The railway sector is to receive substantial infrastructure development and change its business model.  — Photo vietnamplus.vn

HÀ NỘI — The merger of Hà Nội Railway Transport JSC and Sài Gòn Railway Transport JSC, into the Railway Transport JSC, is expected to be completed by the end of this year, Việt Nam Railway Corporation (VNR)’s General Director Hoàng Gia Khánh said.

This consolidation is mandated by the VNR restructuring plan approved by the Prime Minister in June. The State Securities Commission of Việt Nam is currently reviewing the merger, (in Decision No 562/QĐ-TTg), with public offering approval anticipated in the fourth quarter of this year, Khánh told VietnamPlus.

Khánh emphasised that this merger is essential for improving the performance of the railway system and leveraging available resources. He said that effectively using allocated resources is crucial, as the management plan for State-owned railway infrastructure directly impacts VNR’s production and business activities.

To enhance productivity, VNR requires ownership and authority over its assets to develop the national railway infrastructure, ensuring it meets passenger and cargo demands, while improving services and increasing transport capacity through key border gates like Đồng Đăng and Lào Cai. This development is expected to create jobs, boost incomes, increase revenue and safeguard asset values.

Additionally, under the amended Government Decree 46, private investment attraction for over 300 train stations under VNR’s management must comply with legal requirements. The corporation is required to develop investment plans and seek approval before implementation to align resources with national objectives.

VNR has been allocated nearly VNĐ4 trillion (US$162.7 million) annually for maintenance, covering approximately 50 per cent of the necessary funding. The corporation is proactively reviewing and proposing repair and upgrade plans for railway infrastructure to ensure operational safety.

As the Railway Transport JSC takes shape, VNR plans to reduce its stake in the firm to attract investment aimed at enhancing the quality of rail services. This strategy will be outlined in the restructuring plan for the coming year and reported to the Prime Minister by the Commission for the Management of State Capital at Enterprises (CMSC).

After one to two years of operation, VNR will evaluate its stake in the new company, with a focus on professionalising cargo and passenger transportation services as part of its 2030 restructuring plan, Khánh added. — VNS