VRC
derailed by low-cost airlines, modern highways?
After
two straight quarters of falling revenue the Vietnam Railway Corporation
(VRC) said recently it won’t be amping up hiring or revving up mothballed
locomotives anytime soon.
Tran Ngoc Thanh, chair of VRC, told
an audience gathered at a recent business forum in Ho Chi Minh City that the
railway’s revenue for the first half of 2016 dropped 22.50% on-year to
US$88.60 million (VND1.95 trillion).
Passenger
and cargo volumes have fallen for two straight quarters, he said, but he
didn’t offer any information on how the railway is continuing to pay ongoing
operating expenses with such a devastating loss of top-line revenue.
He
attempted to cast the blame for the lower revenue in part on the collapse of
the Ghenh Railway Bridge in Dong Nai Province, which, he alleged, had
resulted in lower transport of cargo and passengers in May and June.
Another
excuse he proffered was that the massive fish deaths in the four central
coastal provinces somehow negatively impacted the volume of freight and
passengers, but it was never clear to anyone exactly what point he was trying
to make.
One
seemingly logical explanation he offered for the decline was that the overall
improved highway transportation system has resulted in more travellers and
cargo being transported by vehicle.
He
specifically pointed to the opening of the Noi Bai-Lao Cai Highway last
September, noting that passenger and cargo transport by rail has steadily
declined since the ribbon cutting ceremony.
The
number of passengers on the Hanoi-Dong Dang railway line along with the
quantity of cargo and passengers on the Gia Lam-Nanning international train
have also plummeted due to the inconvenience travellers face passing through
the Vietnam-China border-gate, added Mr Thanh.
The
VRC has submitted a proposal to the Ministry of Culture, Sports and Tourism
to address the unfortunate situation, he said, that calls for streamlined
procedures making it more convenient for travellers.
Nguyen
The Vinh, deputy director of Saigontourist, in turn noted his belief that a
major contributing cause of the decline in rail passenger traffic is that
more tourists are now travelling by air and foregoing rail.
He
suggested that this is due to the fact that airlines are offering a bevy of
low cost air tickets this year.
The
price of an air ticket at one airline, he said, recently was US$26.72
(VND600,000) for a one-way ticket from Hanoi to Danang while the rail fare
was US$31.18 (VND700,000) per bed, one-way for a 4-bed cabin, with air
conditioning.
In
his opinion, he didn’t think that VRC could compete on price or quality of
service with the airlines at these rates and, as a result, it’s cutting
heavily into revenue and profits of the railway.
Dao
Anh Tuan, director of Saigon Railway Transport Joint Stock Company, added
credence to Mr Vinh’s claim saying the number of passengers booking tickets
on routes from Ho Chi Minh City to Danang, Hue, Dong Hoi and Vinh, was done
sharply this summer against last.
Nguyen
Hong Hai, deputy director of Saigon Railway Transport Joint Stock Company,
said all railway charges should be re-evaluated and lowered with the
overarching goal of boosting revenue.
In
particular, he said, discounts should be offered for large cargo shipments.
Obviously,
there is much more to this story say market analysts because if the revenue
drop was as significant as reported by Tran Ngoc Thanh, chair of VRC, roughly
US$26 million, then how is the railway paying its bills.
A
US$26-million-dollar loss of revenue would certainly derail most companies
and it just doesn’t pass the smell test that low cost airlines and modern
highways alone would have this significant an impact- without alarm bells
having rung long ago.
VOV
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Thứ Tư, 5 tháng 10, 2016
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