2 minute read
Big Spending plans
Vietnam is already a major manufacturing hub, with further potential to off er an alternative option to China. AJ Keyes examines future port development plans
Vietnam is one of the most densely populated countries of South-East Asia, with an estimated population of 96 million. It has also emerged as one of the largest developing economies in South East Asia. Although the country remains heavily dependent on agriculture and agricultural products, the Government remains keen to ensure reformative policies boost import and export potential.
Recent GDP reached an all-time high of $271.2 billion, with an average GDP growth of 6.4 per cent in the period between 1990 and 2020, representing continued trade progress. Traditionally, Ho Chi Minh (Saigon) was the focus of container terminal development, but as the economy has grown, the port focus has become more widespread.
SHIFTING SUPPLY CHAINS
Focus on shifting a large volume of freight from China and Singapore to Vietnam has boosted the development of port infrastructure in the region. This has been further supported by trading potential triggered by the US-China trade issues, leading foreign investors to regard Vietnam as a viable option for establishing manufacturing units, along with export and import activities. The lower manufacturing costs in Vietnam compared to China represent a key factor here too.
The fund for all of the port development in Vietnam to 2030 is estimated at VND313 ‘‘ trillion (US$13.6 billion)
The number of ports in Vietnam, including all the small facilities, totals around 320, along its 3444km coastline. However, in terms of major commercial operations in the country that can handle larger container ships and volumes, there are far fewer tangible options. Figure 1 provides a summary of the main facilities in the country for container handling.
FIVE-GROUP PORT DEVELOPMENT AIMS
According to the newly released Vietnam port master plan to 2030, the national government wants to develop a more modern seaport system to support improved economic competitiveness and industrial development as a high-middle income country – and all by the end of the current decade.
The master plan outlines a range of initiatives across different port groups, as summarised in Table 1, with infrastructure priority given to international port developments at Lach Huyen (Hai Phong) and Cai Mep (Ba Ria-Vung Tau).
Moreover, to improve connectivity the rail network will be developed to link ports on a North-South corridor, along with extra highways, national routes and local roads. In addition, the development of inland ports in economic zones and trade corridors, using waterways and river/sea routes will be considered.
The fund for all the port development to 2030 is estimated at VND313 trillion (US$13.6 billion), which will primarily be financed from non-government sources. Clearly, the private sector will be targeted – and needed – to bring these plans to fruition.
8 Table 1: Summary of Vietnam Masterplan Port Plans 8 Figure 1: Overview
