The Vietnam Railway Corporation wants the competent authority to allow it, together with other local railway industrial enterprises and foreign partners to establish a joint venture operating in the railway industry, in which the local party will hold a controlling capital contribution ratio. Photo vietstock.vn

HÀ NỘI - The Ministry of Transport (MoT) has recently required the Vietnam Railway Corporation (VNR) to refine its proposal on establishing a joint venture to develop the railway industry.

The direction was made after the VNR sent a written document requesting the MoT to report to the Prime Minister its proposal on establishing a joint venture to develop the railway industry.

After the amendment, the proposal will be submitted to the Committee for State Capital Management at Enterprises for consideration, then over to the Prime Minister for approval.

According to Deputy Minister of Transport Nguyễn Danh Huy, the VNR’s proposal needs to clarify the VNR's current technological level in the railway industry, the production and business lines of the joint venture and the level of product participation and the localisation rate by VNR in the joint venture.

In addition VNR should study and make detailed proposals on the specific pricing policy, which is suitable to reality and ensures compliance with the provisions of law, to submit it to the Prime Minister for consideration.

According to Huy, the laws related to the issue currently do not regulate the ordering and underwriting of railway industrial products. Railway industrial products are goods on the market so they need to meet quality requirements and their prices must be competitive according to market rules.

"Therefore, the VNR needs to clarify the difference between railway industrial products and ordinary goods to make proposal on ordering and underwriting the products," Huy noted.

In the proposal sent to the MoT in September this year, the VNR wants the competent authority to allow it, together with other local railway industrial enterprises and foreign partners to establish a joint venture operating in the railway industry, in which the local party will hold a controlling capital contribution ratio.

In order for the joint venture to stand firm when it comes into operation and at the same time attract big domestic and foreign mechanical names into Việt Nam’s railway mechanical industrial complex, the VNR proposes three specific policies.

First, ministries and branches need to develop a specific pricing mechanism for railway industrial enterprises when establishing a joint venture. The Government will order and buy products of the joint venture within a certain period of time.

Second, the Government should add railway industrial products to the list of the country’s key mechanical products regulated in the Draft Law on Production of Key Industrial Products.

Finally it will be necessary to develop a mechanism for pricing land and assets of railway enterprises to increase enterprise capital, bring advantages and ensure the rights of Vietnamese enterprises participating in the joint venture.