South Korean Dongrim Railway Transport Co Limited's $1 million newly launched tourist train, the Ha Long Express, which ran from Hanoi to Quang Ninh province's Ha Long City, stopped after just 20 days due to a dearth of passengers, high-priced services and a weak infrastructure. Operation of the six-compartment luxury train was in such a short duration from April 20 and May 10.

"This is a shock for the Korean company who has pinned great hopes on the modem train," said Dongrim Company vice director Nguyen Thai Hien.

The train's environmentally friendly equipment and technology were imported from South Korea.

Its interior was designed according to international standards, with each compartment being home to 62 soft seats, air conditioners and television sets. There is also a compartment offering entertainment facilities monitored by Korean managers. The Ha Long Express ran daily between Hanoi's Gia Lam railway station and the Ha Long railway station. Ticket prices were $5 for Vietnamese and $15 for foreigners.

"Within 20 days of operating the train, we earned only 2 million dong ($112.3) from selling tickets per day, while the daily costs for other services offered by Vietnam Railway Corp's Hanoi Railway Passenger Transport Co reached almost 35 million dong ($1,966.3). If other costs for employers' salary and maintaining the company's operation were included, we suffered from a total loss of 1.6 billion dong ($89,887)," Hien said.

He attributed the venture's failure on Vietnam's low-quality railway infrastructure and weak provision of supporting services. "The speed of the train between Hanoi and Ha Long is about 35 kilometres per hour, which is too slow," Hien said.

According to Vietnam's railway experts, Dongrim's failure was not attributed to the absence of tourists, but travellers were put off by the five-hour train journey, high prices and traffic from Ha Long railway station into the city.

Vietnam Investment Review - July 7, 2009