Vietnam Railways set to receive gov’t contract for railway network maintenance
The state-run railway operator would be responsible to keeping smooth operation of railway system.

Vietnam Railways (VNR) is set to receive a government contract under the instruction of Prime Minister Pham Minh Chinh to maintain the country’s railway network for this year.
Railway worker at Hanoi Station. Photo: Pham Hung |
The move is seen as an effective solution to clear hurdles in disbursing state fund for maintaining the railway network and paying salaries of over 11,000 workers of VNR.
Under the PM’s decision, the VNR would be responsible to keep smooth operation of railway system in accordance with the law.
“The PM’s message is to create the utmost conditions for the railway sector to grow,” said VNR’s Chairman Vu Anh Minh.
Given the serious degradation of the railway infrastructure over 100 years of operation, former Deputy Minister of Transport La Ngoc Khue argued it is appropriate to hand the job of railway infrastructure development to the VNR, the state-owned operator of all railways in the country.
“Only those directly operate and supervise the system everyday can understand what should be done,” Khue said.
In April, the VNR sent a letter to the PM calling for the government support as the state firm is on the brink of bankruptcy.
According to the VNR, the railway operator was expected to receive VND2.8 trillion (US$121 million) in 2021 from state fund to repair the railway system and pay the salaries of over 11,300 workers.
But, four months on, the firm has not received the fund to cover its expenses.Under the State Budget Law, state budget recipient, in this case the Ministry of Transport (MoT), is only allowed to allocate funds for its subordinate units.
The situaiton became complicated when the VNR was transferred to the Committee for State Capital Management (CSCM) in 2019, meaning the ministry would have to disburse the capital for VNR via the Vietnam Railway Authority (VNRA).
But the main problem is that the VNRA does not have the capability to draft the estimate for the maintenance works as well as supervising the whole process.
Tip of an iceberg
While this remains an issue for the VNR, transportation expert Nguyen Xuan Thuy told Hanoitimes it is the old mindset and obsolete business approach of the railway sector that is making them dependent on state budget for operation.
“In the current market mechanism, other transportation modes by air, road and water have been transforming to enhance their competitiveness, the railway continues to stand still,” Thuy said.
“The railway sector keeps relying on state budget for operation but do not have any plan to move on in case the fund runs out,” he continued.
Sharing Thuy’s view, economist Ngo Tri Long noted it is the huge apparatus of the railway sector that is causing the problem.
“With over 11,000 workers, funds required to pay their salary is already a major issue, not to mention upgrading the infrastructure or revising business models,” Long told Hanoitimes.
“It is time for the sector to look at a comprehensive solution to revise its governance and business models, as they have to stand on their own feet,” he stressed.
Other News
- Vietnam prioritizes macroeconomic stability in 2023: PM
- Digital technology to spearhead Vietnam’s drive for Industry 4.0
- Business confidence in Vietnam improves to a three-month high: S&P Global
- Hanoi leaders call for high productivity after Tet break
- Hanoi's businesses resume operation after Tet
- Arrivals to Hanoi surge by over 300% during Tet holiday
- Foreign investors remain confident about Vietnam's business environment
- Vietnam’s tourism forecast to strongly rebound in five years
- Tourism firms upbeat about Vietnam's 2023 outlook
- Surge in travel demand in Vietnam's airports ahead of Tet
Trending
-
Vietnam prioritizes macroeconomic stability in 2023: PM
-
Hanoi creates favorable conditions for expansion of gas stations
-
Vietnam publishes book on Communist Party chief’s anti-corruption
-
Hanoi ranked 5th among safest cities in Southeast Asia
-
Hanoians show passion for flowers
-
Vietnam’s tourism forecast to strongly rebound in five years
-
Admiring 2,023 feline statuettes made by Hanoi artist
-
Overseas Vietnamese eagerly await Tet and spring
-
Switzerland to support Vietnam’s transition to green economy