HCMC – Hanoi and Saigon Railway JSCs, the subsidiaries of the Vietnam Railway Corporation (VNR), will be merged, according to VNR’s restructuring plan approved by Deputy Prime Minister Le Minh Khai on April 8.
VNR has 35 subsidiaries and affiliates operating in the railway infrastructure management, operation and repair; rail passenger transport; and locomotive and carriage manufacturing sectors, the local media reported.
Besides the merger of the two above companies, the number of locomotive manufacturing factories will be cut from five to three.
In addition, three railway project management boards will be merged to represent VNR to manage railway projects more effectively.
Deputy PM Khai said losses could be reduced during the VNR’s restructuring. The Commission for the Management of State Capital at Enterprises was assigned to direct VNR to complete the restructuring plan in the 2021-2025 period and submit it to the prime minister for approval.
VNR’s performance was hit heavily by Covid-19. Its consolidated revenue reached some VND6.7 trillion but its after-tax loss was VND677 billion.
The parent company’s revenue totaled over VND1.4 trillion in 2021, meeting 90% of the target, while its pre-tax loss was VND691 billion.
Hanoi and Saigon Railway JSCs also recorded losses over the past two years. Hanoi Railway JSC incurred losses of VND196 billion in 2020 and VND122 billion in 2021.
Saigon Railway JSC incurred a loss of nearly VND139 billion in 2021. Its net revenue reached around VND893.6 billion, down VND358 billion over 2020.
This year, VNR will focus on the cargo transport. The parent company’s pre-tax profit was expected to be VND580 billion and its loss will be reduced by over VND100 billion.