The construction of the new Nam Dinh – Phu Ly road started on January 29 in Nam Dinh city with the Tasco Joint Stock Company as its investor.

The road, 25 kilometres in length, has a total investment capital of nearly VND 3 trillion.

According to the investor’s commitment, the road will have been put into operation by 2014, making a contribution to avoiding traffic jams and minimising traffic accidents and creating opportunities for investment attraction and socio-economic development in Nam Dinh and Ha Nam provinces and their surrounding provinces in the southern area of the Red River Delta.

Spanish airport builder Garuda Group is expected to pump some US$15 billion into the construction of three world class airports in Vietnam, according to the Vietnam news agency’s report.

Following an agreement signed in Ho Chi Minh City on Wednesday, the airports are the International HCM City-Long Thanh Airport, costing US$6 billion, the new Ha Noi International Airport (US$8 billion), and the Chu Lai International Airport in central Vietnam with an investment capital of more than US$1 billion.

The investments will make Garuda the biggest foreign investor in the country so far, the Vietnam news agency said. Garuda group is an airport/seaport builder, manager and consulting company.

Long Thanh airport will be about 43km from the hub of Ho Chi Minh City, is expected to generate 5,500 permanent jobs for Vietnamese workers after construction.

Chairman of the Aviation South East Asia Giuliano Koenigsberg said the company would carry out the feasibility study and map out a master plan for Long Thanh project jointly with Viet Nam’s Southern Aviation Corporation.

Last month, the Garuda Group also reached an memorandum of understanding (MoU) with the Airport Design Construction Consultancy to set up a joint venture to build the new Ha Noi International Airport, its biggest project in Vietnam.

“It will be the largest and the most modern airport in Asia. It will be designed by multi-national companies from Spain and Italy to reflect (Vietnamese) culture and aspirations,” Koenigsberg said.

The foreign partners include Spanish Galo Architects and Italian AIG. The airport would have two heliports, a hospital, school, apartments and hotels.

After completion it is expected to generate 10,000 permanent jobs.

“The Government will grant Garuda management and operation rights for 30 years, to be extended by 10 years under certain circumstances, to cover the cost of project execution and to repay principle debts,” the news agency cited Koenigsberg sa saying.

Construction of the Ha Noi airport was expected to be carried out in three stages, the first from next year run until 2015 at a cost of US$4 billion, the second from 2015-18 would cost US$1.5 billion and the last phase would cost US$2.5 billion.

Phase one would accommodate 480 flights a day and 35 million passengers a year. Capacity would grow to about 850 flights daily and 62 million passengers annually by 2025 and to 1,096 flights daily and 80 million passengers annually by 2035.

“The new airport is due to replace the overloaded Noi Bai International Airport, which will likely be relegated to domestic flights only,” Koenigsberg said, adding that Noi Bai has reached its capacity at over 15 million passengers annually.

Last month, Garuda Group also agreed with the Middle Airport Corporation to establish a joint venture to build Chu Lai International Airport in the central province of Quang Nam. It was expected that Chu Lai would be larger than neighbouring Da Nang Airport.

“Spanish enterprises are ready to come here and we see potential in trade and investment between Spain and Vietnam,” he said.

Chu Lai had an annual capacity of 2.25 million passengers and 1.5 million tonnes of cargo by 2015 and 4.1 million passengers and 5 million tonnes of cargo by 2025.

Koenigsberg said Chu Lai was chosen because it was an important gate to central Viet Nam and was near Dung Quat and Chu Lai economic zones, Hoi An and the seaports of Ky Ha and Lien Chieu.

The group set up an office in Hanoi last year, providing consulting, investment and construction services for infrastructure projects, market surveys, trade and others.

The office will promote co-operative projects between Spain and Viet Nam. It also intends to set up an office in HCM City.

(BERNAMA)

With huge potential development, Binh Dinh is proving its role in pushing economic development in the central region. According to the Binh Dinh People’s Committee, the province’s economic growth in 2009 reached 7.96 per cent.

Of which, the agriculture, forestry and fishery sector grew 7.3 per cent, the industrial and construction sector grew 7.43 per cent and the service sector grew 11 per cent.

“Binh Dinh kept high growth last year amidst the economic difficulties in the country. This implies that our province is emerging as an economic hub in the central region,” said Le Huu Loc, vice chairman of the Binh Dinh People’s Committee.

Binh Dinh is 300 kilometres south of Danang and 600km north of Ho Chi Minh City. The province is said to have huge potential to be a driving force for economic development in the overal central region. According to the annual Provincial Competitiveness Index conducted by the Vietnam Chamber of Commerce and Industry and the United States Agency for International Development, which reflects the quality of provincial investments and their business climate, Binh Dinh was ranked 11th in 63 provinces nationwide in 2008 and it jumped to the 7th position in 2009.

