prime Minister requested the Corporation to report all solutions to ensure growth and implement Prime Minister's Directive 24. Specifically, what are the solutions to increase output and transport revenue to contribute to the overall growth target of the service sector in 2017 of 7.19% and the number of tourists to increase by over 30%?

Photo: VGP/Nhat Bac.

At the same time, through the Working Group, the Prime Minister requested the Corporation to report and clarify 6 issues of national concern, with the requirement to truly innovate and fundamentally change this transport industry.

Firstly, regarding the production and business situation and administration. Sales revenue and service provision in 2016 reached more than 6,500 billion VND, however, compared to 2015, it decreased by 12%.

“At present, it can be said that for passengers, railways are less attractive and less competitive than other industries, in terms of quality, safety, and market share decreasing over the years. We have investment infrastructure from North to South, but it is very old, and issues of railway gauge, infrastructure quality, and wagons... are still of little concern. Investment in loading and unloading warehouses, loading and unloading ports, and railway connections with airports, seaports, and industrial zones... are also of little concern,” the Head of the Working Group stated.

The Prime Minister asked the Corporation to calculate to increase competitiveness. “In other words, it seems that the subsidy ideology is still suppressed in the market economy. The Prime Minister reminds you to think more,” Minister and Chairman Mai Tien Dung conveyed the Prime Minister’s opinion.

Second, the Prime Minister reminded about the issue of railway safety, labor quality, and sense of responsibility of workers. In particular, people are very concerned about the situation of railway traffic accidents. Although it has decreased compared to 2016, recent incidents related to train safety, causing damage to carriages, infrastructure, and causing human casualties... The Minister mentioned specific incidents such as the accident at Yen Vien station, Hanoi and the incident of operating two trains on the same track at Suoi Van station (Binh Thuan), although not causing major damage, it shows the awareness and responsibility of officials and workers.

The third issue is calling for investors to participate in exploiting and implementing socialized infrastructure services.

“Before the meeting, the Chairman of the Corporation, Mr. Vu Anh Minh, mentioned some very encouraging issues, which are calling for investors to invest in warehouses, loading and unloading vehicles, connecting industrial parks, airports, seaports, etc. If it can be done, it will be very good. Containers transported by rail are much cheaper than by road, if there is a road connecting the railway to industrial parks and seaports, many investors will be willing. In addition to state investment, the industry needs to pay close attention to this, otherwise it cannot compete,” the Head of the Working Group stated clearly and emphasized the need to innovate operating technology, which is currently still too manual.

Fourth, it is necessary to pay attention to promoting the exploitation of existing infrastructure. In difficult conditions of investment capital, it is necessary to have solutions to maintain safety and focus on exploiting the maximum capacity on each specific route.

Fifth, the Prime Minister reminded the Corporation about the organization, management and implementation of projects to upgrade and renovate level crossings, especially the coordination with localities to build service roads.

Sixth is the issue of equitization. The working group said that the Corporation has done it quite early but the divestment has not yet met the requirements, although it may be due to the attractiveness and the market, but it must be accelerated.

Also at the meeting, the Head of the Working Group noted two tasks related to the Ministry of Transport. Specifically, it is necessary to review and report on the investment in upgrading railway infrastructure from 7,000 billion VND of government bonds. Second, at the Government meeting last March, based on the recommendations of the Working Group, the Prime Minister assigned the Ministry of Transport to urgently review the level crossings and residential paths to promptly handle black spots and potential accident spots, organize timely warnings and vigilance, and the Ministry needs to report the results.

"During the working process, if the Corporation needs the participation of ministries and the Government Office to resolve the problem, the Working Group will synthesize, report, listen to the difficulties to resolve them," Minister Mai Tien Dung emphasized.

According to government newspaper