Vietnam Railways begs for VND 471 billion handout

The Vietnam Railways Corporation has asked the prime minister to let the Ministry of Transport give them VND471 billion (USD21 million) to pay outstanding salaries to staff, and payments to suppliers and contractors.

Vietnam Railways begs for VND471bn handout

According to Vietnam Railways, those are constructions were built under emergency orders by the government. However, they have incurred a debt of over VND471bn to contractors since 2013. Each year, they incurred additional VND45bn (USD2m) of debts to employees, material suppliers and the banks.

"The contractors have had many difficulties in the past years and may have to shut down their accounts or operations," Vietnam Railways wrote in the report.

In addition, many contractors under Vietnam Railways are undergoing equitisation, making it even more difficult to review their debts and any potential pidends. Vietnam Railways said they were unable to recover tens of billions of VND in pidends or debt payments.

According to Vietnam Railways, the revenues from railway transportation in the first six months of 2016 dropped to VND3.12trn (USD139.81m). It is said that they lost a lot of passengers as the mass fish deaths had badly affected tourism in four central provinces. Price competition with airlines and the collapse of Ghenh Bridge, a key bridge on the North-South railway line, had also contributed to the losses.

In early September, the Government Inspectorate announced various wrongdoings at Vietnam Railways during the 2010-2013 period. It spent large amounts of public money on impractical projects and violated property management accounting rules on numerous occasions.

Vietnam Railways spent VND14bn (USD627,000) on 188 overseas business trips or studying trips. However, 23 trips are not planned or have invitation letters from their partners. Five overseas trips in 2012 and 2013, worth over VND1.7bn were carried out by local tourism companies.

The report claims that Vietnam Railways had done ineffective business despite its huge infrastructure, racked up losses and disregarded the country's interests. It overspent VND29bn (USD1.3m) for three equipment purchase projects which had a total value of VND408bn./.

( VNF/Dantri )