HÀ NỘI — The Việt Nam Railways (VNR) has submitted to the Ministry of Transport an investment plan with credit loans worth nearly VNĐ4.7 trillion (US$208 million) to purchase and build new locomotives and wagons from now till 2020.

The loans, proposed to be borrowed from the Việt Nam Development Bank (VDB), will be specifically invested in 100 new locomotives worth some VNĐ2.2 trillion, 150 passenger wagons worth VNĐ1.7 trillion, 300 container wagons worth VNĐ270 billion and another 500 wagons worth VNĐ550 billion, applicable for trains running at a speed below 60km per hour, according to VNR.

Of the total loans, nearly VNĐ1.4 trillion, or 30 per cent, will be from Hà Nội and Sài Gòn Railway Corporation and other joint stock companies, while the remaining VNĐ3.26 trillion, or 70 per cent, will be funded by the bank.

VNR wants to invest in new locomotives and wagons to gradually replace old locomotives and carriages by 2020, based on the recently-revised Railway Law that replaced the law of 2005, which includes regulations on the duration of use of locomotives and wagons.

Low capacity and outdated wagons and locomotives will be replaced by those that are produced in developed industrial countries using advanced technology. They would be used in the most efficient way, targeted at improving the competitiveness of railway transportation in Việt Nam and reducing costs.

The obstacle that is preventing VNR from accessing the capital is that the corporation’s projects are not among those that are allowed to get loans from VDB.

However, according to articles 5 and 6 of the amended Railway Law 2017, VNR should be allowed to loans with preferential interest rates from State credit sources or must be guaranteed by the Government to get loans. The regulations will come into effect on July 1, 2018.

To timely meet the demands of investment in infrastructure development and the development of the whole railway sector, VNR sent the proposal to the Ministry of Transport to seek approval of the Government.

In addition, VNR pledged to fully comply with loan procedures if it received green lights from the Government and promised to follow all the obligations to pay both interest and refund in accordance with the loan agreement. — VNS