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Vietnam: Joint-venture ports start to wear out

Thursday, 03 September 2015 | 10:00
The feasibility reports all showed the ports have great advantages in geographical position and deep water lines which allow big-tonnage ships, and can become large transit ports in the region.

However, what is happening in reality is far different from the prediction. All four ports have been taking loss, while Vinalines (the Vietnam National Shipping Lines), the Vietnamese partner in the joint ventures, wants to restrict the capital contribution to only two of the ports.

A report shows that the total volume of goods going through the ports in Vung Tau area in 2014 was 59.3 million tons, a 20 percent increase over the year before. However, the ports there have been exploited at a low capacity, just 15-20 percent of the designed capacity.

It was estimated that 217,000 containers of imports and 207,000 containers of exports went through the Cai Mep area in the year, but only 1.53 percent of imports and 1 percent of exports went through joint venture ports.

An analyst noted that the problem lies in the lack of related logistics services.

Import/export companies in HCM City and Binh Duong prefer transshipping goods from mother ships to freighters and then carrying to their warehouses on waterways to get customs clearance at Cai Mep ports, and then carrying goods to warehouses by land.

There is no ground for gathering and giving back empty containers at the ports.

The second reason which makes it impossible for the ports to become transit ports is the current laws which stipulate that used goods must not be imported through this channel. As a result, shipping firms do not dock at ports, but go through other deep water ports in the region.

The third reason lies in the poor service infrastructure caused by the management policies. As maritime fees and charges are high for all sizes of ships, shipping firms hesitate to exploit new routes.

Vietnam’s imports/exports to and from Europe, which make up 1/3 of the country total imports/exports, still go through ports in HCM City, not in the Cai Mep area.

And fourth, the joint venture ports are unable to compete with other ports in HCM City – Hiep Phuoc area, including Tan Cang, with its reasonable competition policy and the deep waterline capable of receiving big ships of up to 50,000 DWT.

Sources said that Vinalines was planning to sell SP-PSA and CICT, and would only have capital contribution to CMIT and SSIT.
Source: VietnamNet Bridge
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