Japan International Cooperation Agency (JICA)

Ministry of Transport, Socialist Republic of Vietnam (MOT)

Transport Development and Strategy Institute (TDSI)

THE STUDY ON THE

NATIONAL TRANSPORT DEVELOPMENT STRATEGY
IN THE SOCIALIST REPUBLIC OF VIETNAM
(VITRANSS)

Technical Report No. 8

PORT AND SHIPPING

July 2000

ALMEC CORPORATION
PACIFIC CONSULTANTS INTERNATIONAL
 PREFACE

During the period of the Study on the National Transport Development Strategy in
Vietnam (VITRANSS), various technical papers have been prepared by different
Study Team members in various occasions to facilitate the discussions with
counterpart team, concerning subsector agencies and to document major findings
and outputs produced in the process of the Study. These papers have been
organized into a series of technical reports (See Table A below) which intend to
provide more detailed background information for descriptions and discussions
made on key study components and issues. These technical reports are working
documents of the Study which, however, will be useful for further reference, by
the counterpart team and related subsector agencies.

Table A
List of Technical Reports

No. 1 Transport Surveys and Database

No. 2 Main Commodities Analysis and Freight Transport

No. 3 Transport Cost and Pricing in Vietnam

No. 4 Transport Sector Institutions

No. 5 Road and Road Transport

No. 6 Railway

No. 7 Inland Waterway

No. 8 Port and Shipping

No. 9 Air Transport

No. 10 Rural Transport and Cross Border Transport

No. 11 Environment

No. 12 Transport Sector Funding

 Technical Report No. 8
SHIPPING AND PORTS

Table of Contents

Page

PART I: SHIPPING

1 INTRODUCTION ................................................................................I-1-1

2 REVIEW OF RELATED STUDIES, PLANS AND PROJECTS

2.1 Past Study and Recommendations ........................................ I-2-1

2.2 Ongoing and Committed Projects .......................................... I-2-3
2.3 Government Policies and Regulations ................................... I-2-4

3 CURRENT SITUATION

3.1 Administrative Framework ..................................................... I-3-1

3.2 Industrial Framework ............................................................. I-3-5
3.3 Operation and Management ................................................ I-3-15
3.4 Safety Enhancement and Environmental Protection ..............I-3-25

4 DISCUSSIONS ON SELECTED ISSUES

4.1 Government Policies on the Shipping Industry in Asia ............I-4-1

4.2 Development of a Transshipment Port
in Vietnam ............................................................................I-4-10

5 SHIPPING DEVELOPMENT STRATEGIES

5.1 Strengthening Maritime Administration ..................................I-5-1

5.2 Competitive and Liberalized Shipping Environment ................I-5-2
5.3 Fleet Expansion and Modernization ........................................I-5-5
5.4 Projects on Maritime Safety ....................................................I-5-9
PART II: PORTS

1 INTRODUCTION ...............................................................................II-1-1

2 REVIEW OF PORT STUDIES, PLANS AND PROJECTS

2.1 Past Studies and Recommendations .................................... II-2-1

2.2 Ongoing and Committed Projects ......................................... II-2-5
2.3 Government Plan and Policy ................................................ II-2-6

3 CURRENT SITUATION

3.1 Port Administration and Management ................................... II-3-1

3.2 Existing Port System .............................................................II-3-2
3.3 Infrastructure ........................................................................ II-3-6
3.4 Traffic Demand.......................................................................II-3-8
3.5 Finance and Management ....................................................II-3-13

4 DISCUSSIONS ON KEY PLANNING ISSUES

4.1 Assessment of Existing Port Capacity .................................. II-4-1

4.2 Future Development Requirements ...................................... II-4-3
4.3 Port Development Strategies Toward Year 2020 ...................II-4-7
4.4 Other Key Issues .................................................................II-4-12

5 PROPOSED PORT DEVELOPMENT (2001-2010)

5.1 Port Traffic in 2010 ............................................................... II-5-1

5.2 Regional Level of Investment ............................................... II-5-6
5.3 Identified Projects for the Master Plan Period ........................II-5-9
5.4 Investment Plan....................................................................II-5-23

APPENDICES

APPENDIX A Detailed Port Development Plan and Investment Plan

by the Government of Vietnam ............................................ A-1

APPENDIX B Construction Cost and Productivity

in Port Development .............................................................B-1
 Glossary

ADB Asian Development Bank

APL-NOL American President Line-Neptune Orient Line
APM AP Moller
ATN Aids to Navigation
C&F Cost & Freight
CATT Corporation for Advanced Transport and Technology
CFS Container Freight Station
CIF Cost Insurance and Freight
COVASCO Saigon Waterway Transport Corporation
DAMATOCOSCO Danang Maritime Transportation and Commercial Services Co.
DMSP Domestic Shipping Modernization Program
DWT Dead Weight Tonnage
ECL Eastern Car Liner Co., Ltd.
EIA Environmental Impact Assessment
ESCAP Economic and Social Commission for Asia and
Pacific
FALCON Falcon Shipping Company
FOB Freight on Board
GEMADEPT General Forwarding and Agency Co., Ltd.
GEMATRANS GEMATRANS (VIETNAM) LTD.
GMDSS Global Maritime Distress and Safety System
HAMATCO Hanoi Maritime Transport Company
HCMC Hanoi Maritime Commercial Center
IADA Intra-Asian Discussion Agreement
ICD Inland Container Depots
IMO International Maritime Organization
INLACO International Labor Cooperation Agency
ISM Code International Safety Management Code
JBIC Japan Bank for International Cooperation (formerly OECF)
JICA Japan International Cooperation Agency
LOA Length Overall
MAPETRANSCO Maritime Petroleum Transport Corporation
MARIMEX Marine Import/Export and Trading Company
MARISERCO Maritime Supply and Service Company
MARPOL International Convention for the Prevention of
Pollution from ships
MASERCO Marine Servicing Company
MATRA Maritime Trading Center
MCC Maritime Credit Corporation
MITECO Maritime Informatics and Technology Company
MOT Ministry of Transport
MOU Memorandum of Understanding
MSRCC Maritime Search and Rescue Coordination Center
MTTS Maritime Technical and Training School
NOWATRANCO Northern Waterway Transport Corporation
ODA Overseas Development Assistance
OECF Overseas Economic Cooperation Fund
PJICO Petrolimix Joint Stock Insurance
PSC Port State Control
PVIC Petro Vietnam Insurance Company
RORO Roll-on Roll-off
SFICO State Financial Investment Company
SOLAS Safety of Life at Sea
SSF Ship Finance Facility
SVF Shipping Venture Facility
STCW International Convention on Standard of Training
Certification and Watch-keeping for Seafarers
TDSI Transport Development and Strategy Institute
TRAMASCO Marine Trading and Servicing Company
TRANSVINA Vietnam Hi-Tech Transportation Co., Ltd.
UIC United Insurance Company
VIA Vietnam International Assurance
VICONSHIP HP Vietnam Container Shipping Agency-Hai Phong
VICONSHIP SG Vietnam Container Shipping Agency-Saigon
VICT Vietnam International Container Terminal
VIJACO Vietnam Japan International Transport Co., Ltd.
VIMADECO Vietnam Maritime Development Corporation
VIMARU Vietnam Maritime University
VINALINES Vietnam National Shipping Lines
VINAMARINE Vietnam National Maritime Bureau
VINASHIN Vietnam Shipbuilding Industry Corporation
VINASHIP Vietnam Shipping Company
VISERITRANS Vietnam Sea and River Transport Corporation
VISHIPEL Vietnam Ship Electronic Communications Company
VITRANCHART Vietnam Sea Transport and Chartering Transport
VITRANSS Vietnam Transport Strategy Study
VIWA Vietnam Inland Waterway Bureau
VMRCC Vietnam Maritime Regional Coordination Center
VMSA Vietnam Maritime Safety Agency
VOSA Vietnam Ocean Shipping Agency
VOSCO Vietnam Ocean Shipping Company
VTS Vessel Traffic Service
 Part I

SHIPPING
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

1 INTRODUCTION

Since the 1990s, Vietnam has successfully been integrated with the global trade
market. Vietnam imports various industrial products and exports agricultural, mining
and industrial goods. Such an interactive economic relation is firmly supported by
overseas shipping.

Although there is no comprehensive policy framework available on Vietnam’s

overseas shipping, some expressions regarding shipping nationalisms are observed
in government documents such as “transport right”. But the utmost importance is how
to provide smooth and economical shipping services to shippers and consignees,
since trade is the heart of the economy and transport influences the competitiveness
in trade. Thus the policy to strengthen Vietnam’s overseas shipping industry should
facilitate trade.

Coastal shipping has a significant role in Vietnam. Between 1995 and 1998 the
shipping volume doubled despite the Asian economic crisis, proving that the north-
south economic linkage has been tightened. Many transport officers and planners
believe that coastal shipping is an economical means to carry bulk cargo over long
distances. However, not many understand that coastal shipping could also compete
even with truckers handling small consignment, if more container and roll on-roll off
(roro) ships would be assigned in liner operation.

The shipping industry should be strengthened but without unnecessary protection

measures. In this sense, a liberalized market access with a level playing field is very
much important. Some policy interventions effective in neighboring countries should
be studied such as tax exemption for providing public service and a ship finance
facility.

Lastly, safety and environmental considerations will become more and more
important in Vietnam. There are some significant movements against maritime
accidents, oil pollution and substandard ships, e.g., international conventions,
regional agreements and joint operations. These intend to enhance maritime safety
and environmental protection through technical harmonization and upgrading and
joint enforcement of laws or regulations such as the Global Maritime Distress and
Safety System (GMDSS), Standard of Training Certification and Watch-keeping 1995
(STCW-95), port state control (PSC), and International Safety Management Code
(ISM Code). It should be noted that Vietnam shipping development must be
sustainable as well as competitive.

