Complete Seaport Infrastructure Management Mechanism Required

Vietnam has a lot of operational seaports but the cargo throughput is falling, forcing port operators to lower service charges to compete. Service rates have declined 15 - 20 percent, and even 30 percent on containerised cargo. Most containerised cargo imported and exported is handled by foreign shipping companies. This increases profits for foreigners, while profits for local ports decline and some even suffer losses. Price-driven competition is causing financial difficulties for investors.

 

One of the main problems facing Vietnam is overland traffic infrastructure. And the hot spot is container terminals. Many new port projects are being quickly expedited by investors, but have insufficient rear transport connections, support facilities and services, adding costs and risks for investors, raising difficulties for exporters and importers, and badly affecting the lives of hinterland communities.

 

Besides, the mechanism for managing and developing seaport infrastructures and maritime channels, with regulatory roles of port authority, is not finalised. In the north, access channels to deepwater ports in the Hai Phong area are getting shallower after years without being dredged, leading to negative effects on operation, a rise in transporting fees for shippers and ship owners, and a reduction in port operating efficiency. Passageways in Dinh Vu Port are designed for ships of 20,000 DWT but their depths only allow ships of 10,000 DWT. The demand for access channels capable of supporting ships of 20,000 DWT is urgent in both northern and central regions ahead of growing cargo throughput.

 

In Cai Mep - Thi Vai deepwater port complex, large container ship routes directly linked to North America and Europe have been formed and are carrying out market demand surveys for greater scale and higher frequency. However, as transportation demand has decreased in recent times, high domestic transport costs are slowing the progress of shifting cargo from old ports in Ho Chi Minh City to deepwater ports, forcing some shipping firms to change operating plans and use smaller ships for better economic efficiency. Existing problems in this deepwater port area are still insufficient traffic infrastructure, management mechanisms, procedures, and support services, particularly in the role of an international port.

 

In the Mekong Delta, Can Tho and Cai Cui ports are considered the hub ports. Dinh An passageway in Quang Chanh Bo Canal has been upgraded since 2009 at a cost of US$198 million to support ships of 10,000 tonnes. The project was expected to create a turning point to receive foreign ships to directly reach the ports but shallow passageways, as a result of no investment and delayed dredging, badly affect ships going in and out of ports on the Hau River and significantly hurt port operators. In addition, the opening of a good overland traffic linking to the Port 5 complex carries a lot of cargo to this destination, thus reducing the amount of cargo at Mekong Delta ports in recent years.

 

To address current weaknesses, Chairman of the Vietnam Seaports Association (VPA), Le Cong Minh, said that the association will further strengthen cooperation with ASEAN and international ports in the coming time to create favourable conditions for ports to develop human resources and perform economic integration more actively. At the same time, the association will intensify links with concerned industry associations to solve common issues of the maritime community.

 

The Vietnam seaport development plan till 2020, with a vision to 2030, has been adjusted, with infrastructure used as the leverage for economic development.

 

However, planning and implementation are being carried out slowly and inconsistently by the State, thus failing to meet the market demand and investment progress of enterprises. Indeed, transport infrastructure is running behind demand and underperforming its role as an economic development lever. In addition, the plan adjustment and accompanying mechanisms to boost competitiveness are still behind market demand, especially in the open market where Vietnam is heading in its marine economic strategy.

 

Mr Minh said, to support port operators to develop favourably, the Government of Vietnam needs to quickly complete a locality-based seaport infrastructure management mechanism, plan logistics and multimodal transportation development to compete with foreign countries, and synchronise port and supporting infrastructure development plans. The State guideline for port and logistics development planning needs to be institutionalised to generate motivation and resources for quick and effective port infrastructure development.