The continuing pandemic might mean another difficult year for the railways sector. VNA/VNS Photo

HCM CITY — The Vietnam Railways Corporation has lost VNĐ1.32 trillion (US$57.4 million) in revenues due to the COVID-19 pandemic and flooding in the central region.

Speaking at a conference held to discuss the railways’ plans for this year last week, its chairman, Vũ Anh Minh, said revenues last year were down 21.7 per cent to VNĐ6.56 trillion ($284.5 million).

The continuing pandemic threatened another difficult year for the railways, he said.

It also faced severe competition from low-cost airlines, he said.

Work to upgrade the Hà Nội- HCM City route at a cost of VNĐ7trillion ($303.6 million) reduced its capacity by 25-30 per cent 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.

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 VNĐ3.25 trillion ($140.9 million) for its two subsidiaries, Hà Nội Railway Transport and Sài Gòn 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 Nguyễn Ngọc Đông admitted that the railway sector experienced a tough 2020.

Over the past decade, the sector failed to mobilise resources for its development. Meanwhile, the investment in the sector had increased slightly by VNĐ4-4.5 trillion, mainly for infrastructure maintenance and social welfare and not for development.

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