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Work begins at last on huge Central VN container port project

Date: 10/22/2009 4:18:19 PM

As Vinalines and a Korean partner begin construction of wharves able to serve vessels carrying up to 11,000 standard shipping containers, commentators point out that important obstacles must still be overcome.

Work begins at last on huge Central VN container port project.

Until now, Van Phong Bay in Khanh Hoa province has been best known for some excellent scuba diving sites. On October 31, however, work will begin on the first port in Vietnam designed specifically to serve as a container transshipping point, said by TT newspaper.

Former Khanh Hoa People’s Committee (PPC) Chairman Pham Van Chi is paticularly pleased to see the project, ten years on the planning boards, moving forward at last. “We have been too slow [with the port project]. We must go faster, so we don’t miss our opportunities”.

The General Director of the Vietnam National Shipping Lines (Vinalines), Duong Chi Dung, said that the container port will be developed in three stages. In the first stage, Vinalines will build two wharves able to serve ships with a capacity of up to 11,000 TEU ships (a TEU is equivalent to one 20 foot shipping containers) and some logistics and storage facilities. Total investment in the two wharves is some four trillion dong (about USD 225 million). The first of the wharves will be completed in eighteen months.

Work will proceed in parallel to build container depots to international standards and set up a service area.

Van Phong Bay, north of Nha Trang City, is the only place on Vietnam’s long coast able to accommodate the largest oceangoing vessels, which require waters some 16.5 meters deep. It is advantageously located near principal shipping routes, and thus has great potential as a transshipment port, where large vessels would offload cargo for carriage by smaller vessels to other, smaller ports.

Experts say foreign investors needed

Doan Manh Dung, an engineer who is Secretary General of the HCM City Sea Sciences Association, questions Vinalines’ capability. After spending many years working on Van Phong port project, Dung thinks Vietnam will have to invest four or five billion dollars to have a modern international port. “Vinalines alone will not be able to carry out the project. Foreign consultants agree that this is a very big project which needs capital from different sources,” he said.

Nguyen Trong Hoa, Head of the Van Phong Bay Economic Zone Management Board, considers Vinalines fit only for the ‘start-up period.’

Pham Anh Tuan, Director of Portcoast, a port design consultancy firm, recommends that the management board enlist the participation of top shipping agents. There are about a dozen ‘world-class’ firms. If they agree to invest in the port, Vietnam will be able to attract other investment and clients as well, he says.

“It is really necessary to have close cooperation with shipping agents in order to successfully develop a container transit port,” Tuan stressed. He added that Vietnam should offer preferences in fees and services to attract the shipping agents.

Infrastructure must be improved

In the past, a lot of foreign investors came at the national government’s invitation to discuss the development of Van Phong Economic Zone, and then went back to US, Japan, Europe and the Middle East without making any commitments. “Maybe they left because they could not see any clear signs of the project implementation. Especially, they were concerned about our investment in infrastructure,” recounted Pham Van Chi, the former PPC head.

To date, the transport infrastructure in the Van Phong Bay area remains very poor. The 20 kilometre road from National Highway 1 to the Van Phong Economic Zone now can serve vehicles with the tonnage of 13 tonnes at maximum. The road must be upgraded to serve 30 tonne vehicles.

“Besides, the project needs a modern railway station, international airport and powerful finance system, including bankers and insurers. All those things are still not available at Van Phong,” said Doan Manh Dung.

Chi said that in order to have good infrastructure system in the economic zone, Vietnam needs to invest some USD 100 million from the state budget. He thinks that the Government needs to be ‘brave enough’ to allow Khanh Hoa province to develop a bonded zone that can earn money to develop infrastructure in Van Phong.

“We do not have enough strength to do everything and we need foreign investors. However, before we ‘invite’ them to Vietnam, we must be able to tell them how we will upgrade the infrastructure.” Chi said.

Van Phong port will benefit entire region

Khanh Hoa PPC deputy chairman Nguyen Chien Thang said that site clearance is well in hand. Local authorities are preparing to allocate land to Vinalines.

The Government has allowed Vinalines to select contractor itself instead of organizing competitive bidding. The contractor is a joint venture partner from South Korea. Phase I, the two wharfs and associated structures, will be completed within 36 months or sooner.

To ‘jump start’ the project, Thang continued, provincial authorities have decided to lend money the province has raised from auctioning land use rights in Cam Lam District. The province will also to issue bonds to raise funds for development of the Van Phong economic zone.

Van Phong Port is expected to benefit nearby provinces as well. Already in recent years, oil transit through the bay has brought in revenues of 1.5 billion dong annually. In November 2008, the Government approved development of a USD 4.5 billion petrochemical complex in the bay area as well. in the south of the central region and Central Highlands as well.

(Source:VietNamNet + TT)

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