Loss-laden operators seek port in the storm

Troubled port operators CMIT and SP-PSA are seeking a new government lifeline amid huge losses Photo: Le Toan

Robert Hambleton, general director of Cai Mep International Terminal (CMIT), said at last week’s meeting with Deputy Minister of Transport Nguyen Van Cong that “We proposed that the Ministry of Transport (MoT) increase the channel depth to 15.5 metres, and license 18,000-TEU [20-foot equivalent units of container capacity] vessels to dock at the port to enable it to exploit its full capacity.”

“We have served a volume of goods lower than the port’s designed capacity due to the 14m channel depth and permission for just 14,000-TEU vessels to moor,” he added.

Hambleton also suggested some adjustments to customs policies to facilitate the operations of CMIT, a joint venture between Saigon Port, a subsidiary of Vietnam National Shipping Lines (Vinalines), and Danish company APMT.

In relation to a similar situation, earlier this month the operator of SP-PSA International Port (a joint venture between Saigon Port and Singaporean PSA) and Singaporean Ambassador to Vietnam Ng Tech Hean, met with Deputy Minister of Transport Nguyen Hong Truong to express their concern over competition with Saigon Premier Container Terminal (SPCT) and Saigon New Port in attracting intra-Asia ships following the dredging of the Soai Rap passage.

Previously, the service price at these ports was calculated at $57 per 20-foot container and $85 per 40-foot container. However, the market prices are now $32 and $50, respectively, which are lower than the Vinalines companies’ breakeven price, forcing the ports to incur losses and operate under their designed capacities.

According to a 2014 financial report, Vinalines has accumulated an overall debt of VND20.847 trillion ($980 million), of which CMIT contributed VND2.112 trillion ($99 million) and SP-PSA VND1.691 trillion ($80 million).

The situation did not improve in 2015, when the operators of the ports in the Cai Mep-Thi Vai port complex, including SP-PSA and CMIT continued to have trouble attracting cargo. During the year, the number of ships entering the area decreased from 16 to just seven a week. Meanwhile, those in the north from Quang Ninh to Ninh Binh provinces, in the southeastern region, and in Cat Lai of Ho Chi Minh City were overloaded.

Vinalines forecast that port operations would be able to see bright prospects this year on the back of economic recovery and significant impacts of various free trade agreements which would stir up import-export growth. The total volume of goods via ports is expected to hit 470 million tonnes in 2016, up 10 per cent from 2015, with goods going through ports in the northern and southern regions to continue increasing significantly.