VNR could be the key cog for an ambitious rail route connecting north and south, Photo: Duc Thanh

Speaking at last week’s conference to launch production and business plans and tasks for VNR in 2024, Prime Minister Pham Minh Chinh requested that it make a breakthrough in revenues and profit to accumulate resources for investment and exploitation of the high-speed railway project.

“VNR should not be satisfied with the normal growth rate, with changes revolving around renovating and renewing some stations and locomotives. The group should make efforts to turn the impossible into the possible. VNR needs to take advantage of its available resources, from railways to land banks, nearly 300 stations, 22,000 employees, and the world’s most beautiful railway landscape,” the prime minister said.

A north-south high-speed railway has been on paper for some time, identified as a backbone to connect urban railways, major economic centres, domestic transportation hubs, and international borders.

VNR and its member companies collectively recorded a successful business performance in 2023 after three consecutive years of mounting losses. It posted a consolidated revenue of about $347 million and an after-tax profit of $3.86 million, reaching 101.7 and 115 per cent of the year’s plan, respectively.

VNR itself witnessed improvement as it generated a revenue of $253 million, fulfilling 96 per cent of the target. Meanwhile, its after-tax profits reached $183,600, representing 150 per cent of the target.

Commending on the progress, the prime minister said, “Over the past time, we have seen positive changes with the corporation attaining new business leaders. However, while the railway sector has had more than 140 years of establishment, development is still not commensurate with the wishes of the people.”

VNR incurred huge losses during the 2020–2022 period. However, the corporation has taken drastic measures to restore business and production activities, thereby escaping losses in 2023. This was deemed a great achievement for VNR amidst the economic slowdown and shrinking demand for cargo transportation via railway.

Director Hoang Gia Khanh said, “2023 witnessed a change in the flow of freight transport due to high inventories among retailers, weak consumer demand, and fierce competition in freight rates between rail and ocean transportation, which led to a decrease in the market share for rail freight.”

To make a breakthrough, VNR will continue to maintain its growth trajectory in 2024. Accordingly, the parent company aims to achieve $236.5 million in revenue and nearly $204,000 in after-tax profit this year. Meanwhile, transport output will increase by about 7.3 per cent over the same period.

According to company leaders, to open up more business space for railway enterprises like VNR, state management agencies need to remove lingering problems related to the management mechanism, use and exploitation of national railway infrastructure, and preferential policies on land use for railways. Another bottleneck is linked to the issuance of land use rights certificates for railway land areas that do not have legal records.

To promote the development of the railway sector, PM Chinh requested relevant authorities to work closely with the sector to effectively carry out approved policies.

He stated that VNR should play a significant role in implementing the National Railway Transport Development Strategy with a view to delivering a secure and practical mode of transportation for individuals and companies. The corporation needs to complete its 2025 restructuring plan immediately in order to present it to the PM for approval.

The VNR oversees a vast railway system covering over 3,100km and five main routes, including two international inter-modal routes connecting with Chinese railways.