I-1-1
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

2 REVIEW OF RELATED STUDIES, PLANS AND PROJECTS

2.1 Past Study and Recommendations

In coordination with the Vietnam Ministry of Transport (MOT), the Japan

International Cooperation Agency (JICA) organized a Study Team with the
primary aim of developing a master plan for coastal shipping in Vietnam. The
main output of this study was the Master Plan on Coastal Shipping Rehabilitation
and Development in Vietnam (1997). On the other hand, there is no
comprehensive study on overseas shipping available in Vietnam, except for
business plans of shipping operators. Therefore this section only highlights the
JICA coastal shipping study.

The study identified the expected roles of coastal shipping as follows:

• bulk cargo haulage over long distances as an economical means;
• regional linkage between two different economies, the north and the north; and
• an alternative mode from land transport in an emergency.

Development of coastal shipping, however, requires a comprehensive approach

wherein relevant aspects should be effectively integrated. The study directed the
development of following relevant aspects:
• Major coastal shipping routes were identified on which development of 3,000
to 5,000 DWT (dead weight tonnage) vessels would be most economical.
• The coastal shipping fleet needs to be expanded, modernized and diversified,
including container ships, roll-on roll-off (roro) ships and transport of special
goods.
• Improvement of shipyards and ship repair is badly needed.
• Seventeen (17) ports were identified as key general ports for coastal shipping.
• A total of 832 km of sea-cum-river ways should be developed to effectively
connect coastal shipping ports.
• The management skills of shipping operators should be improved to
strengthen marketing and customer relations, and management know-how in
modern business and ship operation practices.
• Adequate forms of secondary transport should be provided in accordance with
the situation at each port.
• An adequate supply of competent maritime personnel should be ensured by
improving existing institutions such as the Vietnam Maritime University
(VIMARU).
• Enhancement of maritime safety and environmental protection is becoming
more and more important, covering ship inspection, PSC, aids to navigation
(ATN), search and rescue (SAR), and oil spills.

The overall cost of the Master Plan was estimated to be US$ 1.76 billion between
1997 and 2020 (refer to Table 2.1.1).

I-2-1
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

Table 2.1.1
Estimated Cost of the Coastal Shipping Master Plan (1997-2010)

Estimated Cost
Subsector/Category Mainly Incurred by:
US$ M %
Fleet Expansion and Modernization
1/
-Vessel Acquisition Ship Operators 986.5 56.2
-Improvement of Ship Construction Yards Ship Yards 14.3 0.8
-Improvement of Ship Repair Yards Ship Yards 16.8 1.0
-Shipyard Quality Management Center Ship Yards 0.6 0.03

2/
Ports and Waterways Development
-Coastal Shipping General Ports Infrastructure Port Operators 240.5 13.7
-Coastal Shipping Specialized Ports Port Operators 61.4 3.5
Infrastructure 26.0 1.5
-Sea-cum-River Way Infrastructure VINAMARINE/IWB
Improvement
N/A -
Coastal Shipping Management Modernization
-Training in Modern Operating Methods Ship Operators
N/A -
Secondary Transport Improvement Program
-Improvement of River and Road Infrastructure IWB/VRA

Maritime Human Resources Development 22.7 1.3

Program 2.7 0.2
-Improvement of VIMARU and MTTS VINAMARINE/VIMARU
-Training Equipment for Tanker Operation VIMARU

Maritime Safety Enhancement and Environment 1.3 0.1

Protection Program 173.0 9.9
-Establishing Testing Laboratories VIRES 169.4 9.6
-Aids to Navigation Equipment VMS 40.4 2.3
-Maritime Safety Vessels (for ATN and SAR) VINAMARINE/VMS etc.
-Sea Communication Equipment VISPHEL/Ship Operators

TOTAL 1,755.6 100.0

1/ Including oil tankers (assuming the Dung Quat project is implemented)
2/ Excluding oil facilities

I-2-2
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

2.2 Ongoing and Committed Projects

The JICA Coastal Shipping Study (1997) proposed priority project packages
(refer to Table 2.2.1). As of November 1999, the implementation progress was
checked as follows:

1) Nine key coastal shipping ports

Eight ports except Dong Nai were or are being rehabilitated and improved by
either domestic or official development assistance (ODA) fund.

2) Five sea-cum-river ways serving selected ports

Minimum rehabilitation works have been done by domestic effort. The Lach
Giang-Hanoi route was investigated by the Asian Development Bank (ADB)
consultant. The Hai Phong access channel is being investigated by a Japan
Bank for International Cooperation (JBIC) consultant.

3) Safety equipment

The Spanish government committed to rehabilitate and build part of the visual
ATN. No arrangement was done to deploy SAR fleet on Vietnamese waters.

4) Fleet development and modernization

The coastal shipping fleet has been expanded to meet increasing traffic
demand. But some are temporarily diverted from overseas shipping. No
financial institution has been established to support domestic ship acquisition.
5) Sea communications system

In compliance with the GMDSS, an investment of US$ 18 million was made to

acquire land facilities and sea communications equipment mostly for northern
Vietnam. However, southern Vietnam should be covered as well.

6) Maritime human resource development

VIMARU Hai Phong installed new training equipment in compliance with

STCW-95. But it is not enough to train and retrain all Vietnamese seafarers.
So far, Vietnam Maritime Registry (VMR) has not improved its testing
equipment.

I-2-3
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

Table 2.1.2
Priority Project Packages (1997-2000) of the JICA Coastal Shipping Study
Proposed Components Cost (US$ Million)
Package A
1. Improvement and Rehabilitation of Existing Main Ports 160.1
(Haiphong, Hanoi, Cua Lo, Danang, Qui Nhon, Nha Trang,
Saigon/Dong Nai, and Can Tho)
2. Five Sea-cum-River Ways serving Selected Ports 10.9
3. Safety Equipment 65.8
Visual aids to navigation (21.7)
Maritime safety fleet deployed to the above-mentioned ports (41.2)
Workshops for fleet maintenance ( 2.9)
4. Fleet Development and Modernization Program 234.6
Acquisition of ships (225.9)
Shipyards ( 8.7)
5. Shipping Operation-related Improvement N/A
Subtotal 471.4
Package B
6. Technical Improvement
Sea communication system in compliance with GMDSS
Land facilities 33.8
Vessel equipment 3.0
Subtotal 36.8
Package C
7. Maritime Human Resource Development
VIMARU improvement in compliance with STCW 4.5
Installation of testing laboratories to strengthen ship inspection 1.3
Subtotal 5.8
TOTAL 514.0
Source: JICA Study Team 1997

2.3 Government Policies and Regulations

Related Rules and Regulations

The fundamental laws and regulations covering maritime activities in Vietnam are
provided in the Maritime Code of Vietnam (which was passed in the National
Assembly on 30 June 1990 and took effect on 1 January 1991). The Maritime
Code consists of the following:

Chapter I General Provisions

Chapter II Seagoing ships
Section A Vietnamese seagoing ships
Section B Maritime safety and prevention of environmental
pollution
Section C Control of capacity of seagoing ships
Section D Documents of ship
Section E Right to ownership of seagoing ships

I-2-4
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

Chapter III Ship crew

Chapter IV Seaports and port authority
Chapter V General provisions
Section A Carriage contracts
Section B Cargo loading
Section C Bill of Lading
Section D Cargo carriage
Section E Discharge and delivery of cargo
Section F Freight and additional costs of cargo carriage
Section G Termination of contract
Section H Responsibility to compensate for loss of cargo
Section I Detention of cargo
Chapter VI Contracts on transportation of passengers and luggage
Chapter VII Charter party
Chapter VIII Shipping agents and maritime brokers
Section A Shipping agents
Section B Maritime brokers
Chapter IX Maritime piloting
Chapter X Sea towage
Chapter XI Maritime salvage
Chapter XII Recovery of sunken property
Chapter XIII Collisions
Chapter XIV General average
Chapter XV Civil liability of ship owners
Chapter XVI Marine insurance contracts
Section A General provisions
Section B Insured value and insurance payment
Section C Transfer of right under a marine insurance contract
Section D Cargo Insurance
Section E Performance of marine insurance contract
Section F Payment of compensation where a third person is
responsible for loss
Section G Abandonment of subject matter insured
Section H Assessment of compensation payment
Chapter XVII Resolution of maritime disputes
Chapter XVIII Final provisions

Provisions in this code applies to all kinds of seagoing ships which engage in the
following activities: (1) carrying cargo, passengers and their effects, (2) exploiting,
exploring and processing maritime resources at sea, and (3) conducting other
activities for economic purposes, ships of which shall hereinafter be referred to
as merchant ships (Article 3 of Chapter 1). It is also provided that seagoing ships
as referred to in this Code means floating vessels, with or without engines, which
engage in activities at sea and in navigable water (Article l of Chapter 1).

I-2-5
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

According to Prime Minister Decree No.14/CP dated 25 February 1994, seagoing

vessels in Vietnam are defined as follows:
• Seagoing vessels whose engines have a power rating of over 75 CV,
• Nonpropelled vessels over 50 GRT or 100 DWT or 20 m in length, and
• Seagoing vessels smaller than the above-stated vessels and which operate
more than 12 miles from the coast of international sea anes.

