Vietnam Needs US$1.5Bln for Van Phong Bay Planning

Vietnam Needs US$1.5Bln for Van Phong Bay Planning 

Vietnam needs an initial investment capital of US$1.5 billion to kick off an ambitious project to turn Van Phong Bay in the central coastal province of Khanh Hoa into an important economic hub with a major petroleum and container depot.

The Van Phong Bay economic development strategy, which has already received government approval, will need huge investment, said Vo Lam Phi, chairman of Khanh Hoa Province People's Committee.

The project's feasibility study was submitted to the government by the Vietnam Marine Navigation Corporation in late 2003 with an estimated investment of US$3.5 billion.

By the end of 2020, under the plan outlined in the study, the port will have 41 wharves and be capable of handling 17 million TEU (20 foot equivalent units) of containers and accommodating 15,000 TEU ships.

The project will be a worthwhile investment because the Southeast Asian region has only two international transit ports located in Singapore and Hong Kong, economists have said.

"We have been studying ways to attract investment for Van Phong Bay and will possibly apply the favorable policies that other regional countries have used and succeeded", chairman Phi said.

Researchers found that Van Phong Bay, off the coast of Khanh Hoa province is Vietnam's only bay that will qualify for such a major international transit port.

A recent study found the 45,000 ha bay's average 22-27m depth makes it ideal for large ships. It is also naturally protected by Hon Gom Island which can provide shelter during violent winds and strong tides.

Economists said that the bay became an international transit port, it would benefit Khanh Hoa's shipping, marine, tourism and service industries as well as causing a major change to the Southeast Asian region's marine service industry.

The ministry of Construction and Khanh Hoa authority have allowed foreign consultants to help plan the bay and funding for the planning will come from local sources and soft loans said Doan Manh Hung, general director of Van Phong Bay investment and development joint-stock company.

According to the local authorities, foreign consultants will come to Van Phong shortly to make a specific study before official planning begins.

In a related development, Khanh Hoa has signed economic co-operation agreements with two neighboring provinces of Phu Yen and Ninh Thuan in preparation for the Van Phong bay project.

Later this year, the province will start the building of US$10.8 million Hoa Son reservior to bring fresh water Van Phong.

Van Phong Bay has become a major oil depot of Vietnam after it received the first oil containers in 2002. Since mid-2002, Van Phong Bay paid a total of US$82.4 million to the State budget.

• VNS, VOV