Vietnam Railways announced to stop operation on five rail lines in the northern and central region from January 1, 2014 due to their loss-making business.
Vietnam Railways to stop operation of five rail lines from 2014
The corporation said these trains have been making an average loss of up to VND90 billion (USD4.3 million) per year. They are among 180 pairs of trains being operated by Vietnam Railways.
The trains to be decommissioned operate in the the five routes of Vinh-Dong Hoi, Dong Hoi-Hue, Gia Lam-Dong Dang, Yen Vien-Ha Long and Long Bien-Quan Trieu.
In 2012, the Yen Vien-Ha Long train route suffered from a loss of VND23.5 billion (USD1.1 million), and the Vinh-Dong Hoi route saw losses of VND22.6 billion.
The 106-km Yen Vien-Ha Long route’s revenues reached less than VND4 million (USD190.4) per day, accounting for only 5% of its daily expenses. Meanwhile, the revenues from the Dong Hoi-Hue route were VND14 million per day, equal to 22-28% of their daily expenses.
An official from Vietnam Railways said that these trains were all meant for short transport, but have to cover high costs for the operational expenses. At the same time they faced fierce competition from other means of transport. These trains mainly served passengers who did not want to go by another form of transportation for one reason or another. Many passengers only take the trains to go for around 10km and then pay the fees of VND10,000 (USD0.5).
Earlier, Vietnam Railways carried out measures to improve their operations, but the situation has not become better.