In addition, government issued various ordinances, decrees and directives to

meet regulatory requirements and international maritime conventions. In 1998,
for instance, it promulgated the following decrees and legal issuances:

1) Decree 39/1998/ND-CP on sunk assets

2) Decree 40/1998/ND-CP on maritime transportation of companies and private
enterprises
3) Decree 55/1998/ND-CP on cargo detained in Vietnam
4) Decree 99/1998/ND-CP on purchasing maritime ship
5) Decree stipulating administrative punishments for violation of maritime
navigation rules
6) Rules on Training, Certification and Rank Assignment (Decision No.
1387/1998/QD-MOT)
7) Rules on Management of Maritime Communication System
8) Rules on Foreign Ships in Transit in Vietnamese Territory
9) Rules on Management of Pilotage
10) Official letters providing guidelines for the issuance of legal documents by the
Vietnam National Maritime Bureau (VINAMARINE)
11) Directive No. 56/1998/CT-BGTVT on the intensification of administrative
reform in the transport sector

From these supplemental legal issuances, a safe assumption can be made that
the Vietnamese government is keen on providing a certain regulatory formality to
the maritime subsector in accordance with national and international maritime
policies and their enforcement should be required for a long-term effect.

Overseas Shipping Policy

Government and the MOT have indicated their intent to export 40% of the
volume of goods, 30% of crude oil, and 20% of dry goods by container (Notice
No. 19/TB of 24 February 1996).

Recently, maritime authorities announced their expectation of adequate

investments to upgrade and increase domestic fleet capacity from the present
level of less than 1.0 million tons to 4.4 million tons, capable of handling 40% of
the volume of national export and import. Industry observers estimated that fully
carrying out this expansion project would require an investment of US$ 2 billion
by 2000 and US$ 5 billion by 2010 (Viet Nam News, 24 March 1999).

I-2-6
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

3 CURRENT SITUATION

3.1 Administrative Framework

Vietnam National Maritime Bureau

The administrative duties and functions of Vietnam’s maritime transportation

subsector is under the mandate of VINAMARINE. This organization is authorized
to assume governmental responsibilities over the administration of maritime
activities and agencies including seaport authorities, search and rescue and
registration of seagoing vessels and seafarers.

On behalf of the MOT and directly reporting to the Prime Minister, the
VINAMARINE chairman exercises the function of state administration over the
maritime subsector throughout the country including all state-run maritime
enterprises, organizations and individuals.

However, the Bureau’s administrative management is weak, perhaps due to its

equally weak institutional organization and regulatory functions and the lack of
expertise in shipping. In particular, as reported in the JICA study, the Bureau is
weak in investment planning, legal framework and maritime safety aspects.

A recent VINAMARINE report indicates a proposal submitted to the MOT for the
Bureau’s administrative reform specifically on the following concerns:
1) Reform of administrative mechanism
2) Reinforcement of maritime administrative apparatus at all levels
3) Training of government officers

This proposal led to the MOT’s issuance of Directive No. 356/1998/CT-BGTVT

dated 3 November 1998, which addresses the intensification of administrative
reform in the transport sector. VINAMARINE then issued notification 1950/TB-
CHHVN dated 14 December 1998 to units under its direct administration in
compliance with the MOT directive. This notification outlined the Bureau’s
programs and plans to implement administrative reform which are as follows:

1) Continuing to reform the Bureau’s administrative procedures and those of its

administrative organs;
2) Ensuring to work within its mandate in a manner that is transparent, simple
and fair to avoid problems and negative feedback;
3) Setting up regulations and publicizing specific instructions on procedures and
order in dealing with work ethics.
4) Implementing administrative reform in performing the following tasks:
(1) Issuing business licenses for transport shipping and maritime services,
(2) Issuing business licenses for business in new seaports,
(3) Registering sea vessels and crews,
(4) Organizing training courses and issuing maritime professional certificates,

I-3-1
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

Figure 3.1.1
Organizational Chart of VINAMARINE

CHAIRMAN

VICE CHAIRMAN

Headquarters Representative Office Organization under Port Authority

Direct Control

Quan Ninh
Vietnam Search
Administration Hai Phong & Rescue Center
Hai Phong

Vietnam Maritime
Safety (VMS) Le Mon in Thanh Hoa
Investment Ho Chi Minh
Planning
Vietnam Nghe Tinh
Rescue Union

Thuan An
Seaport Dept. Liaison Office Maritime Technical &
to IMO Training School 1
Danang

Finance and
Accounts Maritime Technical & Qui Nhon
Training School 2
Training School 2
Nha Trang

Legal Maritime Project

Management Unit 1 Vung Tau

Safety Inspection Maritime Project Sai Gon

Management Unit 2

Dong Thap
Personnel
Nghe Tinh Port Maritime Construction
Advisory Company My Tho

International
My Thoi – An Giang
Pilot Company 1
Qui Nhon Port
Science and Can Tho
Technology Pilot Company 2

Kien Giang
Pilot Company 3
Nha Trang Port
Seagoing Vessel & Nam Can – Minh Hai
Seafarer Registration Vietnam Ship Electronic
Communication
Dong Nai
Company

Other Business Units Hai Thinh

Shipping and Service
Quang Binh

Source: VINAMARINE, September 1999

(5) Issuing licenses for foreign sea vessels to enter Vietnam and issuing

I-3-2
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

licenses for sea vessels to come in/out of ports,

(6) Dealing with infrastructure construction for the sector,
(7) Dealing with administrative procedures, records at VINAMARINE and its
organs.

Under the above-mentioned new directive and notification, a more effective and
enhanced administration of the maritime subsector is expected in the near future.

Other Related Organizations

There are two organizations on maritime safety and ship registration under the
MOT – the Vietnam Maritime Safety Agency (VMSA) and Vietnam Maritime
Register (VMR).

The VMSA was created on 1 January 1995 with the primary responsibility of
providing conventional ATN services, while the VMR started as a section in 1964.
It was then named Vietnam Register of Ships and upgraded to bureau level on
19 July 1979.

In 1990, VMR started the technical supervision and classification of offshore

installations. On 16 December 1998, Notice No. 1959/CHHVN-TTATHH was
issued informing everyone concerned that the Vietnamese government and MOT
has signed the memorandum of understanding (MOU) on PSC in the Asia-Pacific
region in Tokyo on 1 December 1998. This MOU took effect on 1 January 1999.
Vietnam’s adoption of Resolution A.787 (19) of the International Maritime
Organization (IMO) on PSC procedures intensifies the roles and functions of the
VMSA and VMR.

In aiming for “safe ships and clean seas” and the elimination of substandard
ships, both organizations are required to improve procedures on ship inspection,
issuance of certificate and marine safety enforcement.

I-3-3
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

Figure 3.1.2
Organizational Chart of the Vietnam Maritime Safety Agency

General Director

Branch Office Vice General

Ho Chi Minh Director

Technical Planning Financial Administrative Inspection and General Affairs Central

Bureau Investment Bureau Bureau Security Bureau Communication
Bureau Bureau Bureau

Region I Region II Region III Mechanical Mechanical Project

Enterprise Enterprise Enterprise
No. 1 No. 1

Region IV Region V Construction

Offshore Hydrographic Hydrographic Enterprise
Enterprise No.1 Enterprise No.2

Source: VINAMARINE, September 1999

Figure 3.1.3
Organizational Chart of the Vietnam Maritime Registry

General Director

Deputy General Director

Internal Quality Management System
Committee

Motor Vehicle
Quality &
Seagoing Ship River-going International Equipment
Classification Ship Offshore ISM Code Industrial Relation and Rule Dept.
Management
Dept. Classification Dept. Dept. Dept. Development Center
Dept. Dept.

Motor Vehicle Financial Technical &

Inspection Training Dept Computer Personnel Administrative Scientific VR Journal
Dept. Dept. Planning
Management Dept. Consultant
Center Personnel Investment
Dept. Service Center

75 Inspection Stations throughout 23 Offices and Suboffices for Ship and

the Country Industrial Surveys and Certificate

Source: VINAMARINE, September 1999

I-3-4
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

3.2 Industrial Framework

Vietnam National Shipping Lines

VINALINES was established on 1 January 1996 in accordance with the Prime

Minister’s Decision No. 250/TTg dated 4 April 1995. To pursue organizational
reform, operational management and commercial functions were transferred
from VINAMARINE to VINALINES. As a result, a number of state-owned
enterprises (SOEs), many of them leading ocean-going and coastal shipping
companies, such as Vietnam Ocean Shipping Company (VOSCO), Vietnam Sea
Transport and Chartering Company (VITRANCHART), Vietnam Shipping
Company (VINASHIP), and Falcon Shipping Company (FALCON), were placed
under VINALINES.

One of the organization’s major functions is to operate five major ports in

Vietnam, namely: Hai Phong, Quang Ninh, Danang, Saigon, and Can Tho, and
the respective companies operating in these ports.

Since its inception VINALINES has expanded its business activities in shipping,
port operation and other services to improve cargo-handling capacity and
increase transportation capacity. Together with its member companies,
VINALINES has become a major stockholder in several joint venture and holding
companies in the maritime industry. Following are the major operators and
companies that comprise VINALINES’ business activities:

1) Port Operators
(1) Hai Phong Port (port and container terminal operation)
(2) Quan Ninh Port (port operation)
(3) Danang Port (port operation), joined in 1997
(4) Saigon Port (port and container terminal operation)
(5) Can Tho Port (port operation), joined in 1997

2) Shipping Companies
(1) VOSCO
(2) VITRANCHART
(3) VINASHIP
(4) FALCON
(5) Vietnam Sea and River Transport Corporation (VISERITRANS)
(6) Maritime Petroleum Transport Company (MAPETRANSCO)
(7) Thuy Bac Shipping Company

3) Service Companies
(1) Vietnam Ocean Shipping Agency (VOSA)
(2) Vietnam Maritime Development Corporation (VIMADECO)
(3) Vietnam Container Shipping Company – Hai Phong (VICONSHIP HP)
(4) Vietnam Container Shipping Company – Saigon (VICONSHIP SG)

I-3-5
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

Figure 3.2.1
Organizational Chart of VINALINES

BOARD OF CHAIRMAN OF
DIRECTORS THE BOARD

SUPERVISORY
BOARD

PRESIDENT & CED

VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT MEMBER

COMPANIES
Port Operators
Shipping/Service
Companies
Others
VICE PRESIDENT

Science and Planning and Accounting Dept. Legal Dept. Finance Dept. Business and
Technology Dept. Investment Dept. International
Relations

