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In the first half of 2016, member companies transported a combined 2.6 million tonnes of cargo and 5.13 million people, a respective fall-back of 24.7 and 11.9 per cent on-year.
The company leadership blamed the collapse of Ghenh bridge right before the busy holiday of April 30, which marks the start of the summer tourism season. The bridge collapse interrupted the busiest North-South route. They estimated that in June VNR lost VND10 billion ($448 million) a day due to the collapse.
Another reason is that the massive wave of fish death off the coast of Central Vietnam brought down tourism demand, as tourists no longer want to travel to destinations in the area.
Phung Thi Ly Ha, deputy general director of VNR, said that rail companies got the short end of the stick in the competition with low-cost airlines. “Tickets for a Hanoi-Danang flight cost VND600,000 ($27) on average, while train tickets cost VND700,000 ($31.4) for a bed in a four-bed air-conditioned room. And we cannot decrease our price, otherwise we would be losing money,” she said.
The speed of train transportation in Vietnam is slow because the infrastructure is old. Many bridges used by trains are a hundred years old or more. When on these rickety bridges, trains can only travel at about 20 kilometres per hour. From now to 2020 there is no plan to upgrade any part of the infrastructure.
In 2015, VNR reported a profit of VND65 billion ($3 million) out of a revenue of VND11.6 trillion ($520 million). VNR is in the process of selling the state stake it represents in many subsidiaries, which operate in diverse fields, including real estate, printing, and construction.
