Several world-class seaports will be put into operation in the next several years but cranes and wharfs are not enough. Surrounding infrastructure and service facilities that enable fast customs clearance and low costs for moving goods are essential if Vietnamese seaports are to hope to become transhipment ports for the region and the world.
Ports wait for roads
Southeast of Ho Chi Minh City, it’s planned that the Cai Mep-Thi Vai port complex, extending nearly 30 kilometers from Cai Mep in Ba Ria-Vung Tau Province to Go Dau in Dong Nai Province, will become an international gateway port, one of the most important in Vietnam.
For the present, however, cargo from Ho Chi Minh City and nearby provinces can reach the port complex only via narrow National Highway 51. Truck drivers complain about the road; the lane for two-wheeled vehicles is only a meter and one-half wide so bikes always run in the lane for cars, causing traffic jams and accidents.
Pham Anh Tuan is head of CP Planning Company, which was an advisor to the Portcoast unit that devised Vietnam’s seaports plan. Tuan says that in another four or five years the Cai Mep-Thi Vai Port complex will be ready to welcome giant vessels of 50,000 to 80,000 deadweight tons. However, work on infrastructure -- roads, rail, telecommunications, water and power systems – is lagging, so the huge port will be slow to realize its potential.
A staff of the European Chamber of Commerce (Eurocham) in Vietnam blamed unsynchronized development of the seaport systems and road network for big cargo jams at the nation’s ports. He called it a big problem of Vietnamese seaports which needs to be quickly solved.
In southern Ho Chi Minh City, another significant complex of ports centered on Hiep Phuoc in Nha Be district is also waiting for roads. The Hiep Phuoc Port will be operational next year, but no road yet leads to it. All the construction materials are transported by waterway.
It’s a similar story at the Saigon Container Port, which opened in October 2009 but has been handicapped by a wholly inadequate surrounding road system.
Cat Lai Port in District 2 of HCM City handles up to 80 percent of the containers going to and from the southern provinces but – again no surprise -- provincial 25B leading to the port is potholed and overloaded. It is very common to see long rows of container trucks backed up on this road.
Cao Tien Thu, former director of Hai Phong port, said in other countries, seaports are linked to roads, railways and waterways but in Vietnam, seaports typically depend only on roads. Worse, road quality is poor, slowing the movement of goods. It takes trucks nearly three hours to navigate Highway 5 from Hanoi to Haiphong, though it’s not even 100 kilometers distance.
Service facilities at seaports also handicap Vietnam’s seaports. Tran Duc Minh, chairman of the Vietnam Shippers’ Council, recalls that Saigon was once called the ‘Pearl of the Orient’ and was a major port, served by ships from Japan, Korea, Taiwan and China, American and Europe and meeting all their needs.
Now, Minh says, services at all Vietnamese ports are poor. From pilotage and channel marking to ship supply and repairs to recreational opportunity for crews, the nation’s ports don’t measure up. Most ships stop in Vietnam only to unload or load goods for transhipment in Singapore.
Minh gave a concrete example: in Vietnam, it takes up to three days for a small container ship – only 1000 TEU – to unload and take on new cargo. By comparison, the world’s most modern ports can ‘turn around’ a 10,000 TEU ship in the same time. Every day a ship is in port in Vietnam costs it $2000-3000, so time is money.
Ngo Khac Le is the legal department chief at the Transport and Chartering Corporation (Vietfracht), a state company that was equitized in 2006. He says that the biggest problem of Vietnamese seaports is the way people work. “The state should insist that port employees do their jobs properly or be fired. If they feel some pressure, workers will treasure their jobs and their customers.”
Opportunity knocks at Van Phong
Van Phong Bay, north of Nha Trang City on the south-central coast, is the only place on Vietnam’s long coast capable of accommodating the largest oceangoing vessels, container ships which have a draft of 16.5 meters. The deepwater bay is located very near principal sealanes. Many believe it has great potential as a transshipment port, where large vessels would offload or take on cargo from smaller vessels.
Specialists from Petrotech Marine Consultants (UK) judged that Van Phong Bay’s location and structure are vastly superior to port locations in Singapore, Taiwan or Hong Kong.
Van Phong port’s development could benefit not only shippers, but also the local economy. Once established as an international transit port, Van Phong could regularly receive 6,000 TEU large ships carrying goods to the US and to Europe, and from there, their cargos could be redistributed throughout southeast Asia. Obviously, this prospect interests potential investors.
Van Phong port’s establishment obviously would make great changes in Vietnam’s seaport system. In that event, ships drawing up to twelve meters could dock at Cai Lan port (HCM City), while ships drawing ten meters could dock at Hai Phong’s new Dinh Vu port (currently Hai Phong Port can only handle smaller ships drawing up to seven meters).
Van Phong Port is expected to benefit nearby provinces as well. Already oil transit through the bay has brought in 1.5 billion dong annually. In November 2008, the Government approved development of a $4.5 billion petrochemical complex in the bay area, to serve the south-central coast and the Central Highlands.
Singapore and Hong Kong: the Van Phong scheme’s competition
While Vietnam is about to build two 690 meter wharves of 690m at Van Phong, Singapore has just completed an additional 18 wharves for big vessels, raising its annual cargo handling capacity from 24.8 million TEU in 2006 to 50 million TEU by 2018. Hong Kong plans to add 12 wharves to increase its capacity to 40 million TEU by 2020. In this context, speeding up construction of Van Phong Port is a must.
Experts note that Van Phong will have to compete not only with Hong Kong and Singapore, but also with many other ports, like Busan (South Korea), Shanghai (China), Gaoxiong and Keelung (Taiwan), Klang and Tanjung Palapas (Malaysia) and Laem Chabang (Thailand).
The $3.6 billion Van Phong International Transit Port plan developed by Vinalines (Vietnam Shipping Lines Corporation) has four phases:
Warm-up phase: construction of two 690 meter wharves, with a yard of 41.5 hectares, able to serve container ships up to 9000 TEU by 2013.
First phase (2015): four wharves for ships up to 9000 TEU and five wharves for other ships, spreading over up to 125 hectares.
Second phase (2020): with eight wharves for container ships up to 12,000 TEU and eight wharves for other ships, using 405 hectares in area.
Visionary phase: the port is complete. There are 25 wharves for container ships up to 15,000 TEU and 12 wharves for other ships. Facilities and storage spread over 750 hectares in area. Total wharf length has reached 11,880-12,590m. The port is served by a 20 kilometer road system and a spur line from the upgraded north-south railway.