Personnel Dept. Administration Ship Management HCM City Branch Subsidiary

Dept. Dept. Office Undertakings

Source: VINALINES

(5) Maritime Informatics and Technology Company (MITECO)

(6) Hanoi Maritime Trading Center (MATRA – 1)
(7) International Labor Cooperation Company (INLACO Saigon)
(8) Maritime Supply and Service Company (MARISERCO)
(9) International Labor Cooperation Company (INLACO Hai Phong)
(10) Marine Technical Material Import/Export & Supply Company
(11) Marine Import/Export and Trading Company (MARIMEX)
(12) Marine Servicing Company (MASERCO)
(13) Marine Trading and Servicing Company (TRAMASCO)
(14) Marine Trading Center No. 2 (MARTA 2 – Nha Trang)

I-3-6
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

4) Joint Venture, Holding and Subsidiary Companies

(1) GEMATRANS (Vietnam) Co., Ltd.: Feeder service operator, liner agency
and container-related service provider, with CGM- France
(2) Vietnam-Japan International Transport co., Ltd. (VIJACO): Freight
forwarder, CFS operator, truck and warehouse operators, with group of
Japanese companies
(3) Vinabridge Co., Ltd.: Freight forwarder, truck and warehouse operator,
shipping agency and CFS operator, with K-Line of Japan
(4) Phili-Orient Lines Vietnam, Ltd. Freight forwarder, with Singapore partner
(5) Hanoi Maritime Commercial Centre (HCMC): Hotel and office apartment
services (with foreign partner)
(6) General Forwarding and Agency Co., Ltd. (GEMADEPT): Terminal and
inland container depot operator, shipping agency, trucking and
warehouse operator and freight forwarder
(7) VINALINES’ Consulting Company: Marine consulting firm

VINALINES is created to be a nationwide shipping network and has grown to

be one of the top economic groups in Vietnam.

Shipping Companies

In Vietnam, there are various types of shipping companies, namely: 1) state-owned

companies, 2) shipping companies under the provincial government, 3) joint-venture
companies, 4) companies under corporation, and 5) private companies.

State-owned Shipping Companies

About 70 of state-owned shipping companies are owned by only a few ship

owners and operators in Vietnam, such as VOSCO, VITRANSCHART,
VINASHIP, and FALCON, organized under VINALINES. These major companies
currently operate 48 vessels (including six foreign-registered vessels) with a total
DWT of 568,030, serving ocean-going and coastal shipping requirements.

As regards container transportation, member lines are allowed to serve foreign

trade using two container vessels and a roro vessel only, but they have a
monopoly over domestic container transport.

In the past, a Japanese car carrier named Eastern Car Liner Co., Ltd. (ECL) was
granted permission to participate in the domestic container transport on the
north-south route. Later, however, said cabotage was revoked by the maritime
authority due to the commencement of operations by a joint-venture company
under VINALINES. Other state-owned shipping companies under VINALINES are
independently operating within the coastal and inland waterway shipping industry
using their own vessels. Vietfracht, for one, has three vessels with a capacity of
over 3,000 tons.

I-3-7
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

Table 3.2.1
State-owned Shipping Fleet, 1998

No. Name of Company/Ship Vessel Type Year Built DWT

VOSCO
1 Fortune Freighter Dry cargo vessel 1978 6,559
2 Fortune Navigator 1978 6,559
3 Son Ben Hai 1974 11,849
4 Chuong Duong 1974 11,849
5 Tra Khu 1974 11,849
6 Song Duong 1978 15,210
7 Thai Binh 1979 15,210
8 Lucj Nam 1980 15,210
9 To Lich Dry cargo vessel 1980 15,210
10 Song Thuong 1976 10,029
11 Song Day 1976 10,029
12 Vinh Phuoc 1986 12,300
13 Hau Giang 1977 12,800
14 Hau Giang 02 1978 12,665
15 Hai Au 01 1982 6,476
16 Cabot Orient Bulk cargo vessel 1984 4,485
17 Morning Star 1983 21,353
18 Golden Star 1983 23,970
19 Polar Star 1984 24,835
20 Huong Giang 1989 13,880
TOTAL 262,327
VITRANSCHART
1 Long Khanh Dry cargo vessel 1968 16,745
2 Sai Gon 03 1980 15,547
3 Far East 1982 15,622
4 Sai Gon 01 1973 15,625
5 Sai Gon 02 1973 15,625
6 Long Thanh 1978 11,814
7 Long An 1982 9,873
8 Long Binh 1984 9,062
9 Viet Nam-Nam Tu 1970 9,111
10 Long Hai 1974 8,579
11 Sai Gon 04 1982 15,555
12 Hwk One 1983 14,986
TOTAL 158,144
VINASHIP
1 Dien Bien 01 Dry cargo vessel 1975 8,294
2 Dien Bien 02 1976 8,294
3 Dien Bien 03 1975 8,294
4 Truong Son 1960 12,430
5 Hung Vuong 01 1981 4,747
6 Hung Vuong 02 1981 7,071
7 Tan Trao 1966 4,302
8 Bach Long Vi 1981 2,118
9 Hung Vuong 03 1975 5,923
10 Thang Loi 01 1969 2,569
11 Thang Loi 02 1970 2,569
TOTAL 66,665

I-3-8
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

Table 3.2.1 continued

No. Name of Company/Ship Vessel Type Year Built DWT

VINALINES
1 Van Lang Container vessel 1983 5,223
2 Hong Bang 1984 5,223
3 Me Linh 1983 11,235
4 Van Xuan 1984 11,242
5 Dien Hong Semi-container vessel 1984 6,289
6 Phong Chau Container vessel 1983 17,000
TOTAL 56,212
FALCON
1 Healthy Falcon Product oil tanker 1985 6,022
2 Pretty Falcon Crude oil tanker 1985 6,631
3 Pacific Falcon 1986 60,960
TOTAL 73,613
XNLHVTB FA SONG
1 Viet Ba 01 Coastal vessel 1980 1,400
2 Back Dang 22 1988 1,000
3 Back Dang 06 1985 1,230
4 Phuong Long 01 1987 1,000
5 Back Dang 14 1987 1,000
6 Hong Ha 16 600
TOTAL 6,230
CTVTHUY BAC
1 Trang An Coastal vessel 5,105
2 Thuy Bac 01 200
3 Livaso 02 400
TOTAL 5,705
INLACO
1 Pha Lai (HP) General cargo vessel 4,354
2 Inlaco (SG) Training vessel 2,223
3 Tam Dao/Chuu Long General cargo vessel 6,000
4 Tri An Training vessel 4,190
TOTAL 16,767
VIETFRACHT (MOT)
1 Kim Lien Dry cargo vessel 10,050
2 Nguyen Du 3,700
3 Hoa Sen 3,500
TOTAL 17,250
VIETRANSTIMEX (MOT)
1 Vietranstimex 01 Coastal vessel 2,056
2 Vietranstimex 02 1,401
TOTAL 3,457

70 GRAND TOTAL 666,370

Source: VINAMARINE 1998

Shipping Companies under the Provincial Government

There are shipping companies under the provincial government’s control and with
head offices in Hanoi, Danang and Ho Chi Minh. They have their own vessels and
are individually operating in foreign and domestic shipping. These are:
• Hanoi Maritime Transport Company (HAMATCO in Hanoi)

I-3-9
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

• Danang Maritime Transportation and Commercial Services Co.

(DAMATOCOSCO in Danang)
• Saigon Shipping Company (head office in Ho Chi Minh City)

Saigon Shipping owns four cargo vessels (1,000 to 5,080 DWT) plying the
Vietnam-southeast Asia-Vietnam route. It has 114 employees and 281 seafarers
(Officers 138, Rating 143) and fields its crewmembers to foreign shipping
companies from their own human resource pool. Saigon Shipping has entered
into a joint venture with a foreign partner for container feeder services.

Joint Venture Companies

There are several joint venture companies in the maritime subsector, particularly
in container feeder service, which can be considered successful such as
GEMATRANS and APM-Saigon Shipping.

1) GEMATRANS (Asia) Co., Ltd. is a joint venture between VINALINES and

Compagnie General Maritime (CGM – France) and established in 1989. It is
owned 51% by VINALINES and 49% by CMG. The line is now operating 11
container vessels with a total capacity of around 4,000 TEU. With the expansion
of their feeder network to cover major ports in southeast Asia, it is estimated that
their current share in the total container carriage is around 30%.

2) APM-Saigon Shipping is a joint venture between Saigon Shipping and AP

Moller (Danish). Its feeder service operation started in 1997, with Saigon
Shipping owning 25% of the stocks and APM, 75%. It now operates seven to
11 middle-type container vessels under a chartered contract and runs to/from
Hong Kong, Kaohsiung, Pusan, and Singapore. Its share is estimated at 30%
of total carriage.

Private and other Shipping Operators

It was reported that there are several private ship owners particularly in inland
waterway transportation operating mainly small-sized ships belonging to
transport corporations.

In the north, there is the Northern Waterway Transport Corporation

(NOWATRANCO) located in Hanoi. It comprises six inland waterway and river-
sea transport companies and four inland port operators. NOWATRANCO carries
and handles containers and bulk and bagged cargo, such as coal, stone, sand,
and gravel, on northern river routes.

In the south, the Saigon Waterway Transport Corporation (COVASO) located in

HCM City operates 24 vessels mainly steel barges, with an average of 250-300
DWT with no power and towed by tugboat on Mekong Delta. These barges carry
major commodities such as construction materials, cement and agricultural

I-3-10
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

products. The freight tariff is usually not fixed but negotiated subject to cargo
volume, season and regularity.

