Hanoi, Sai Gon railway corporations merger proposal l Janaseva News


07-Aug-2021 Intellasia |
5:02 AM



The Committee for Administration of State Capital at Enterprises (CMSC) has proposed merging two member corporations of the Vietnam Railways Company (VNR) in an effort to slash prices and enhance effectivity because the business struggles with the impacts of COVID-19.

In line with the proposal which was not too long ago despatched to the prime minister, CMSC stated the 2 corporations ought to develop into one.

These two corporations had established their very own networks of personnel, working places of work and warehouses which largely pushed up prices and undermined their enterprise effectivity, CMSC stated.

As well as, having two separate railway corporations additionally resulted within the fragmentation of assets when it comes to coaches, warehouses, loading and unloading autos in addition to funding capital, CMSC identified, including that they didn’t share the accessible assets which additional lowered effectivity.

These current issues have been destroying the power and assets of each corporations and VNR itself. “The merger of the two member companies is urgent to improve the business efficiency of VNR,” CMSC stated.

CMSC additionally urged the restructuring of VNR to be sped up, in accordance with the plan authorized by the prime minister.

CMSC additionally pointed different issues within the organisation of VNR, which prompted a rise in administration prices and failure in utilizing accessible assets.

VNR at the moment has 5 small scale locomotive factories throughout the nation, in Yen Vien, Hanoi, Vinh, Da Nang and HCM Metropolis, which didn’t handle and function locomotive successfully.

CMSC proposed to scale back the variety of factories from 5 to 3, which might assist scale back prices by round VND63 billion per yr.

CMSC additionally proposed merging three railway administration boards into one which might assist save VND5.6 billion.

VNR earned a complete income of greater than VND2 trillion in 2016-19 interval, averaging VND7.2 trillion per yr, with a median annual after-tax revenue of VND114 billion and a contribution of VND3.6 trillion to the State price range. The typical earnings per employee was VND8.2 million per thirty days.

However it was hit laborious COVID-19 in 2020, seeing a drop of greater than 50 per cent within the variety of passengers in opposition to 2019 and incurring a lack of VND1.3 trillion.

The railway was dropping competitiveness in opposition to street and air transport because of stagnation in renovation.

Through the previous 17 years, VNR has been restructured 5 instances however continues to be to search out one of the best ways to function.

The proposal of merging Hanoi and Sai Gon railway transport corporations was first raised in 2018 however has but to be finalised.


Class: Enterprise, Vietnam

Supply article: https://www.intellasia.web/hanoi-sai-gon-railway-companies-merger-proposal-943651


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Teja Sirisipalli

#Hanoi #Sai #Gon #railway #corporations #merger #proposal

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