Vietnam’s first metro line starts running at a loss
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The Hanoi Metro Line 2A leads from Cat Linh to Ha Dong Vietnam’s first-ever finished metro line, the Hanoi Metro Line 2A, also known as Cat Linh-Ha Dong metro line, has been off to a soft start, at least when it comes to profitability and passenger acceptance.
Hanoi Metro Company, which operates the elevated mass transit railway which began operations on November 6, 2021, has run up a loss of 64 billion dong ($2.75 million) in less than two months last year.
Revenue stood at just five billion dong versus operating costs of nearly 60 billion dong in the period as adoption by the public was slow and the number of passengers remained below expectations. High labour costs were adding to the problem, VN Express reported. In addition, during the first 15 days the rides were offered for free as an incentive.
Ticket subsidies in preparation
A company representative said the fourth Covid-19 outbreak that hit Vietnam beginning from April 2021 required strict social distancing measures and thus had negatively affected the whole country’s economy including the transportation business. The metro route is not yet subsidised by the city, the representative said, resulting in relatively higher ticket prices which seems to be discouraging people to use the line.
Meanwhile, the Hanoi People’s Council has passed a resolution to spend 14.5 billion dong (around $624,000) per year in subsidies for fares on the metro line which should cover 2022 and beyond.
The metro line runs 13 kilometers from downtown Cat Linh to the southwestern district of Ha Dong, with a trip taking around 23 minutes. Currently, single tickets costs between 8,000 and 15,000 dong ($0.35 to $0.66), depending on the distance. A day pass costs 30,000 dong, while a monthly pass can be had for 200,000 dong.
In comparison, tickets on the extensive city bus network in Hanoi start at 7,000 dong, while a motorbike taxi ride for an average distance usually costs about 10,000 dong.
Next line to open at the end of 2022 at the earliest
In the first six months of operation, the Hanoi Metro Line 2A line has transported 3.16 million passengers, its operator said.
It is one of ten lines planned for Hanoi by 2030 with a total network length of 417 kilometers. The next line to be opened is Line 3, also called Van Mieu Line, leading from the western suburb of Nonh to Hanoi railway station in the city center. Currently under construction, it is expected to commence operations at the end of 2022 or in early 2023.
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[caption id="attachment_38552" align="alignleft" width="300"] The Hanoi Metro Line 2A leads from Cat Linh to Ha Dong[/caption] Vietnam’s first-ever finished metro line, the Hanoi Metro Line 2A, also known as Cat Linh-Ha Dong metro line, has been off to a soft start, at least when it comes to profitability and passenger acceptance. Hanoi Metro Company, which operates the elevated mass transit railway which began operations on November 6, 2021, has run up a loss of 64 billion dong ($2.75 million) in less than two months last year. Revenue stood at just five billion dong versus operating costs of nearly 60 billion...
The Hanoi Metro Line 2A leads from Cat Linh to Ha Dong
Vietnam’s first-ever finished metro line, the Hanoi Metro Line 2A, also known as Cat Linh-Ha Dong metro line, has been off to a soft start, at least when it comes to profitability and passenger acceptance.
Hanoi Metro Company, which operates the elevated mass transit railway which began operations on November 6, 2021, has run up a loss of 64 billion dong ($2.75 million) in less than two months last year.
Revenue stood at just five billion dong versus operating costs of nearly 60 billion dong in the period as adoption by the public was slow and the number of passengers remained below expectations. High labour costs were adding to the problem, VN Express reported. In addition, during the first 15 days the rides were offered for free as an incentive.
Ticket subsidies in preparation
A company representative said the fourth Covid-19 outbreak that hit Vietnam beginning from April 2021 required strict social distancing measures and thus had negatively affected the whole country’s economy including the transportation business. The metro route is not yet subsidised by the city, the representative said, resulting in relatively higher ticket prices which seems to be discouraging people to use the line.
Meanwhile, the Hanoi People’s Council has passed a resolution to spend 14.5 billion dong (around $624,000) per year in subsidies for fares on the metro line which should cover 2022 and beyond.
The metro line runs 13 kilometers from downtown Cat Linh to the southwestern district of Ha Dong, with a trip taking around 23 minutes. Currently, single tickets costs between 8,000 and 15,000 dong ($0.35 to $0.66), depending on the distance. A day pass costs 30,000 dong, while a monthly pass can be had for 200,000 dong.
In comparison, tickets on the extensive city bus network in Hanoi start at 7,000 dong, while a motorbike taxi ride for an average distance usually costs about 10,000 dong.
Next line to open at the end of 2022 at the earliest
In the first six months of operation, the Hanoi Metro Line 2A line has transported 3.16 million passengers, its operator said.
It is one of ten lines planned for Hanoi by 2030 with a total network length of 417 kilometers. The next line to be opened is Line 3, also called Van Mieu Line, leading from the western suburb of Nonh to Hanoi railway station in the city center. Currently under construction, it is expected to commence operations at the end of 2022 or in early 2023.
Support ASEAN news
Investvine has been a consistent voice in ASEAN news for more than a decade. From breaking news to exclusive interviews with key ASEAN leaders, we have brought you factual and engaging reports – the stories that matter, free of charge.
Like many news organisations, we are striving to survive in an age of reduced advertising and biased journalism. Our mission is to rise above today’s challenges and chart tomorrow’s world with clear, dependable reporting.
Support us now with a donation of your choosing. Your contribution will help us shine a light on important ASEAN stories, reach more people and lift the manifold voices of this dynamic, influential region.
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Originally posted on: https://investvine.com/vietnams-first-metro-line-starts-running-at-a-loss/