Bad planning scuttles port system

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Feasibility studies were fabricated to get projects licensed

An idle port in Cai Mep-Thi Vai in the south. Many ports in the country are unused or vastly underused because of ad hoc development decisions.

In what seems to be another glaring example of ineffective infrastructure development in Vietnam, a series of large seaports in southern Vietnam are lying dormant waiting for ships while other ports up north are overstretched.

Experts say the contrast is evidence that no proper feasibility study or assessment was done when planning a port network for the nation, and as a result, Vietnam has failed to deliver on its often-stated plan to become a transport hub for the region.

Hai Phong, around 100 kilometers from Hanoi, is the major sea transport gateway for the northern region as a whole. The city has a cluster of ports, together known as Hai Phong Port, but none of them can receive vessels of more than 40,000 dead weight tonnage (DWT).

The original expectations for the ports were low. An official forecast in 1999 had the total cargo handled by them reach 7.3 million in 2003 and 25 million in 2010. The actual volume, however, surpassed 38 million tons in 2010.

Ngo Bac Ha, former director of Hai Phong Port, said some of the ports it has are very small, with only one or two berths that are around a hundred meters long, unable for even one ship to fit in.

Ha said the problem is that the small ports try to undercut each other to attract shippers but none of them can handle large container ships. The ports, therefore, earn little money from their services.

The situation is completely different at Cai Mep-Thi Vai, a port area strategically close to Ho Chi Minh City.

A total of US$1.2 billion has been spent on developing a series of deep-water ports in the area that can handle up to 8 million tons of cargo per year. However, so far, less than 1 million tons of goods are passing through the ports annually. According to the Vietnam Seaports Association, many of the ports here were jointly developed by local and foreign investors. The lack of cargo means investors will continue to face losses and finally, it will be the Vietnamese investors who will have to withdraw from the business because they cannot outlast their foreign partners.

Experts say the oversupply is a result of hasty investment decisions that did not take into consideration real market demand.

Professor Nguyen Van Ngoc from the Vietnam Maritime University in Hanoi said investors always conducted feasibility studies before starting on a seaport project, but most of the time these studies were not objective and only highlighted the potential benefits so that the project could be licensed.

There has been a lack of proper, independent studies with counter arguments against any of the projects, he said, noting that only such studies could prevent wasteful projects from affecting long-term national interests.

Dang Van Huy, former president of the university, said China has a long-term plan for its seaports, aiming to build international ports in important places like Shanghai and Tianjin while leaving other ports to handle cargos for the domestic market. Chinese large ports are often far offshore, allowing very large ships to dock without depending on tides, he added.

Singapore is another country that has successfully developed a seaport system and capitalized on its location. The city nation also has developed a modern logistics infrastructure, which enables it to tap into the strong demand of goods transportation between Japan, the US and the Middle East, Huy said.

A former official of the Ministry of Transport said Vietnamese officials have to be more cautious with further development of new seaports, since ambitious plans for several deep-water, international ports have not worked out.

"The next generations will pay a high price if poor investment decisions continue to be made now," he said, mentioning in particular the ongoing Lach Huyen Port project in the northern province of Hai Phong, which he said could struggle to find shippers.

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