Vietnam could save at least US$1.5 billion a year in shipping costs with an international-standard deep-water port at Van Phong Bay in the central province of Khanh Hoa, according to Dr. Chu Quang Thu, former acting head of Vietnam Maritime Administration (VMA).

The proposed port would mean ships carrying goods to and from Vietnam would no longer have to stop at Singapore’s deep-water port so the goods can be transferred to new vessels. Thu said the port would generate billions of dollars and act as a “tugboat” for the region’s economic development.

An international-standard deep-water port could receive hundreds of oil tankers a day, Thu said. The total port fee for docking, unloading and loading an average-size oil tanker is about VND80 billion ($4.5 million), he said.

At present, Vietnam’s ports are only capable of receiving ships that carry a maximum of 9,000 TEU (20-foot equivalent units).

This increases the cost of importing and exporting goods by US$400 for each TEU because smaller ships are used to carry goods between Vietnam and Singapore, where the cargo is transferred to larger more economical carriers.

According to the Vietnam Maritime Administration, each year Vietnam sends 3.8 million containers on large vessels to Europe and America via Singapore. Without having to send their goods through transit ports in Singapore or Hong Kong, the shippers would save at least $1.5 billion a year. Vu said Vietnam’s location meant an international-standard deep-water port could easily compete with the ports in Singapore and Hong Kong.

Work is due to begin soon on deepening the Van Phong Port so the facility can accept ships larger than 12,000 TEU, which are the most cost-efficient form of international shipping, Thu said, citing a report from the 7th International Conference on Coastal and Port Engineering in Developing Countries held in the United Arab Emirates last year.

The expansion of Van Phong Port was initially approved in 2007 but legal problems prevented work from beginning any sooner. Vietnam National Shipping Lines (Vinalines) has now teamed up with a foreign partner to build the deep-water port facilities in Van Phong Bay, which is protected from bad weather by Hon Gom Island