Almost all of its barges are old (average is 10 to 15 years) and have low
productivity due to high operating cost and low space utilization. These vessels
usually do not meet their monthly target of 10,000-15,000 tons, managing to use
only 30% of its available space. Their barges sometimes transport foreign cargo
directly from ocean-going ships.

There are also some independent private operators using their own vessels in
foreign and domestic transportation. One of these is the Mekong Shipping
Company which has two cargo vessels (1,232 DWT and 22,140 DWT) that serve
foreign and domestic demand.

Fleet

There were a total of 772 registered vessels in the Vietnam registry as of end of
September 1999. Table 3.2.2 indicates the number of vessels by type and
weight.

Table 3.2.2
Registered Vessel by Type and Weight

Number of Ships by Weight

Type < 200 200- 500- 1,000- 2,000- 5,000- >10,000 Total
DWT 499 999 1,999 4,999 9,999 DWT

General Cargo Boat 117 205 45 46 26 15 8 462

(incl. Reefer)
Container (incl. roro) 2 2
Oil Tanker 19 2 7 11 7 2 48
Passenger & Cargo 42 2 51
Barge 1 24 5 16 1 2 49
Tug & Supply 65 6 7 7 85
Boat
Dredging Boat 1 7 2 1 1 12
1/
Others 30 15 10 3 3 2 63
TOTAL 282 261 74 85 38 20 12 772
Source: Register of Ships; Vietnam Register of Shipping as of September 1998.
1/ Others include fishing boat, pilot boat, floating crane, patrol boat, pontoon, floating dock and
research boat, etc.

State-owned Shipping Fleet

Almost all big cargo vessels and tankers belong to state shipping companies and

I-3-11
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

transport foreign and domestic cargo forwarders. Of these, only 10 vessels are
under five years old, and the rest are over 19 years old.

Besides these figures, the Institute of Shipping, Economics and Logistics (ISL)
merchant fleet database also provided the number of Vietnamese registered
ocean-going vessels as of 1 January 1998, based on a quarterly update by
Lloyd’s Register of Shipping (see Tables 3.2.3 and 3.2.4).

Table 3.2.3
State-owned Shipping Fleet (as of March 1999)

Number of Ship by Weight

Company 3000- 6000- 9000- 12000- 15000- >20000 Total
< 3000
5999 8999 11000 14999 19999 DWT
VOSCO
251,242 DWT 1 7 3 3 4 3 21
1/
VITRANSCHART
145,698 DWT 1 3 1 6 11
VINASHIP
75,377 DWT 2 3 4 2 11
FALCON
80,001 DWT 3 1 1 5
TOTAL 2 7 13 8 4 10 4 48
1/ Including six open-registered vessels of 81,402 DWT.

Table 3.2.4
State-owned Shipping Fleet

Type of Vessel No. of Fleet DWT

Bulk Carrier 10 151,000

General Cargo
Single Deck 225 353,000
Multideck 44 250,000
Oil Tanker 23 66,000

Chemical Tanker 3 2,000

TOTAL 305 822,000

Source: ISL, January 1998

The existing transport capacity of the Vietnamese mercantile ship fleet is shown
in Table 3.2.5.
Table 3.2.5
Transport Shipping Capacity

I-3-12
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

Number of Cargo Ships Total

Owner Type 200- 500- 1000- 2000- 5000-
<200 >10000 ALL DWT %
499 999 1999 4999 9999

Mainly Ocean-going of Foreign Seagoing Ships

State 9 11 8 16 15 21 27 107 676,320 58.9
Joint Venture 1 4 7 1 5 18 255,021 22.2
Subtotal 9 11 9 20 22 22 32 125 931,341
Mainly Coastal Shipping Vessels
Local Government 16 127 12 33 14 3 205 146,761 12.8
Cooperative 1 18 19 4,400 0.4
Private 7 85 20 14 2 128 65,351 5.7
Subtotal 24 230 32 47 16 3 352 216,512
TOTAL 33 241 41 67 38 25 32 477 1147853 100%
Source: VINAMARINE

The number of ships over 10,000 DWT and 2,000 DWT mainly serving foreign
trade accounted for 6.7% (32 vessels) and 20%, respectively. Table 3.2.6 lists
the newly purchased ships built and purchased between 1996 and 1998.

Table 3.2.6
Purchased Ships during 1996-1998

1996 1997 1998

Sector
Ship DWT Ship DWT Ship DWT
Mainly ocean-going
Shipping Total 6 69,007 11 110,643 4 67,799

State 6 69,007 8 98,945 4 67,799

Government
Joint Venture 3 11,698
Mainly Coastal
Shipping Total 13 4,185 15 8,321 3 1,455

Local Government 3 600 4 2,463 2 979

Cooperative 2 400 1 200
Private 8 3,185 10 5,658 1 476
Source: VINAMARINE

The figures above are inclusive of the vessels purchased by VINALINES

between 1996 and 1998.

I-3-13
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

Table 3.2.7
Ownership of Purchased Ships in 1996-1998

No. of
Lines Type of Vessel DWT TEU
Vessel
VINALINES Container 5 50,500 3,128
Roro 1 6,400 290
VOSCO Bulk cargo ship 4 83,858
General cargo 4 25,588
VITRANSCHART General cargo 2 31,472
FALCON Crude oil tanker 1 60,600
Product oil tanker 2 11,240
INLACO SAIGON Product oil tanker 1 1,924
TOTAL 20 271,582 3,418
Source: VINALINES

According to the 1998 annual report of VINALINES in 1998, in 1996-1997 they

invested US$ 82 million to expand their fleet to 220,000 DWT and US$8 million
for 26,000 DWT.

Newly purchased vessels by SOEs dealing mainly in foreign trade are second-
hand vessels built between 1982 and 1989 (mainly in 1983/1985). Despite these
acquisitions and expansion, the present technical condition and structure of the
Vietnamese ocean-going fleet are still not competitive and suitable: Given the
ship’s average life of about 21 years, the technical condition of these purchases
would already be suffering. It is thus an urgent issue for the Vietnamese
maritime subsector to replace and rehabilitate its ocean-going fleet.

Domestic Shipbuilding Industry

The shipbuilding industry in Vietnam is unable to comply with ship owners’

requirement for bigger vessels, primarily due to the lack of expertise in designing
and technical skills. Other specific problems are insufficient supply of steel plates
and the lack of machinery, equipment and capacity to domestically produce the
main engine.

Recently, VINASHIN, a state-owned shipbuilding enterprise, established a joint

venture with Hyundai, a South Korean company, to repair and maintain ships.
This joint venture is also planning to build big-sized vessels in their shipyard in
Khoan Hoa province. But due to the insufficient supply of iron steel plates, this
may not be feasible in the near future. According to the Vietnam Steel
Corporation, their current capacity in producing iron steel plates is at an average
of 300,000 tons per annum. Almost all are for domestic construction and there
seems to be no possibility to supply to shipbuilders.

I-3-14
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

It was also estimated that the quantity of mined crude ore in Vietnam is capable
only of supplying the industry for the next 30 years given the present average
consumption. However, importing iron steel plates for shipbuilding is not practical
due to the stiff competition from shipbuilders in other countries.

An alternative is being offered by a joint venture between an enterprise under the

Vietnamese defense force and its Japanese partners. This company produces the
needed plates, sourcing them from broken down ships and melting them in an electric
furnace. This factory in Ky Ha has a capacity of 300,000 tons of steel plates a year.
Although labor-intensive, it is expected to be managed well in Vietnam.

In the meantime, the industry will have to continue buying used vessels or
building new ships in foreign shipyards, until such time that local production of
iron steel plates for shipbuilding has improved.

3.3 Operation and Management

Shipping Traffic Volumes

Seaborne traffic can be defined as the movement of seaworthy vessels between

ports in accordance with Maritime Code 1990 of Vietnam. Seaborne traffic has
substantially increased from 17.9 million tons in 1991 to 56.9 million tons in 1998,
showing an annual growth rate of 17.8%, parallel with Vietnam’s trade expansion
for the same period (29% annual in current prices). Regarding the relationship
between shipping and trade in Vietnam during the 1990s, the imported value
always exceeded the exported one (e.g., 26% of import surplus in 1998) while
the outgoing shipping volume is always larger than the incoming one in terms of
tonnage (e.g., 20% of outgoing surplus in 1998). It clearly shows the
characteristics of Vietnam’s trade structure in which more agricultural and mining
products are exported and more industrial products are imported.

Throughput amounted to 5.9 million tons in 1998, 40.6% of which was dry cargo,
38.5% liquid cargo, 13.8% container, and 7.1% transit cargo.

The need for containerization is acute in Vietnam. The average growth rate per
year is 34% between 1991 and 1998. The current containerization rate of 14%
(containerized cargo/total cargo) implies that there must be a large room for
1
containerization in line with industrial development. VINAMARINE estimated the
cargo transported by Vietnamese flag vessels in 1998 at 12.8 million tons,
sharing 22.6% of the overall shipping traffic connected with Vietnamese ports.