Binh Dinh’s Quy Nhon seaport is one among the busiest ports in Vietnam. Last year, the port was reported to handle about 4 million tonnes of cargo, much higher than Danang port—the existing largest port in the central region. Due to its favourable geographic position, Binh Dinh is on the radar of many domestic and foreign investors.

“With its advantageous geographical position and bright economic oultlook, Binh Dinh is a good place to make investments,” said Nguyen Thanh, director of the An Phu Thinh Joint Stock Company. Thanh’s company is now developing a large commercial centre in Binh Dinh. Furthermore, his company plans to build a multi-million dollar residential and tourism project in the province.

According to the Binh Dinh Planning and Investment Department, the province has so far received 33 foreign invested projects with total registered capital of about $420 million. The projects’ investors are from the United States, Japan, China, Korea, the United Kingdom, Singapore, Malaysia, Germany, Thailand and Australia.

The Hong Kong-based Hong Yeung Company is also developing a $30 million industrial park in Binh Dinh’s Nhon Hoi Economic Zone. So far—although the park is still under construction—four foreign investors have registered to build their factories inside the park, with total investment capital of about $100 million.

Wood processing is an attractive industry in Binh Dinh. The province has 400,000 hectares of forests that can provide materials for wood processing plants. So far, more than 110 enterprises have invested into this industry in Binh Dinh and they can export about 22,000 containers of wood furniture on average each year.

Binh Dinh government announced that it would continue encouraging investors to invest in wood processing industry over the next few years. Loc said that the province was also expanding public investments in infrastructure projects to improve its investment climate.

“Although we have been actively improving the infrastructure network and business climate in Binh Dinh, the quality of licenced projects are still below our expectations and the development of some investment projects remain at slow pace,” Loc said. According to the Binh Dinh Planning and Investment Department, some domestic and foreign investors were delaying construction of their projects due to the impacts of the economic slowdown.

Binh Dinh authorities recently revoked investment certificates of the Gemadept Corporation, which had registered to build Nhon Hoi seaport. “In the future we will be very careful in selecting investors for developing projects in Binh Dinh,” Loc said.

Deputy Minister of Finance, Tran Xuan Ha, led a Vietnamese delegation to offer bonds in Hong Kong on January 18, in London on January 19, in Boston on January 20 and in New York on January 21.

The issuance of these bonds is in line with the Government’s resolution and the Ministry of Finance will fix their maximum interest rate at 7 percent per year over 10 years.

The mobilised capital will be used as loans for the Vietnam Oil and Gas Group, the Vietnam Maritime Corporation, the Da River Corporation and the Vietnam Machinery Assembly Corporation (LILAMA), to invest in the Dung Quat Oil Refinery Factory and two hydroelectricity projects and buy transport ships.

Earlier, in October 2005, Vietnam successfully issued Government bonds overseas worth a combined capital of US$750 million with an interest rate of 7.125 percent per year.

Vietnam will need between 360,000-440,000 billion VND (19.5-23.8 million USD) to develop its sea port system by 2020 with a vision towards 2030.

A master plan for sea port development has been approved by the Prime Minister, aiming to increasing the system’s cargo throughput to 500-600 million tonnes per year by 2015, 900-1,100 million tonnes by 2020 and 2.1 billion tonnes by 2030.

In the immediate future, priority will be given to developing several international-standards deep-water sea ports to receive big vessels, including the Lach Huyen port in the northern port city of Hai Phong, the Nghi Son port in the northern central province of Thanh Hoa and the Van Phong port in the southern central province of Khanh Hoa .

The PM in his decision to ratify the plan stressed the need to mobilise all resources in and outside the country for the plan. Capital from the State budget will be used for public infrastructure projects related to seaports such as sand-protection dykes and roads.

Vietnam currently has 39 sea ports.

Donors say it is time for Vietnam to implement a detailed strategy for infrastructure development instead of just making promises

At the Vietnam Business Forum (VBF) 2009, an annual event that took place before the donors’ meeting in Hanoi last week, Thomas Siebert, chairman of the American Chamber of Commerce (AmCham), suggested on behalf of the U.S. business community that Vietnam should improve its infrastructure.

According to him, the lack of high-quality infrastructure and logistical services is both a pressing concern and an impediment, especially to potential American investors. Indeed, this important issue has been brought up in every meeting between AmCham and the Vietnamese authorities since May 2006.

Siebert added that due to this problem, foreign projects in such sectors as export and industrial production are under threat. The participation of the private sector in financing, establishing and managing infrastructure is necessary, especially in power generation and deepwater port construction.

