The Vietnam Railways Corporation (VNR) has lost VND1.32 trillion (some US$56.8 million) in revenue due to the COVID-19 pandemic and flooding in the central region.

At a conference held recently to discuss the railways’ plans for this year, VNR Chairman Vu Anh Minh said revenue last year was down 21.7% to VND6.56 trillion (US$284.5 million).

The continuing pandemic threatened another difficult year for the railways, he said, adding that it also faced severe competition from low-cost airlines.

Work to upgrade the Hanoi-Ho Chi Minh City route at a cost of VND7 trillion (US$303.6 million) reduced its capacity by 25-30% during the construction period, he said.

The company had not received enough funds for developing basic infrastructure, making it difficult to attract private investors, he said.

Its market share had significantly fallen, while the number of passengers in some months last year plunged to record lows, he said.

If business does not improve this year, the company foresees a loss of VND3.25 trillion (US$140.9 million) for its two subsidiaries, Hanoi Railway Transport and Sai Gon Railway Transport, in the next two years, according to Minh.

It expects the performance to start recovering once COVID vaccines are rolled out across the world and the pandemic is under control.

Minh also hoped a plan to restructure VNR would be approved soon so that the firm can restructure its finances, investments, human resources and organisation and invest more in technology and services.

At the conference, Deputy Minister of Transport Nguyen Ngoc Dong admitted that the railway sector experienced a tough year.

Over the past decade, the sector failed to mobilise resources for its development. Meanwhile, the investment in the sector had increased slightly by VND4-4.5 trillion, mainly for infrastructure maintenance and social welfare and not for development.

Dong also said it would be difficult to eliminate the difficulties facing the sector in a short time.