Illustration by Đàm Minh Chí

By Nguyễn Hằng

The Việt Nam Railways Corporation (VNR) is set to submit an ambitious plan to the Government regarding railway infrastructure exploitation.

The corporation's plan involves building commercial centres at each station to serve passengers.

Under the plan, the project will start with stations in major cities including Hà Nội, HCMC and Đà Nẵng.

The move comes after the corporation reported that most of its 297 stations across the country are old and small, and that the sector is inferior to both air and road transport services.

According to the corporation, if it does not develop its stations now, the national railway sector will further decline.

Many experts say the project could provide the opportunity for the sector to develop. However, they've also advised agencies to carefully consider the plan before giving it the green light.

Cao Sỹ Kiêm, former Governor of the State Bank of Việt Nam, said that with the right development strategy and effective exploitation, stations with commercial centres could become a driving force for the development of the national railway sector and the economy.

Nevertheless, Kiêm said looking at the development of the national railway sector in recent decades, there were two major issues - lack of capital and outdated technology.

If the railway sector wants to rebuild, it needs effective management, good staff, updated technology, and last but not least, a policy to attract investment.

“The answer for the national railway sector’s development is not as simple as building commercial centres inside the stations and expecting them to provide economic efficiency,” Kiêm said.

Đặng Đình Đào, former Director of the Institute of Economic Research and Development under the Hà Nội-based National Economic University, said the development of the national railway sector demanded a long-term strategy.

“It cannot rely on turning railway stations into commercial centres,” he added.

The root cause of the sector’s stagnation was degraded infrastructure, outdated technology and poor service quality, he said.

What it really needs would be a “comprehensive revolution” to pull the sector out of it current backwardness and stagnation, he said.

“The railway sector, like any transport sector that wants to survive and grow, must attract passengers. If you want to attract passengers, you must improve service quality rather than just upgrading a station with a commercial centre,” he said.

“Who are they going to serve if there are no passengers?” he added.

Lê Cao Đoàn from the Việt Nam Institute of Economics said the project should be carefully chewed over in terms of legal and economic efficiency.

Commercial centres would take funding from the sector’s land fund, so we need to clarify how the sector would use that money, he said.

Trần Thọ Đạt, a member of the Prime Minister’s economic consulting team, said if the sector piloted the scheme in major stations, it should invite long-term investments to maintain the beauty and architecture of old stations.

In 1881, when the French occupied Sài Gòn during the first Indochina War, they built the first railway in Việt Nam. It was also one of the first in the region and the most modern in Southeast Asia. Almost 140 years later, the tracks are still in use even though they are outdated.

Việt Nam’s railway network is roughly 4,100km long. About 85 per cent of rail transportation runs on the 1,726km North-South Railway between Hà Nội and HCM City. All Vietnamese trains run on diesel.

For more than 100 years, the country has been using the metre-wide narrow gauge track, while the current standard worldwide is 1.435 metres.

Data from the corporation revealed that in 1986, the railway sector accounted for 30 per cent of the country's transport sector. That figure has since fallen to only 1.9 per cent.

If the railway sector wants to survive, it has to upgrade infrastructure, update technology and improve service quality to attract passengers rather than only focusing on building commercial centres in stations. The Government and relevant agencies should take careful consideration and consult more experts before approving the project. — VNS