VAFI proposes state divestments to build deepwater ports

August 26, 2019 | 11:43
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The Vietnam Association of Financial Investors (VAFI) has requested the prime minister and relevant authorities' approval to build deepwater ports from the proceeds of divesting state ownership in large corporations like Vinamilk, Sabeco, and FPT, among others.
vafi proposes state divestments to build deepwater ports
VAFI proposes to divest state ownership in Quy Nhon Port, Danang Port, and other big groups to collect capital for the construction of deepwater ports

According to VAFI, the construction of deepwater seaports, especially the Lien Chieu and Tran De public-private partnership projects in Danang and Soc Trang, costs billion dollars. The association recommended the government to whip up capital by selling part of its interest in companies. Additionally, it proposed selecting a multinational private investor which operates an international container ship network to build Tran De seaport.

Besides, the association proposed to organise an auction to sell 51 per cent of the state's ownership in Quy Nhon Port JSC and Danang Port JSC each to build a series of ports, including Quy Nhon, Dung Quat, Quang Tri, and Nghi Son.

The VAFI also suggested organising an international public auction for Lien Chieu seaport, and asked interested groups to commit to creating an open international container network.

Previously, in November 2018, Danang authorities issued plans to construct Lien Chieu port at a total cost of VND7.4 trillion ($321.74 million).

According to the plan, more than VND3.4 trillion ($147.83 million) would be invested in two initial docks which can receive cargo ships of up to 100,000 tonnes and container ships of 6,000-8,000 TEUs, delivering 3.5-5 million tonnes of goods per year.

A 820-metre-long breakwater and a 350m jetty are included in the plan, ensuring the port's operations on more than 300 days per year. A fairway of 7.2km, a maritime signalling system, as well as roads connecting to the port and other social infrastructure will also be constructed.

Nearly VND3 trillion ($130.43 million) will be allocated from the state budget, including VND500 billion ($21.7 million) from the backup capital of the 2016-2020 medium-term public investment plan and VND433 billion ($18.83 million) from the local budget.

Danang also plans to call for an investment of more than VND3.9 trillion ($169.57) from the private sector to build two additional docks. The preparations are expected to be completed by the end of 2019 for the project to be implemented and come into operation in 2020-2022.

Having over one million square kilometres of sea area with more than 3,200 kilometres of coastline, Vietnam now has 45 seaports, a number of inland container depots (IDCs), and big logistics hubs. Annually, the seaport system handles about 90 per cent of the country’s total volume of imports and exports, creating a driving force for national economic development.

However, the country still faces difficulties and is having problems in developing seaports efficiently and comprehensively, including a lack of connectivity with other means of multi-modal transport such as roads, railways, and waterways. There are also inconsistencies in land use planning, master planning on industrial development, as well as infrastructure planning which makes development even more difficult.

By Ha Vy

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