A train of Việt Nam Railways. Photo courtesy of VNR

HÀ NỘI — The railway sector is striving to escape losses and divest capital in many companies in 2023, the Committee for Management of State Capital at Enterprises said about the Project on Restructuring Việt Nam Railways (VNR) from 2021 to 2025.

The project has identified and evaluated the achievements and limit ations on the basis of a comprehensive assessment. The restructuring of VNR in 2016-2020 includes the production and business performance, the level of safety, security and defence, development and investment, science and technology and digital transformation.

It also sets out goals and plans for the restructuring of the corporation in 2021-2025, aiming at innovation, improved corporate governance, effective exploitation of resources, and enhanced labour productivity.

Additionally, VNR tries to achieve and exceed the targets assigned by competent authorities, fulfil the obligation to pay the State budget, ensure enough jobs, and improve the living standards of workers.

The project stated: "In 2023, the company needs to get out of the current state of loss and gradually make a profit to offset the accumulated losses of previous years.”

Last year, the corporation's production and business activities began to recover after the COVID-19 pandemic. Accordingly, VNR’s consolidated revenue reached more than VNĐ7.7 trillion (US$326.4 million), up 113.8 per cent over last year. However, VNR still recorded a loss of about VNĐ130 billion.

Increase capital divestment

Regarding the plan of organising and restructuring, VNR said that the corporation and its subsidiaries need to focus on the main business and handle inefficient subsidiaries and projects decisively.

With this goal, VNR proposes to divest and restructure its corporations and affiliated companies.

Specifically, the State continues to own 100 per cent of the charter capital of Việt Nam Railway, as well as at least 65 per cent of five corporations, between 50 and 65 per cent of 20 corporations, and less than 50 per cent of 16 corporations, while selling its entire stake in 13.

It also suggests merging Hà Nội Railway Transport Joint Stock Company and Sài Gòn Railway Transport Joint Stock Company into a Transport Joint Stock Company.

VNR will keep the current organisational model of 12 railway operating branches. In addition, a centre for science, technology and services will be established.

Ultimately, Việt Nam Railway is a single-member limit ed liability company with 100 per cent charter capital held by the State during 2022-2025 and continues to maintain the key business of management and exploitation of national railway infrastructure and operation of national railroads.

The implementation of the restructuring scheme as proposed will minimise costs in production and business activities, and increase efficiency in corporate governance.