A total 2,886 train routes were suspended from February to May this year, owing to Covid-19 impacts, according to Vietnam Railways Corporation (VNR). Total passenger numbers were also sparse for the first six months, filling only 56 percent of total train capacity.
The railway industry continued to suffer as a result of the second Covid-19 outbreak in July. The Hanoi-Ho Chi Minh City route saw a reduction of 10 trains per day to a mere four.
The Vietnam Railway Corporation reported a 54 percent fall year-on-year in the number of passengers in the first nine months of the year to three million.
It has temporarily laid off over 1,200 workers and reduced the working hours of 400 others since it has curtailed most of its operations since the second quarter due to lack of demand.
VNR said the fallout of the Covid-19 pandemic also meant it made a loss of VND428 billion ($18.5 million) in the period.
Recent flooding in central Vietnam, which caused two serious rail congestion incidents, led to goods and passenger transportation damage totaling VND26.9 billion, excluding infrastructure. For 2020, the firm projected a loss of over VND1.2 trillion.
Alongside more recent problems are long-term challenges that hinder the development of the railway industry, including poor infrastructure and obsolete technologies.
Vu Anh Minh, chairman of VNR, said the challenge lies in Vietnam’s meter gauge, single-tracked railways that limit interval capacity. This problem remains unsolved in the absence of a government renovation policy.
The railway sector has only received 40 percent of state capital earmarked for its business and production activities, and among other things, this has undermined railway traffic safety, Minh added.
Because railway infrastructure and stations belong to the state, VNR cannot use its own money to conduct repairs, he noted.
Vietnam has over 3,000 km of track, none of it high speed. Last year, trains carried eight million passengers, down 6.9 percent year-on-year.