Vinalines makes big plans for stalled port project

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Vietnam's top shipping firm Vinalines says it wants to expand a key international container port even though its construction has been indefinitely delayed since last year.

Construction of the Van Phong Port in the central province of Khanh Hoa started in October 2009. According to the original plan, the US$3.6-billion port would have 42 wharves and be able to handle up to 200 million tons of cargo per year on its completion in 2020.

The high-profile project, aimed to give Vietnam a competitive edge in the regional logistics sector, has been divided into four phases, with the start-up phase due to be finished this October.

Although the deadline is just a few months away, construction stopped last June. Tuoi Tre newspaper reported that apart from 114 steel columns that have been driven deep into the water, there is no other sign of the project moving forward.

In fact even the columns have not been installed properly.

Tran Huu Chieu, deputy general director of Vinalines, said many of the columns are higher than required by five to eight meters. The company has asked the designer a joint venture between Japan's Nippon Koei and Vietnam's Portcoast to review geological conditions of the construction site and solve the problem.

"The problem is the designer and Vinalines do not see eye to eye," Chieu added. He noted that the designer has asked for advance payment, but his company has refused to pay it. The designer has, therefore, delayed revising the project, he said.

Portcoast, however, refused to take the blame for the delay in revising the project.

Pham Anh Tuan, a representative of the company, said the height of the steel columns can be evened easily by chopping off the excessive lengths. The real issue is that Vinalines still owes his company around VND10 billion ($484,600), Tuan said.

Portcoast said that although the project's cost estimates have risen by VND3 trillion since October 2009, this is not unusual with seaport projects. The capital increase is also justified because the capacity of the port has been changed, it said.

Under the current plan, the port will be capable of receiving container ships of up to 9,000 TEUs (Twenty-foot-equivalent units) by the end of the start-up phase. That compares to the originally designed capacity to serve 6,000 TEU vessels.

However, Vinalines's Chieu said even the new capacity of 9,000 TEUs was no longer sufficient.

The Van Phong Port was designed in 2005, when the country's seaport system could only accommodate 4,000 TEU ships. But now several seaports, including Lach Huyen in the north and Cai Mep-Thi Vai in

the south, are capable of receiving ships with tonnage of 6,000 to 11,000 TEUs, Chieu said.

"We have proposed that the authorities allow us to expand the project so that it can handle larger ships of 12,000-15,000 TEUs and compete with other ports (in the region)," he said.

Chieu said if the expansion plan is approved in 2012, the start-up phase would be completed in 2015.

But for now, Vinalines has a more urgent task to finish. The company has been ordered by the Ministry of Transport to report on the project delay and identify the party responsible for it. The report has to be submitted by the end of this month.

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