1
Containerization in overseas shipping in other ASEAN countries: Singapore – 48%, Malaysia – 30%,
Cambodia – 25%, Philippines – 21%, Thailand – 18%, Indonesia – 12%, Myanmar – 11% (Source:
ASEAN)

I-3-15
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

Table 3.3.1
Shipping Traffic Volumes for 1995-1998

Shipment Unit 1995 1996 1997 1998

Cargo Throughout Total 34,000,000 36,656,337 45,760,326 56,899,006
Container TEU 315,134 464,849 760,610 799,665
Export TEU 152,500 225,527 381,399 375,674
Tons 1,200,000 3,222,062 3,079,023
Import TEU 162,634 239,322 372,313 381,817
Tons 1,463,706 3,417,957 4,332,855
Domestic TEU 6,898 42,174
Tons 33,637 468,619
Liquid Cargo Tons 13,180,000 15,510,642 18,126,701 21,889,442
Export Tons 9,778,933 11,785,583
Import Tons 6,329,780 7,925,973
Domestic Tons 2,017,988 2,177,886
Dry Cargo Tons 14,470,000 17,522,766 20,927,308 23,123,193
Export Tons 8,180,911 7,925,222
Import Tons 7,537,763 7,748,009
Domestic Tons 5,208,634 7,449,962
Transit Cargo Tons 2,085,160 3,150,506 4,038,619
Passenger Person 55,981 64,296 47,683
Source: VINAMARINE

Table 3.3.2
Total Throughput and Output by Domestic Ships

Total Throughput Tonnage (1998) % increase from 1997

Export 24,142,049 tons 10.0%
Import 20,772,398 tons 19.0%
Domestic 11,643,553 tons 55.0%
(circulated)
TOTAL 56,558,000 tons 23.6 %
Carried By Domestic Ships Tonnage (1998) % increase from 1997
Overseas 9,440,405 Tons 4.82%
Domestic 3,404,596 Tons 8.07%

TOTAL 12,845,000 tons 10.0%

Source: VINAMARINE

Shipping Management

Through the business activities of VINALINES can be gleaned the features of major
shipping lines in Vietnam. Table 3.3.3 shows VINALINES’ performance in relation
with its yearly total revenue and profit since their organization on 1 January 1996.

I-3-16
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

Based on its report, the annual growth of transport output increased from 16% in
1996 to 25% by the end of 1998, while transport throughput increased 80% from
12.4 million tons (end of 1996) to 15.2 million tons (end of 1998) or a 23%
growth.

Table 3.3.3
VINALINES Income (1996-1998)

Year Unit Revenue Profit Contribution to State Budget

1/ 1/ 1996 VND bil 1,529.9 154.0 125.9
December 1996 - do - 1,759.0 148.7 164.5
December 1997 - do - 2,000.9 175.5 167.8
December 1998 - do - 2,269.3 196.3 175.4
% Increase since 1996 48% 27% 39%

Table 3.3.4 illustrates the annual operation indicator in 1997 as reported by major
lines under VINALINES.

Table 3.3.4
Annual Operation Indicator of Major Shipping Lines

VITRANS-
Indicator in 1997 Unit VINALINES VOSCO FALCON VINASHIP
CHART
Load Factor % 63 91 60.60
Proportion Distance % 78 50 81.11
Capacity of Means VND mil 103,850

Total Transport Revenue VND/T/km 443,038,347 191,894 129,730,343 71,941,159

Average Transport Charge VND 1,000 99,744.20 37.68 29.77 132,539
Total Expenditure Ditto 12,446.80 414,713,243 200,459 123,221,895 71,841,159
Out of which 63.10
Salary and Allowance Ditto 2,040.31 34,801,739 16,616 3,113,522 7,447,987
Social Insurance Ditto 14.05 993,290 596 124,522 506,835
Seaport Fee Ditto 3,341.05 83,624,947 25,708 18,167,658 8,623,421
Fuel Ditto 7,297.82 78,246,234 37,924 17,421,154 21,374,618
Periodic Reparation Ditto 37,555,856 16,070 32,326 2,636,304
Material, Lub-oil, Spare
Ditto 45,846.45 52,847,969 18,752 7,023,651
part
Basic Depreciation Ditto 45.94 74,767,381 28,692 564,748 7,170,103
Management Ditto 2,399.16 18,511,708 6,823 1,057,144 3,698,093
Depreciation of Major
Ditto 9,834 6,996,179
Repair
Charter Ditto 75,863,395
Pocket Money Ditto 1,674,001
L/C Fee & Bank Fee Ditto 9,135.79
Insurance Fee Ditto 11,065.00 15,396,529
Other Expenses Ditto 6,048.21 7,415 6,827.726 18,157,376
Out of which
Ditto 1,537 249,262
Mean Inspection

I-3-17
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

Generally, the proportion of salary and allowance to total expenditure is

comparatively low compared to the allocations of other foreign shipping lines.
Meanwhile, other direct and operating costs, such as seaport fee, fuel oil, periodic
repair, material/lubricant, and other spare parts, comprise the biggest bulk of the
budget. Given the state and age of the vessels, high maintenance and operational
expenses are expected. Thus an old fleet in operation is costlier and less competitive
because expenditures on repair, maintenance and insurance become financial
burdens on individual shipping companies.

Shipping Operation

VINALINES has concentrated its fleet expansion program on container vessels,

resulting in an increase in GEMATRANS’ loading share in intra-Asian container
services.

Other shipping lines under VINALINES operate specific types of vessel. VOSCO
specializes in bulk and specific cargo vessels, VITRANSCHART in general cargo
vessels, and FALCON is a liquid-cargo vessel operator. INLACO Saigon is mainly
a service company providing crew and training and acting as shipping agency to
foreign shipping companies for freight forwarding. This firm is aggressively
expanding its business and now owns vessels for crew training and carriage of oil
products.

According to VINALINES, the funding for fleet expansion by each firm is through
bank loans, with each respective company accountable for the loan. In cases
where huge investments are required, VINALINES serves as co-guarantor, for
example, in the purchase of a 60,000 DWT tanker by FALCON.

During the last three years, VINALINES and its group of companies purchased
20 various types of vessels, all are second-hand vessels built during the period
1982-1989, but mostly in 1983 and 1985. The acquisition of used vessels is
primarily due to financial constraints and partly because of the lack of
shipbuilding capacity in Vietnam.

International Shipping

Though the Vietnamese government intends to boost its loading share of

imported and exported cargoes to about 40% through the national fleet from its
current share of 11%, it is not feasible at present in the face of fierce competition
from foreign carriers. Given the present insufficient capacity of the national fleet
and the less competitive trade terms and volumes, it would be quite difficult to
realize government’s target. Therefore, the critical issue here is the urgent need
to expand and modernize the national fleet.

These days, most of the attractive cargoes are containerized and carried by semi-
container or full container vessels. Currently in Vietnam, container shipments are

I-3-18
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

mainly handled by some state-owned shipping companies and a local government-

controlled company with two nationally registered semi-container vessels and feeder
container vessels, the latter operated by joint-venture companies.

At the initial stage of the establishment of VINALINES in 1996, a container ship

development plan up to year 2000 was developed (see Table 3.3.5). However,
given the changes in the economic situation brought about by the Asian
economic crisis, this initial plan might have been affected. A review of possible
expansion plans is thus required.

Table 3.3.5
Development Plan for VINALINES Container Ship (1996-2000)

Year 1996 1997 1998 1999 2000

Percentage of Cargo Transport 15% 15% 20% 25% 30%
Transported Volume (TEU) 97,500 127,500 210,000 312,000 450,000
Average Productivity (TEU/year) 35 35 37 37 37
Total Tonnage Needed (TEU) 2,785 3,643 5,675 8,432 12,200
Present Total Tonnage (TEU) 800 2,435 3,195 5,675 8,430
Additional Tonnage to be Produced 1,985 1,210 2,480 2,757 3,770
No. of Ship to be Procured 2X600 2X600 4X600 3X850 1X850
Tonnage 2X350 1X350 1X3000
No. of Empty Containers to be Produced to Assure
Smooth Operation (20-30% of the circulation) (TEU) 2,000 2,000 3,000 4,000 5,000
TOTAL INVESTMENT CAPITAL (US$ MILLION) 39 29 85 88 92

VINALINES reported that in 1996 and 1997, investment was made on 220,000
DWT vessels at a total capital of US$ 82 million. In 1998, however, VINALINES
has only invested an additional 26,000 DWT, fulfilling only 26% of its projected
plan which indicates an investment capital of a little more than US$ 8 million.

VINALINES established a joint-venture company with a foreign counterpart for

the carriage of feeder containers and they have been successful so far. But the
expansion plan of owned vessels has not satisfactorily proceeded yet.

In accordance with government and MOT policy, all concerned agencies are
requested to establish a common investment plan to expand nationwide capacity
of container and bulk cargo vessels as well as oil tanker.

Domestic Shipping

With regard to coastal shipping and inland waterway transport, the JICA Study Team
reported about the prevailing circumstances and problems to be addressed. The
team cited in particular the approach to forecasting coastal shipping which should rely
on a synthesis of macro-economic development scenario and individual development
plans concerning land use and industrialization.

I-3-19
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

The JICA study recommends the adoption of short-term priority projects, which shall
address issues such as maritime safety, ATN and allocation of liner services in the
north-south domestic-cargo traffic route. On this route, there are regular demands for
shipment of coal, cement and other mining products in bag or bulk. The return leg
mainly carries agricultural products and other general cargoes.

In relation to the economic growth of and the growing regional industrial zones in the
north, center and south of Vietnam, cargo volumes in the near future will exceed the
available traffic capacity of other modes such as rail and truck. This being the case,
the establishment of an adequate service channel from the northern to the southern
main corridor should be closely linked with cargo and passenger demand. Allocation
of liner services to this route will increase traffic demand in coastal shipping.

TRANSVINA, a joint venture company between VINALINES and Japanese

partners, started a scheduled liner container services in 1998. Two vessels,
named m/v E Linh and m/v An Xuan (8,384 GRT, service speed of 14.50 kts,
built in 1983, owned by VINALINES), provide regular container services.
TRANSVINA also utilizes feeder vessels, with a space charter contract with its
associated companies, to carry domestic cargoes.

VINALINES has dominated the market for domestic transport of container. With
the recent launch of TRANSVINA, both companies will still be able to maintain a
lion’s share in the domestic market for container transport services. In any event,
the increase in the supply of available space in the main traffic route would
provide better transport conditions to shippers and complement the expected
increase in demand as the coastal shipping industry progresses.

