Vietnam’s first foreign-invested train service comes off the rails

South Korean Dongrim Railway Transport Company’s $1 million tourist train, which ran from Hanoi to the northern Quang Ninh province’s Halong city, has stayed dormant for more than one year in Hanoi’s Gia Lam train station, after 20 days since launching on April 20, 2009.

“This is a shock for the Korean company who has pinned great hopes on the modern train,” said Nguyen Thai Hien, who was once an executive of Dongrim’s project.

The six-compartment luxury train, the Halong Express Train, had wrestled with a serious dearth of passengers. Within 20 days of operating, the train earned only around $105 from selling tickets per day while the daily costs for services that Dongrim paid to Hanoi Railway Passenger Transport Company reached nearly $1,900, Hien told VIR Online.

If other costs like employees’ salaries and maintenance were included, he said, Dongrim suffered from a total loss of VND1.6 billion dong ($84,210) during the 20 operation days.

Le Hai Long, who was in charge of ticket sales for Dongrim, said the number of passengers continued to slide except for the first days.

“The train has the capacity of 300 passengers. However, for many days it only had about 10 passengers per trip,” he said.

A representative of Gia Lam Train Factory confirmed with VIR Online that Dongrim still owed $1.69 million for the former’s services to the latter including costs to renovate the compartments imported from South Korea.

Vietnam’s railway experts attributed the venture’s failure to its lack of feasibility.

An executive of Hanoi Railway Tourist Service Joint Stock Company (Haratour), which is a booking agent of Halong railway station, said the route was difficult for tourists and it was quicker to go by car.

Due to the poor quality of railway infrastructure, the speed of Dongrim’s train between Hanoi and Halong was about 35 kilometres per hour. It meant it took up to five hours to make the journey.

“Visitors have many choices for this route with less time and money,” said a Haratour executive.

Each compartment of Dongrim was home to 62 soft seats, air conditioners and television sets. There was also a compartment offering entertainment facilities monitored by Korean managers. Dongrim’s ticket prices were $5 for Vietnamese, about 20-30 per cent higher than going by passenger cars, and $15 for foreigners.