Focusing on Seaport Infrastructure Investment

However, cargo throughput to Can Tho ports totalled only 12 million tonnes in the year to date and was expected to handle over 14 million tonnes in 2009. This reflects the untapped potential in the region but investments for seaport infrastructure and canal dredge to facilitate cargo transportation is urgent. The second phase expansion of Cai Cui Port project and logistics zone, started in July 2009, will play a very important role in regional development. The expansion of the Cai Cui seaport would help Can Tho City and Mekong Delta provinces to promote waterborne trade with both domestic and foreign markets.

The Mekong Delta is the major exporter of agricultural and aquatic products but heavy-load ships are inaccessible to local ports. Thus, exported goods have to be trucked to seaports in Ho Chi Minh City and Ba Ria - Vung Tau province. Meanwhile, this region needs to import fertilisers and materials for production and these commodities are also imported through ports in HCM City and Ba Ria - Vung Tau province before trucking to the largest delta in the country. Importing and exporting through intermediary ports take more transport costs and time, thus reducing competitiveness of goods and increasing burdens on road systems and transit ports. An exporting company said if commodities are exported to Singapore from Can Tho Port, the distance will be shortened by hundreds of nautical miles and transport cost will be reduced by 8-10 per tonne of goods in comparison with the rate in Saigon Port. Besides, with availability of local ports, the traffic on National Road 1A will be reduced. For example, 10 million tonnes of imported and exported goods are cleared at Can Tho Port, traders will save hundreds of millions of US dollars. However, to directly import and export commodities to Singapore Port from Can Tho Port, the passageway must be able to support ships of over 10,000 DWT. According to Mekong Fisheries Joint Stock Company, the direct exportation of goods through Can Tho Port is the long-awaited desire of all businesses in the Mekong Delta region. The road from Can Tho Cit to Ho Chi Minh City is only some 180 km of roads but it frequently takes a day of travel because of traffic congestions. On the other hand, Saigon Port is now operating above its capacity and companies need to spend much time to clear import and export paperwork. These are difficulties Mekong Delta businesses have suffered.

 

Another advantage of the Mekong Delta is producing and processing agricultural and aquatic products which are usually traded in large volumes. Thus, waterway transportation and sea shipping will play very important roles. But, when the gateway to international maritime zones from the Mekong Delta has not been cleared, regional commodities are still transited ports in Ho Chi Minh City and surrounding provinces. Millions of farmers in the Mekong Delta are living with more difficulties because their products are less competitive on higher intermediary costs. The main reason for weak performance of Mekong Delta ports is the shallow passageway for big ships. In July 2009, the regular dredge of Dinh An canal was completed and put into use. The annual dredging costs more than VND13.4 billion. According to maritime authorities, the scour of Dinh An canal ensures the in and out of ships of 5,000 - 10,000 tonnes. Nonetheless, the canal operates well in the first two months from the regular dredging because sand will shallow the canal. Scientists pointed out that alluvial sand volume amounts to 1.5 million tonnes a year in the Dinh An canal but only a much smaller amount is scoured each year. According to the statistics from the Vietnam Maritime Administration, as many as 3.25 million cubic metres of sand were dredged at Dinh An canal from 1997 to 2007, with the largest volume of 582,000 cubic metres in 2001 and the smallest volume of 53,000 cubic metres in 2007. With such dredging work, the deepest position of the canal is measured at 4.5 metres but this depth is only maintained in one or two months.

 

Mekong Delta now has 13 seaports but operating capacity is only equal to 30 per cent of designed capacity. According to the Decision 344/2005/QD-TTg and the Decision 1024/QD-TTg of the Prime Minister on oriented tasks and plans for Mekong Delta traffic development until 2010 and vision to 2020 and approval of detailed planning for Mekong Delta seaports (Seaport Group 6) until 2010, the region will have 20 ports with annual handling capacity of 15 - 20 million tonnes, including port complexes along the Hau River, the Tien River and Ca Mau - Kien Giang. The Can Tho port complex will be the mainstay and its Cai Cui port will be the centre, with the largest capacity.

 

The Vietnam National Shipping Lines (Vinalines) said the cargo throughput via the Can Tho Port totalled over 12 million tonnes in the year to date. At the current growth, the cargo throughput via regional ports will reach 40-50 million tonnes a year by 2020. To satisfy the growing annual demand and to execute the Prime Minister’s decisions on seaport development, Vinalines sees this is the best time to invest in maritime system as well as other projects in Can Tho and south-western provinces. The top task is to build Cai Cui Port and its logistic zone. The first phase of Cai Cui Port, with annual handling capacity of 500,000 tonnes, has been put into service in January 2007. In 2008, the cargo throughput was five times larger than the designed capacity and the volume was already six times larger in the first six months of 2009. Before the urgent demand for expansion, Vinalines started the construction of the second phase of the Cai Cui Port. Three piers, container warehouses, general storage facilities, logistics zones and stevedoring facilities will be built to accommodate three ships of 20,000 DWT at the same time. When the project is completed, the Cai Cui Port will be the largest in the Mekong Delta region. Also according to Vinalines, the logistics zone for the Cai Cui Port has also built at the same time. Vinalines has invited Singaporean firms to invest in the logistics zone. According to the plan, the logistics zone will not be completed until 2015 but the time is expected to be shortened with the presence of foreign investors.

 

Recently, the Prime Minister issued the Document 1101/TTg-KTN on approving the policy to compensate and clear sites for dumping soil for the construction of the largest canal into the Hau River in Tra Vinh province. The Prime Minister also instructed the Tra Vinh People’s Committee to coordinate with the Ministry of Transport and the Vietnam Maritime Administration to compensate and support resettlements activities. The Ministry of Finance was told to cooperate with the Ministry of Planning and Investment, the Ministry of Transport and the Tra Vinh People’s Committee to advance money for the province to carry out compensation and resettlement activities.