Incapable Seaports

The peak-time congestion of container goods in the Southern Focal Economic Area (SFEA) which holds more than 70 per cent of Vietnamese container cargo output causes a headache to importers and investors. In fact, the capacity of the Vietnamese seaports fails to meet the national targets of import and export growth in the 2006-2010 phase.

 

According to Mr. Tan Hua Joo, who works for the Port subcommittee of the Infrastructure Group under the Vietnam Business Forum, container terminals in Ho Chi Minh City, namely Cat Lai and VICT ports, are being expanded to raise capacity. In Hai Phong Port, the continuous dredge of passageways has allowed more incoming and outgoing ships but has only been able to support ships of less than 10,000 DWT.

 

According to Mr. Diep Thanh Kiet, Chairman of the International Garment and Textile Training Centre (IGTC) in Ho Chi Minh City, when the goods delivery season comes, garment and textile companies encounter hardship in chartering ships as the capacity for inbound and outbound cargo is limited. This seriously affects the competing capacity of Vietnamese enterprises.

 

Experts at the Vietnam Business Forum said that forecasts about the seaport demand by the Ministry of Transport mismatched the actual growth in the past five years. Based on statistics from the Ministry of Transport and the Ministry of Planning and Investment, the capacity growth was expected at 15 per cent a year, too low for the actual growth of the economy. The master plan for seaport development says Ho Chi Minh City will handle 26 million tonnes of cargo and the seaports in the SFEA will serve 53 million tonnes by 2010 - too low for the next five years’ economic growth. According to the forecast at the Vietnam Business Forum, the container seaport demand has reached 2.6 million TEUs (twenty-foot equivalent unit) in 2006.

 

Figures about seaport capacities have not been frequently updated and have not exposed the deficient volumes in several areas. Notably, the recent closure of Tan Cang - Saigon Port in 2005 has largely reduced output in the southern region. At present, the timeline for the reallocation of ports in Nha Rong, Khanh Hoi and Tan Thuan areas is unclear. Besides, the schedule for the development of new seaports, especially in Cai Mep - Thi Vai area, has been delayed and has not introduced a clear timetable for the project’s execution.

 

The bad planning for the construction of seaports has led to the illogical allocation of financial resources. According to the statistics of the Vietnam Maritime Administration in 2002, Vietnam had some 100 ports along the seacoast, or one seaport in every 32 km on average. However, the investment for port construction was too scattered and bore ineffective results. In particular, the infrastructure construction depends on the road system, container warehouses, transhipment terminals and general warehouses in order to meet the market demand.

 

The Ministry of Trade has put forth the export growth target of 17.5 per cent annually in the 2006-2012 period; and hence, the output of container cargo will grow by 20-25 per cent.

 

According to the Port Subcommittee (under the Vietnam Business Forum), to attain the supply-demand equilibrium point, address the capacity loss and make the effective use of investment, the Ministry of Transport and the Ministry of Planning and Investment need to clearly define the growth in output of the port and of the port operator in the 2006-2012 period. The current plan showed that the accumulation of port capacity has little effectiveness because it’s impossible to identify the capacity with the purpose of port - for general goods or container goods. As for container ports, there are only two, namely Cat Lai and VICT. Meanwhile, shipping firms and importers only want to use specialised container ports.