Container Operation

Major container transportation are provided by feeder vessels being operated by

foreign and joint-venture shipping companies mainly from/to Singapore, Hong
Kong, Kaohsiung, and Bangkok.

Two joint ventures, GEMATRANS and APM-Saigon Shipping, are presently

enjoying a dominant share (about 60%) among various feeder service operators in
Vietnam, such as Wan Hai and Unigroly (Taiwan), Strait Shipping and APL-NOL
(Singapore), and RCL (Thailand), in the carriage of feeder containers. Many
foreign shipping companies serving international routes have also availed
themselves of the feeder vessel services provided by these operators.

According to VINAMARINE’s annual report, there was a 20.57% increase in total

throughput of container at ports in 1998, broken down as follows:
Export 376,790 TEU (3,139,545 tons)
Import 373,429 TEU (4,439,442 tons)
Domestic and transit 40,827 TEU (467,143 tons)
TOTAL 791,046 TEU (8,064,130 tons)

I-3-20
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

The share of Vietnamese ships in the total cargo movement in 1998 was 57%
(454,000 TEU or 4,040,432 tons), or a 15% increase in volume compared to
1997. Container cargo flow in Vietnam can be attributed by area: 70%, 20-22%
and 8-10% are being handled in southern, northern and central Vietnam,
respectively.

The charge table for cargo handling in Vietnam is exclusively being decided and
controlled by the Government Price Committee (GPC). Thus, all ports are
covered with a single tariff provided under Decision No. 127/VGCP-CNTD.DV
issued on 28 October 1997 and enforced since 1 January 1998. As to the
charges for container handling, the respective tariff rates in the regions are being
applied, as illustrated in Table 3.3.6.

Several container ports are operating in Vietnam, as follows:

1) Vietnam International Container Terminal (VICT)

This is a privately owned container terminal that began operation in November

1998 in HCMC, the major container-handling port in the south. This terminal is
equipped with an automated transport and handling system and modern crane
facilities and can provide an efficient mechanical operation similar to other
dominant hub container ports like Singapore and Hong Kong.

For the initial year, VICT targeted container handling at approximately

170,000 TEU. However, there were only two shipping companies, NOL and
Wang Hai, which regularly availed of its services. Moreover, traffic congestion
in HCMC restricted inland container movement making it doubly difficult for
VICT to attain its initial target.

2) New Saigon Port

This port is enjoying the lion’s share with 75% total cargo handling in Saigon.
It is a commercially operating terminal located at Binh Thanh district in HCMC
and is owned and operated by the defense force. It has a very accessible
location, making it the primary choice for shipping companies for the
transport and release of their cargoes.

The company’s reported container cargo throughput and forecast are as

follows:

1996 351,832 TEU (100 %)

1997 403,437 TEU (114.7%)
1998 413,469 TEU (117.5%)
1999 430,000 TEU (122.2%)
2000 500,000 TEU (142.1%)

I-3-21
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

Table 3.3.6
Container Handling Charges
(unit: US$/container)
Ship hold-Wagon-Truck- Ship hold-Barge- Warehouse-Wagon-Truck
No. Handling Operation
Barge or Vice versa Warehouse or Vice Versa or Vice Versa
Type of Container/Region R1 R2 R3 R1 R2 R3 R1 R2 R3
1 ≤ 20 feet
With Cargo 37 26 30 57 50 57 23 20 23
Without Cargo 24 16 20 37 30 37 15 12 15
2 40 feet
With Cargo 55 40 45 85 76 85 35 31 35
Without Cargo 36 23 29 55 44 55 23 18 23
3 40 feet and above
With Cargo 82 59 67 127 113 127 53 47 53
Without Cargo 53 35 44 83 66 83 34 28 34
Notes:
1. Region 1 (R1): Seaports lying in region from latitude 20 to the North
Region 2 (R2): Seaports lying in region form latitude 11.5 to latitude 20
Region 3 (R3): Seaports lying in region from latitude 11.5 to the South
2. Handling container from warehouse and yard into the wagon (or vice versa) transported by truck: 100%
increase in unit of warehouse-wagon and truck.
3. Handling container in the same cargo hold is accounted 25% of unit of ship in hold-warehouse and yard
or vice versa.
4. Handling container from this cargo hold into another hold (but in the same vessel) is accounted 55% of
unit of ship in hold-warehouse and yard or vice versa.
5. Handling container and transferring into the same vessel (unloading from vessel, taking on land and
loading into the same vessel) is accounted 100% of unit of ship hold-warehouse and yard or vice versa.
6. Handling container and transferring into other vessel (unloading from vessel, taking on land and loading into
another vessel) is accounted 150% of unit of ship hold-warehouse and yard or in vice versa, from which:
Unloading form vessel, then taking into warehouse: 75% of unit mentioned above.
Unloading from warehouse, then loading onto vessel: 75% of unit mentioned above.
(Other exceptional handling charge quotations are omitted)

However, due to some limitations (e.g., no modern gantry crane, limited

space in the container yard due to high volume of import/export, domestic
and military cargoes, etc.), New Saigon Port has extended its services in
receiving and delivering containers at two inland container depots (ICDs)
located close to the port, Van Phong ICD Nos. 1 & 2, which have an area of
105,000 sq m for two container depots and 82,000 sq m for four container
depots, respectively. They are directly connected to National Road No. 1A.
The container directly discharges barges from feeder vessels for forwarding
to the ICDs.

Moreover, the company intends to transform this port into a terminal that will
offer modern and specialized container-handling facilities and to invest on its
new port at Cai Lai. With these investments, the company expects an annual
handling capacity of 800,000 TEU at each port.

3) Hai Phong Port

I-3-22
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

The port of Hai Phong handles about 20% of total container transport in
Vietnam. However, port equipment for cargo operation at this conventional
port do not allow for a smooth container operation.

In the central area of Hai Phong port, there are two berths available for
container operation out of the total 14 berths. However, shore cranes can
only carry five to 16 tons. At Chua Ve berth, which has a 300 m LOA and 7.0
m depth, shore cranes can accommodate as much as 10 to 40 tons, making
it more suitable for container operation.

Given these port capacities, usual container operations are being handled
mainly by the vessel’s cargo gears, which, however, result in inefficient
operation and slow dispatch of vessels. Rehabilitation of cargo handling
equipment is therefore a major issue not only for container operation but also
for conventional cargo operation. One of the Vietnamese leading shipping
companies with a registered homeport in Hai Phong, reported that in 1998
alone the company suffered from demurrage (costs for extra stay) of 1,122
days from the operation of their 21 general cargo vessels. This is mainly
caused by waiting for high tide and their turn for cargo loading/unloading.
Rehabilitation of port facilities and dredging of river channels are therefore
other key aspects that need to be improved for better port and shipping
operations.

Operational Efficiency

Vietnamese seagoing vessels and coastal shipping vessels are generally

comprised of old (average of 21 years) and small-size vessels, except for some
specialized cargo vessels. Major ports in Vietnam are still not well equipped with
cargo-handling machines, such as gantry or shore crane on wharves, and some
are too obsolete to be used.

Thus, shipping vessels are often forced to operate cargo from berth or anchor
using obsolete cargo gears for cargo loading and discharging, to and from
wharves or floating barges alongside their ships. This system is neither efficient
nor quick and prolongs the vessels’ stay at the port. The situation is different,
however, at HCMC’s Tan Can Port which has a substantial number of containers.
Here, cargoes are unloaded directly to barges and forwarded to the ICD. The
problem though is that the ship’s responsibility for cargoes cover only up to their
delivery to the ICD.

Another problem affecting shipping operations is the insufficient water depth of

the access channel to the main ports, particularly in the north. Vessels have to
wait for high tide before they can approach or depart from the port, further
decreasing the ship’s productivity. One of the leading state-owned shipping
companies reported that in 1998, they suffered from demurrage at an average of

I-3-23
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

55 days from the operation of their 20 vessels. This is mainly due to the waiting
time for high tide and their turn for cargo operation.

The VICT in Saigon, which offers a more efficient container operation, is

regularly serving four feeder service companies only, all of which are its
investment partners. Given the legal restrictions to container haulage operation in
the urban area, other shipping lines do not utilize this more efficient port for cargo
operation despite its proximity to the Saigon city zone.

Management Efficiency

One state-owned shipping company, the FALCON, specializes in the transport of

liquid cargoes such as crude oil and other oil products. In 1998, this company
has acquired a large oil tanker built in 1986 with a capacity of 60,600 DWT,
aiming to transport 60,000 tons of crude oil from Vietnam to Japan. However,
due to a depression in the market price of crude oil, the Japanese contractor
insisted on an increase in capacity to 80,000 tons. FALCON lost its original
consignment and had to seek for another contract.

Specialized cargo vessels, such as oil tankers and bulk carriers, are used to carry
out serve a long-term contract between cargo supplier/shipper and trader/buyer.
Generally in this case, basic trade terms, such as freight on board (FOB) term and
a nomination right to shipping line, are fully handled by the trader/buyer. Since
there are only occasional offers for chartering vessels to transport specific
consignments, it would be cost-effective to first conduct a study on the feasibility of
investing on this operation prior to the acquisition of vessels. It may be more
appropriate to charter vessels given the present unstable conditions in the market.

Financial Viability

Investments in shipping fleet expansion by state-owned companies under

VINALINES are shouldered by each company without government subsidy.
Shipping companies usually apply for bank loans from the Investment
Development Bank.

Although VINALINES is authorized to administer the finances of its subsidiary

companies, financial arrangements are generally attended to by each individual
company, except in cases of large acquisition such as the case of FALCON.
VINAMARINE, on the other hand, has its own investments for expansion, thus, it
cannot anymore extend assistance to its subsidiaries.

