Hanoi Metro makes huge losses despite new urban railway line
The Hanoi Metro Company reported a loss of US$2.75 million in 2021 after its Cat Linh- Ha Dong Urban Railway began operating from November 6 last year.
The Hanoi Metro Company reported a loss of US$2.75 million in 2021 after its Cat Linh- Ha Dong Urban Railway began operating from November 6 last year.
According to an audited financial report, the company only earned $229,000 in revenue from selling tickets, while the cost of labour and services came in at $2.54 million.
One of the reasons for this loss is that the project has yet to receive subsidies for its operation.
Vu Hong Truong, general director of the company, told Zing online that the nature of "revenue does not guarantee operating costs", and an urban railway should be subsidised by the authorities like public buses.
He added that the revenue of urban railways failing to cover operating costs was common worldwide.
He said that even on record-busy days like April 30 and May 1, with the number of passengers up to 53,000 visitors daily, revenue from selling the tickets was still not enough to cover operating costs.
The company is completing procedures to receive subsidies from the authorities as per regulations, he said.
After receiving subsidies, the company's financial situation will be different because the subsidies will not just make up for the shortfall, but also ensure the company makes a profit, he said.
Nguyen Anh Tuan, a lecturer from the University of Transport, said the metro was a form of "symbiotic" transport, so a single-line metro would struggle to attract passengers.
The delay in constructing and operating other metro lines in the city may also be contributing to losses, he added.
The company has set its revenue target for this year at $20.5 million, nearly 90 times higher than last year, and a pre-tax profit target of more than $734,000.
The company also plans to operate an elevated section of the Nhon - Hanoi Railway Station line, serving more than 7.9 million passengers this year.
After 202 days of operation, from November 6, 2021, to May 26, the Cat Linh – Ha Dong urban railway carried more than 3.1 million passengers or an average of 15,633 passengers per day.
Vietnam News
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