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Railway station runs up huge losses

Tuesday, May 6, 2014
Dong Dang Railway Station in northern Lang Son Province, one of the key transit points for passengers and cargo between Viet Nam and China, is losing billions of dong each year because of lack of maintenance and competition from road transport, senior officials have said.

All storage buildings are derelict and are often full of mud and stagnant water. A 100-metre long road that connects the station warehouse and Dong Dang Village is full of ruts and holes, making it difficult for trucks to move in and out.

Dong Dang Railway Station in northern Lang Son Province

The station's management board has repaired the road several times, but the situation quickly deteriorates.

Nguyen Van Dat, from Lang Son Agricultural Materials Company, said his company preferred rail transport instead of road freight because it was much cheaper. However, the process of loading and unloading cargo at Dong Dang station was slow.

Hoang Van Soi, representative of the Lang Son Railway Transport Service Company said that many businesses switched back to rail transport as road transport costs had grown three times in recent years. But they usually had to be very patient about the time it took.

Figures from the station's management board show that the station can only meet 70 per cent of the demand for cargo transport. Last year, total turnover at the station was estimated to be only VND31 billion (US$1.4 million).

On average, the station now reports an annual loss of VND9 billion ($428,500) due to its inefficiency in transferring cargo.

Vu Kim Ngan, head of the station's management board, said she had to refuse many contracts as the station could barely meet present demand.

The problem was made worse by failure to upgrade the station and provide proper maintenance after nearly 20 years of use, she added.

Recently, road transport cost rose two or three fold after the Ministry of Transport began tightening its inspection of cargo trucks on the nation's highways.

Many enterprises would prefer to switch to rail and even water transport, however, they offer little viable competition to land transport.
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