Vietnam Progressing But More Needs to be Done
 in Terms of Port Expansion

Ho Chi Minh City’s ports currently handle well over 50 million tones of goods a year according to a recent article in the Monday, November 3, 2008 issue of the Vietnam News.  This is considerably above government projections just a few years ago when the government had projected tonnage rising to 26 million tones in 2010 and 35 million tones in 2020.  This is all good news for Vietnam as it shows that economic growth has as all observers agree, been faster than projected.

According to Ho Kim Lan, general secretary of the Vietnam Ports Association in the same article in Vietnam News, growth in container cargo is currently 3.4 million TEU (twenty-foot equivalent units) a year now and was growing at a 25 percent a year figure.

City Authorities in Ho Chi Minh City plan to revise the goods-handling target to 100 million tones per year by 2010 and 200 million tones by 2020 because of the speedy growth demonstrated above.  In order to accomplish this, the authorities are currently in the midst of a plan to move the 11 city ports along the Saigon River to the suburbs, with five of them to be relocated by 2010.

The problem here however is that so far only New Port has been moved to Cat Lai Port in District 2 of the city.  The other four ports, Ba Son Shipyard, Saigon, Tan Thuan Dong and Rau Qua ports are still in the process of land acquisition and other preliminary work.  The shifting of the ports is already behind schedule and will not meet the deadlines set. 

The reasons for the delay are many but much of the work relates to the failure of the port operators to find investors or foreign partners for the new ports.  This problem will become even more difficult as the world financial crisis slows down projects and limits the tolerance for risk.

Poor infrastructure at the new sites – including roads, water, power, waterways and communications – are also deterring investors.  For example, IPC general Director Phan Hong Quan said in a November 3 article of the Vietnam News that the under-construction Sai Gon Port Container Terminal in Nha Be District’s Hiep Phuoc area, which was expected to be completed in 2009 with an annual capacity of 1.5 million TEU, has no access to roads.  All of the roads leading to the project are only half-complete.

So far, New Port is taking up the slack for the still uncompleted ports but the stresses are showing.  Port operators say that port delays are being limited but that the system is being taxed to the maximum.  Because of this, the government needs to give increased attention and resources to this current issue to help Vietnam continue to attract and support investor projects.



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