The truth about the nearly 100 billion VND profit on the Cat Linh line.

On the morning of June 8th, during the National Assembly's question-and-answer session, Minister of Transport Nguyen Van Thang emphasized that public transportation is essential for large cities like Hanoi and Ho Chi Minh City.

The Minister shared his surprise that after 19 months of operation, the Cat Linh - Ha Dong urban railway has seen 31,000-33,000 passengers daily, with peak periods reaching 55,000. Trains run every 6 minutes, and for the first time, it reported a profit of nearly 100 billion VND.

Earlier, in mid-May, the audited financial report for 2022 of Hanoi Metro Company Limited (the operator of the Cat Linh-Ha Dong urban railway line) announced that the company's business results reached a total revenue of 483 billion VND from sales and services, a seven-fold increase compared to 2021.

For the whole year of 2022, Hanoi Metro recorded subsidy revenue of 417 billion VND, a 6.6-fold increase compared to 2021. This revenue helped Hanoi Metro escape its loss-making situation and achieve a gross profit of 109.5 billion VND. Previously, in 2021, when the line had just started operating, the company incurred a loss of 64 billion VND.

Currently, Hanoi Metro's cost structure includes: operating depreciation accounting for 60%, equivalent to VND 225 billion; labor costs at VND 99.4 billion (almost double last year); and outsourced service costs at nearly VND 60 billion (up 3.7 times)... After deducting all expenses, the company's pre-tax profit is VND 96.8 billion.

The Cat Linh-Ha Dong railway line attracts many users (Photo: Dinh Hieu)

On June 12th, in an interview with VietNamNet reporters regarding the nearly 100 billion VND profit that even surprised the Minister of Transport, Mr. Vu Hong Truong, General Director of Hanoi Railway Company Limited, affirmed that the difference between revenue and expenditure in the company's financial report, exceeding 96 billion VND, does not yet constitute profit. However, according to financial regulations, if revenue and expenditure are positive, it is considered profit.

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Explaining the discrepancy of over 96 billion VND, Mr. Truong pointed out the following reasons:

Firstly, the city's standards and unit prices for placing orders are based on averages for the entire process.

"However, during the first two years, the trains, equipment, and infrastructure were new, so the incurred costs were not significant. In particular, many expensive spare parts and repair materials were covered by the warranty service," Mr. Truong said.

Secondly, after the warranty period expires, these costs will arise and gradually increase. Therefore, according to Hanoi Metro's 2023 financial plan, the projected profit will be even lower than the standard profit margin in the City's order price.

"Currently, the company has submitted a report to relevant agencies on the plan to handle the revenue and expenditure difference of 96 billion VND in 2022, based on a reasonable balance of resources to ensure the continued operation of the route, and to protect the rights of passengers and employees in accordance with regulations," Mr. Truong said.

The General Director of Hanoi Metro also emphasized that investing in the development of public passenger transport in general and urban rail in particular is a public investment not aimed at profit.

Accordingly, developing public passenger transport brings significant social and environmental benefits such as reducing traffic congestion, environmental pollution, and the risk of traffic accidents.

According to calculations, for every 1 million trips switched from using private vehicles to using urban rail, 487,000 hours of commuting time will be saved, resulting in economic benefits exceeding 30 billion VND. Furthermore, this will also reduce approximately 100 tons of CO, HC, and NOx emissions.

Transported over 13.7 million passengers.

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Nearly 3.4 million passengers used the Nhon metro.

On November 6, 2021, the Cat Linh – Ha Dong urban railway line 2A, the first urban railway line in Hanoi and also in the whole country, was officially put into operation.

As of June 11, 2023, the route had operated safely for 583 days, transporting over 13.7 million passengers.

(Source: Vietnamnet)

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Source: https://vtc.vn/su-that-khoan-lai-gan-100-ty-tuyen-cat-linh-ha-dong-ar799258.html