The corporation is expected to buy 100 new locomotives, 150 passenger coaches, 300 container coaches and 500 coaches having the speed of less than 60 kilometers an hour to gradually replace old and downgraded coaches from now until 2020.
Of the total funds, nearly VND1,398 billion accounting for 30 percent will be reciprocal capital from Vietnam Railways, Saigon and Hanoi Railway Transport Companies. The remaining amount accounting for 70 percent will be bank loans.
The investment aims at raising the competitive ability of railway compared to other types of transport.
Vietnam Railways says that the project is not subject to borrowers of VDB.
According to Articles 5 and 6 of the revised Railway Law 2017, the corporation can get preferential credit source of the state or receive Government’s loan guarantee for the project. However, the law will take effect on July 1, 2018.
Therefore, Vietnam Railways has proposed the Ministry of Transport to report to the Government, permitting the railway industry’s investment projects to get loans from VDB so that they will be invested in a timely manner.