HANOI, June 8 (Engineering Daily) -- With over 100 years developing, Vietnam railway industry is one of the pioneer sectors in the renovation and construction of the country, especially after the war time. However due to the development of cheap aviation, railway cannot maintain the position anymore. Along with the development of the road sector, the highways are built more and more modernly, shortening the distance and travel time. Therefore, the railway passenger number reduces day by day. Facing with fierce competition, the railway sector must ask itself a question, "how to change".
The grey picture of Vietnam railway sector can be listed as followings;
The first is transportation cost. It is clear to compare the North South train ticket price to flight ticket. The train fare is of VND 1,000,000 – 1,200,000 while the cheap flight ticket is of VND 500,000-1,000,000 including VAT and other attractive promotions. Thus, travelling by train is not the first choice any more.
Secondly, travel time is one of the matters. It takes about 29 hours to travel from the North to the South whereas only 1.5-2 hours for flight. Similar to travelling, the goods transportation using train is much slower than using road and waterway.
The third one is poor services. Railway service now only receives transportation from departure to terminal station. If one enterprise wants to send the goods, they have to transport those to the station. It means that the railway sector has not yet received a whole package. Meanwhile, other sectors such as road and waterway, they always actively look for guests, approach and convince the customers to use the service with a very competitive cost.
The market share of railway sector is decreasing because of abovementioned factors. In particular, the passenger rate was of 9.9% in 2000, 4.6% in 2010 and only 2% in 2014. Whereas, the road transportation, in 2014, goods transportation rate occurred 61.43% and 95.75% for passenger transport. In the year 2000-2001, air transport accounted for only 0.5% of the passengers, but 2.05% of passenger transport in the year 2014.
About profit, in 2015, Vietnam Railway Corporation only got VND 65 billion and tried to increase to 69 billion in 2016. It is the big gap that Vietnam Airlines had VND 1,400 billion in profit, VND 80 billion for Jetstar Pacific and VND 1,050 billion for Vietjet Air.
Currently, the Vietnam Railway Corporation has allocated too many agencies to manage the asset with lack of concentration, heavily administrative procedure and subsidization. According to the Ministry of Finance, the operation effectiveness of Vietnam Railways is too low in the past years, only about VND 350 billion / year, the state budget must still subsidize about VND 1,200 billion / year for maintenance.
Therefore, the Ministry of Finance has prepared the draft stipulating the management, use and trading of railway infrastructure property. Also the ODA call to rehabilitate and upgrade the railway system is necessary. According to the Ministry of Finance, $ 10 billion will be needed to maintain existing rail system up to 2020. To achieve the target under the railway development strategy to 2030 set out, about $ 100 billion fund will be promoted.
