Lach Huyen sails ahead with PPP port milestone

April 01, 2018 | 08:00
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In what is anticipated to be the first public-private partnership port project in Vietnam, the first two foreign-invested terminals at Lach Huyen International Gateway Port will become operational next month, making conditions for seaborne transportation between northern Vietnam and neighbouring countries more favourable.
lach huyen sails ahead with ppp port milestone
The Haiphong transport development project will pioneer the public-private partnership format for seaports, Photo: Le Toan

According to the People’s Committee of the northern port city of Haiphong, where the project is located, the operation of the facilities is in line with the schedule. The terminals are able to accommodate vessels of 50,000 tonnes and more.

“The beginning of operations marks an important milestone in the city’s transport development. It will help Haiphong increase port capacity as well as help businesses ease difficulties they faced in the past, when channel levels frequently fluctuated due to the build-up of sand,” Nguyen Van Thanh, Deputy Chairman of the Haiphong People’s Committee, told VIR.

The berths have been developed by a joint venture between Japanese firms and military-run Saigon Newport Corporation, which now holds 50 per cent of the country’s container handling market share.

They plan to hold a workshop to introduce their services when the terminals are put into operation.

With its favourable location, the infrastructure development of Lach Huyen Port also appeals to other domestic and foreign investors.

Vietnam’s shipping giant Vinalines is waiting for the prime minister’s approval to invest in terminals 3 and 4 of the Lach Huyen complex. It is also interested in investing in terminals 5 to 9.

US-invested Cargill Vietnam – among the three largest animal feed producers in the country – is also keen on the possibilities of co-operating with the Ministry of Transport in developing grain bulk handling facilities in the port to facilitate its business activities.

“We are seeking a policy decision from the government, thus enabling us to call on more investors to join the development of other terminals,” Thanh of the Haiphong People’s Committee added.

The Lach Huyen complex is currently under construction. Component A is to be funded by the state, while Component B is to be developed by private investors. Lach Huyen Port will have nine terminals to be built from 2020-2025, with the volume of handled goods expected at 35 million tonnes a year. The number of terminals will be increased to 23 by 2030, with the volume of shipped goods forecast at 118 million tonnes a year.

The project, if successful, is expected to be a good model for other public-private partnership projects in the port industry amid a number of barriers, including a lack of risk-sharing mechanisms on exchange rates and the absence of a revenue guarantee, which have been discouraging foreign investors from joining transport projects.

By Bich Thuy

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