In order to make its operation more profitable and competitive, the Vietnam Railways Corporation (VNR) is trying to restructure itself, including weaning itself from government subsidy, according to Nguyen Ngoc Dong, Vietnamese deputy minister of transport.

After a review of VNR's operations for the first half of 2014, Dong has said that the sector is facing two major challenges: one is its poor competitiveness compared to other means of transportation; and the second is poor management in both the corporation and its affiliates.

Aside from poor management, the VNR's accounting system has been found to be defected and needs a total overhaul. In fact, the Ministry of Transport has just implemented a comprehensive inspection of the VNR and its affiliates, according to Bao Dau Tu (Vietnam Investment Review), an online newspaper of Vietnam's Ministry of Planning and Investment.

Bao Dau Tu reported that the VNR has failed to issue a report about its operation before and after taxes paid to the government. The newspaper said that subsidized thinking has prevailed in the minds of the top echelons of the railway company.

Passenger and cargoes moved through trains currently account for a very low 0.4 percent to 0.7 percent of the national total of transport services.

Earlier in March, a bribery allegation was also revealed in Vietnamese railway sector after a foreign media reported that a Japanese company bribed several Vietnamese railway officials in order to win a bid for one of the railway projects.

So far, six Vietnamese railway officials have been investigated for their alleged involvement in the anomaly.

In April, Vietnamese Minister of Transport Dinh La Thang urged a total overhaul of the railway sector.

Following Thang's directive, in early June, the VNR replaced officials holding key positions in the corporation such as the general director and chief accountant, and 20 other top posts.

"A qualitative change should be made in VNR and this includes relaxing state management function and increasing business competitiveness," said Dong.

Although the restructuring process of VNR is still at its initial stage, customers have already felt some improvements in VNR services in the past six months.

Pham Anh Minh, who commutes by train, said that during the last six months, he felt some improvement in the railway services. "The railway staff is more courteous now and the train stations are cleaner and with more amenities," he said.

Minh said that in terms of fare, safety, convenience and comfort, the railway service is still okay as compared with other means of transportation, but added that the company can still improve its services.

The VNR has started to modernize its operation by introducing online booking and online journey tracking, among others.