Vietnam ports take in less than expected

TN News

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Despite fierce competition between Vietnam's existing seaports, the country is gearing up to build more.

Chan May Port in the central province of Thua Thien-Hue opened in 2003. Seven years later, the port is only taking in a modest volume of goods.

Locally produced cement and wood shavings make up most of the traffic; only a small quantity of goods come in from other provinces, said Huynh Van Toan, deputy director of Chan May Port Ltd., which operates the facility.

As a result, the port, which stretches 300 meters, can only generate annual revenues of VND20 billion.

A little further to the south, business is just as slow at the Tien Sa and Song Han ports in Da Nang. Last year the two ports handled 3.16 million tons of goods, compared to their annual capacity of around five million tons.

Volume is expected to increase only slightly this year.

Nguyen Sia, deputy general director of Da Nang Port, said there were problems in forecasting shipping traffic.

"When the ports were constructed, their prospects were really bright as the East-West Economic Corridor was expected to bring more goods into the central region," he said. "But, it turned out there weren't enough goods coming in to central provinces, even as they continued to build many seaports."

The corridor, which became operational in December 2006, is a project aimed to promote economic integration of four regional countries Laos, Myanmar, Thailand and Vietnam.

It's not necessary for each province to have its own seaports, Sia said. They cost a huge amount of money to build and each new port only adds an additional competitive burden on the already struggling ports.

The gap between the plan and reality is even bigger in Ba RiaVung Tau Province. The southern coastal province has a total of 17 ports which take in a total of just 13 to 14 million tons of goods, annually.

The figure pales in comparison to this year's target of 53 million tons.

But while some existing seaports operate at only 20 percent of their capacity, many other projects to build new ports in the province are underway. According to the province's Transport Department, 40 other seaports will be built.

Construction will soon begin on 18 of the projects.

The volume of goods was projected based on the pace of investment and economic growth, said Pham Anh Tuan, project director of the Portcoast Company, a consulting firm on seaport construction. Given the economic fluctuation of the past few years, however, the amount of goods was not as high as expected, he said.

Although the province serves as a gateway to production hubs like Ho Chi Minh City and Dong Nai, poor transport systems and insufficient seaport services make it difficult to attract more goods, Tuan said.

The problem is that while these ports have to operate below capacity, the heavily trafficked ports in HCMC face constant congestion problems.

James Fong, chief operating officer of the Singapore-based Global Maritime and Port Services, said Vietnam needs to identify the demand of each city and province.

He said it took Singapore up to 45 years to develop its seaport, which is now one of the busiest in the world.

Vietnam cannot complete its seaport system in a day or two and it needs to develop a careful strategy that will prevent a glut of struggling seaports, he said.

Doan Manh Dung, general secretary of HCMC's Marine Science and Technology Society, said the government should only focus on developing strategic seaports for large economic regions.

If provinces want to build more ports, they can attract investment from the private sector, he said.

Some provinces in the Mekong Delta plan to continue investing in their ports but Dung said there is no need to spend a lot of money to build large ports there.

He said these destinations should only serve as "satellites" of the Singapore Port or Van Phong, a deep water port in the central province of Khanh Hoa which is scheduled for completion in 2020. They only need to be able to accommodate small ships of 20,000-30,000 tons to help transport goods further inland, he claimed.

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