Various problems were mentioned at the forum, including inadequate infrastructure and the delay in constructing bridges, inter-provincial roads and overland infrastructure. The Japan Bank for International Cooperation (JBIC) provided Japanese enterprises’ assessment of Vietnam’s business environment. JBIC expressed five main concerns about Vietnam in 2009. Like in 2008, poor infrastructure was considered the most pressing problem in 2009. This year, 33.8% of the respondents considered this the greatest obstacle hampering their business, as compared with 43.1% in 2008. Noriyasu Yuge, representative of JBIC, said that 80% of Japanese companies considered roads as the first factor that needs improvement, followed by power supply (60%) and ports (40%).
In an interview with the Saigon Times, Simon Andrews, regional director of the International Finance Corporation (IFC), which joined forces with the World Bank and the Ministry of Planning and Investment to host VBF 2009, emphasized that Vietnam’s ranking (93/183) in the report on business environment in 2010, compiled by IFC and the World Bank, indicates the need for more action in this respect.

Meanwhile, Tony Foster, who oversees the VBF’s subcommittee on power and energy, highlighted the importance of public private partnerships (PPPs) in developing infrastructure in Vietnam. He said that inefficacious public projects such as those involving the HCM City-Long Thanh-Dau Giay Expressway, the expansion of National Highway 51 and the 68-km Bien Hoa-Vung Tau Expressway connecting big industrial parks in Dong Nai with Cai Mep-Thi Vai Port have spelled trouble for the development of private seaports. According to him, these problems mean that it may take up to four years to complete the construction of Lach Huyen Port and the related overland infrastructure.

Deputy Minister of Transport Nguyen Hong Truong estimated that Vietnam would need a staggering US$120 billion over the next 10 years to improve infrastructure nationwide. Foster proposed that the Government should encourage the private sector to participate in infrastructure development through public-private partnerships (PPP). However, he said this model will succeed only if the policy is clear, the market for PPP is competitive and reasonably priced, and the legal framework is well-developed, with the vague regulations currently governing build-operate-transfer projects phased out. Foster warned that without appropriate institutions, PPP would not thrive.
He told the Saigon Times that the Government should flesh out a detailed, coherent and long-term strategy for infrastructure development, instead of making vague promises.

About 10 infrastructure projects in areas of expressway, hi-speed railway and seaport request funding under the Public-Private Partnership (PPP) form, said the Ministry of Transport (MoT).

According to MoT Deputy Minister Ngo Thinh Duc, the Dau Giay-Phan Thiet expressway, invested by Bitexco Group, will be the first pilot project to be implemented under the PPP model in the field of building the national expressway network.

Bitexco’s representative said the project has an estimated investment capital of 14.35 trillion VND (Over 775 million USD), of which 1.4 trillion will come from Bitexco and the remaining will be mobilised from credit organisations, domestic and foreign partners. Work on the 100km-long route is expected to commence late 2010.

The Ninh Binh-Thanh Hoa expressway project, with an estimated investment capital of 29.8 trillion VND (Over 1.6 billion USD), has also been selected to be implemented under the PPP form. The 120 km-long expressway will run through three provinces, including Nam Dinh, Ninh Binh and Thanh Hoa.

To speed up the implementation of the two projects, the Ministry of Planning and Investment has called for the World Bank’s financial support through its reconstruction and development capital sources.

In the context of expressway projects facing difficulties in capital refunding, using WB loans though the PPP model is considered the most effective and feasible capital mobilisation solution due to its low interest rates, long lending time and fewer risks, Thinh said.

Apart from the two above-mentioned projects, the MoT has made a list of eight other projects calling for domestic and foreign private investors under the PPP model. They include the Da Nang-Quang Ngai, My Thuan-Can Tho, Noi Bai-Ha Long, Ha Long-Mong Cai, Dau Giay-Da Lat and Ben Luc-Long Thanh expressways, the Hai Phong International port and the Ho Chi Minh City-Can Tho hi-speed railway.

The Phu Tho provincial People’s Committee in coordination with the Ministry of Transport organised a groundbreaking ceremony on December 23 for a section running through the northern province of Phu Tho under the Noi Bai-Lao Cai expressway project.

The 31.64km 4-lane section, stretching from Viet Tri City, through Phu Ninh and Lam Thao districts and Phu Tho town to Cam Khe district, has a total investment capital of over VND2,385 billion.

Construction work, scheduled for completion in 40 months, is under taken by the Republic of Korea’s Posco E&C Co. Ltd under supervision by Spain’s Gentinsa consulting firm.

The Noi Bai-Lao Cai expressway is the longest one (264km) and most expensive (US$1,249 million), running through 5 provinces and cities, including Hanoi, Vinh Phuc, Phu Tho, Yen Bai and Lao Cai.