|Construction of the new Ninh Binh Station in northern Ninh Binh Province crossing Day River. Improving the nation's railway system would require huge investments, according to deputy PM Vu Van Ninh. — VNA/VNS Photo The Duyet
HA NOI (VNS)— Deputy Prime Minister Vu Van Ninh has asked the State-owned Viet Nam Railway Corporation, the country's largest railway operator, to improve its railway infrastructure and operations and improve management of State funds.
Speaking on Thursday at a meeting on the company's restructuring plan, Ninh asked the corporation to identify key investment areas and offer incentives to attract private investors to contribute to infrastructure development.
According to the Ministry of Planning and Investment, rail transport possesses unique advantages in carrying goods compared with other means of transport, in addition to easing congestion on roads.
"If trillions of Vietnamese dong are invested in building roads only, they would be degraded in five or seven years because of overloading. However develping railways will help prevent money being wasted on constantly fixing roads or building new ones," said deputy minister Dang Huy Dong.
Deputy Transport Minister Nguyen Ngoc Dong said that it was necessary to develop railways because of the leading role it played in transporting goods.
Viet Nam's railway sector saw a yearly increase of 11-15 per cent in the amount of goods transported. Conversely, market share of train freight fell from 2.56 per cent to 0.8 per cent during the past ten years.
Improving the nation's railway system would require huge investments at a time when the country is tightening spending and imposing strict limitations on State funds. It is estimated that each kilometre of railway would cost more than US$20 million, said deputy PM Ninh.
"So, the sector has to determine its development strategy carefully to step by step modernise it," he said.
The corporation has made plans to wind down State contributions at 13 of its subsidiaries, in addition to selling its stake in 13 joint stock companies in the next quarter. The move is expected to help the entity focus on core activities.
Under its restructuring plan during 2013-15, approved by the Prime Minister last year, the corporation also developed a human resource plan and established a steering committee to oversee the restructuring process.
The corporation intends to cater to at least 1-2 per cent of the country's passengers and 3-4 per cent of the goods transport market by 2020. — VNS