I-3-24
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

3.4 Safety Enhancement and Environmental Protection

Maritime Accidents

A total of 615 accidents have been recorded during the nine-year period between
1987 and 1995.Of the total, 25% were due to collision, 17% to engine trouble,
9% to capsizing, etc. and 17% involved loss of lives and injuries. Operational
errors and technical deficiencies are the main causes of accidents. The number
of recorded accidents has been increasing year by year, especially between
1993 and 1995. Considering that many accidents occur during stormy weather
and within 12 mile of the coast, consideration should be given to the
establishment of improved vessel traffic systems and regulations, weather
forecasting services and effective communication systems, especially in heavily
trafficked areas.

Substandard Vietnamese Vessels

During the period 1996-1998, 59 Vietnamese flag vessels were detained at

various foreign ports as a result of strict port state control.

Through the recently published detention information, the required

standardization for ship management and operation in Vietnam can be
discerned. For example, a three-year detention percentage for Vietnamese flag
vessels between 1996 and 1998 was recorded at 35.12%. It was the highest rate
among the flags while the average detention rate was 6.49%.

Thus, it is recommended that Vietnamese flag fleet should improve its equipment
and maintenance condition, management tactics and crew competence, in
accordance with the requirements provided for in international maritime
conventions.

Table 3.4.1
Number of PSC Actions on Vietnamese Flag Vessels, 1996 –1998

Number of Inspections Number of Detentions 3-Year Rolling

Flag Average
1996 1997 1998 Total 1996 1997 1998 Total
Detention (%)
Vietnam 51 55 62 168 28 22 9 59 35.12

I-3-25
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

Table 3.4.2
Countries with Higher Detention Rates than the Regional Average

3-year Rolling Excess of

Number of Number of Detention
Average Detention Average Detention
No Flag Inspection Detention Percentage
Percentage Percentage
1996-1998 1996-1998 1996-1998
1996-1998 1996-1998
1 Vietnam 168 59 35.12 6.49 28.63
2 Cambodia 196 44 22.45 6.49 15.96
3 Korea, Dem. People’s 120 25 20.83 6.49 14.34
4 Belize 1,064 218 20.49 6.49 14.00
5 Indonesia 282 45 15.96 6.49 9.47
6 Saint Vincent and the 1,035 151 14.59 6.49 8.10
Grenadines
7 Ukraine 64 9 14.06 6.49 7.59
8 Turkey 237 31 13.08 6.49 6.59
9 Egypt 77 9 11.69 6.49 5.20
10 Honduras 1,125 129 11.47 6.49 4.98
11 Malta 720 78 10.83 6.49 4.34
12 Thailand 444 46 10.36 6.49 3.87
13 China, People’s Rep. 2,142 213 9.94 6.49 3.45
14 Cyprus 1,545 119 7.70 6.49 1.21
15 France 80 6 7.50 6.49 1.01
16 Malaysia 708 53 7.49 6.49 1.00
17 Taiwan, China 530 38 7.17 6.49 0.68
18 India 362 25 6.91 6.49 0.42
19 Korea, Republic of 1,248 84 6.73 6.49 0.24
Source: Tokyo MOU

Table 3.4.3
Detention Cases of Vietnamese Vessels

Year Owner/ Place of Date of Date of

Ship Name Ship Type Nature of Deficiencies
Built Operator Detention Detention Release
Ha Long 15 1979 General Ha Long Osaka, 5/10/98 8/10/98 Lack of stable information chart and
cargo ship Fiscom Japan nautical publication, EPIRB and its
launching arrangement, hidden
cargo, life-saving devices.
Nah Rong 1958 Bulk Nha Rong Hainan, 1/12/98 6/12/98 Fire pumps do not start; minimum
09 carrier Transportation China manning certificate not on board;
auxiliary engine not working.
VINH 1982 General Nghe An Newcastle, 16/3/99 18/3/99 Broken lifeboats; fixed fire
cargo ship Ocean Australia extinguishing system in cargo
Shipping spaces not provided
Ha Tinh 06 1982 General Ha Tinh Hong Kong 8/4/99 9/4/99 Lack of life-saving devices; too low
cargo ship Shipping load lines (overloading); marine
pollution

I-3-26
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

Box 3.4.1
Port State Control

Port State Control is a new practice authorizing port authorities to inspect foreign
vessels in anchor. Port authorities assign PSC officers and participate in a regional
MOU to combat substandard ships. Vessels holding necessary certificates issued by
international class societies can enter and anchor at any public port. For those
without such certificates, PSC officers give one of two judgments:

Detention: In case a ship’s condition, equipment and crew do not substantially

conform with the standards, and such deficiency would present danger to the ship,
persons on board or marine environment, the ship would be detained and its operator
ordered to correct the situation before it is allowed to sail.

Deficiencies: Incase a ship’s condition, equipment and crew do not substantially

conform with the standards, and such deficiency would present danger to the ship,
PSC officers would request the shipmaster to rectify the deficiencies at the next port
of call and to notify that port’s Authority about the situation.

Recent Undertakings

Since all the aspects of shipping affect maritime safety, it is inevitable to develop
an integrated system that consists of:
1) Infrastructure: ports, navigational channels
2) Fleet control: ship registration and periodic inspection
3) Human resource development: education of seafarers and maritime safety
personnel
4) Navigational aids: lighthouses, vessel traffic services (VTS), pilotage services
5) Sea communications: ship reporting system, distress signals
6) SAR operation

During the 1990s Vietnam made concerted efforts to tackle the above issues, as
follows:

Accession to International Conventions: Vietnam acceded to some IMO and ILO

conventions in the early 1990s (refer to Table 3.4.4).

Participation in the Tokyo MOU: Vietnam signed the MOU on port state control in
the Asia-Pacific region in 1998 and has been a member since January 1999.
There are 25 PSC inspectors in Vietnam, carrying out daily ship inspection in
accordance with international conventions.

ATN Development: With the assistance of the Spanish government, 16

lighthouses will either be rehabilitated or built. It is considered an initial effort
since the JICA Coastal Shipping Study concludes that Vietnamese territorial
waters need 97 lighthouses by the year 2010.

I-3-27
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

Box 3.4.2
ISM-Code

It is a new practice to enhance maritime safety from a navigational management

viewpoint. Conventional ways focus on hardware such as seaworthiness, training
equipment, lighthouses, etc. But most of maritime accidents occur due to human
errors. The ISM (International Safety Management)-Code aims at minimizing
human errors by improving navigational management.

Shipping operators or companies that manage ship under contract are regarded as
obligatory bodies. The ISM-Code stipulates the following obligations:

1) Preparation of the SMS (Safety Management System)

2) Selection of a responsible land officer to the ship
3) Preparation and keeping a safe navigation manual in the ship
4) Enforcement of the SMS by a captain and its reporting to the obligatory body

To ensure the effectiveness of the ISM-Code, a flag country conducts inspection

and, if favorable, issues an SMC (Safety Management Certificate), while a port
country conducts port state control (refer to Figure 3.4.1). The ISM-Code has been
introduced globally since 1 July 1998. To practically operate the ISM-Code, flag
countries are required to respect relevant guidelines the IMO made. Some
countries also need to modify their domestic legal system.

Figure 3.4.1
Concept of ISM-Code

Other Participating
Flag Country Request Countries in SOLAS
Conventions
after Inspection
after Inspection

Issue of DOC
Issue of SMC

Issue of DOC
Application after Inspection

Company

Ship Management

Operation of Safety
Country
Port
PSC by
Conduct of

Management
S t

Port Country

I-3-28
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

Table 3.4.4
Accession Status of ASEAN Member Countries to Maritime Conventions
1/
No. Status of Convention Brunei Indonesia Laos Malaysia Myanmar Philippines Singapore Thailand Vietnam
1. International Convention for the Safety of Life at
1987 1981 - 1984 1987 1982 1981 1985 1991
Sea, 1974 (SOLAS 1974)
2. Convention on the International Regulations for
Preventing Collisions at Sea, 1972 (COLREG 1987 1979 - 1980 1987 - 1977 1979 1990
1972)
3. Protocol of 1978 relating to the International
Convention for the Prevention of Pollution from 1987 1987 - 1997 1988 - 1991 - 1991
Ships, 1973 (MARPOL PROT 1978)
4. International Convention on Road Line 1966 (LL
1987 1977 - 1971 1987 1969 1971 1993 1991
1966)
5. International Convention on Civil Liability for Oil
1992 1978 - 1995 - - 1981 - -
Pollution Damage, 1969 (CLC 1969)
6. International Convention on the Establishment
of and International Fund for Compensation for 1992 1978 - 1995 - - - - -
Oil Pollution Damage, 1971 (FUND 1971)
I-3-29

7. International Convention on Standards of

Training, Certification and Watchkeeping for 1987 1987 - 1992 1988 1984 1988 1997 1991
Seafarers, 19778 (STCW 1978)
8. Convention on the Prevention of Marine
Pollution by Dumping of Wastes and Other - - - - - 1975 - - -

Vietnam National Transport Strategy Study (VITRANSS)

Matter, 1972 (LC 1972)
9. Convention on Facilitation of International
- - - - - - 1967 1992 -
Maritime Traffic, 1965
10. International Convention on Tonnage
1987 1989 - 1984 1988 1982 1985 1996 1991
Measurement of Ships, 1969
11. International Convention for Safe Containers
- 1990 - - - - - - -
(CSC) 1972

Technical Report No.8

12. International Convention on Oil Pollution
Preparedness, Response and Cooperation, - - - 1997 - - - - -
1990

Shipping and Ports

13. International Labour Organization 147 - - - - - - - - -
14. International Convention on Maritime Search
- - - - - - 1997 - -
and Rescue, 1979
st
Source: The 1 WG on Maritime Safety and Pollution in ASEAN (September 1997) 1/ Non-IMO Member

I-3-29
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

Search and Rescue: In January 1997 the National SAR Committee was
established with four subcommittees, including maritime SAR. However there is
no SAR fleet available and Vietnam has not acceded to the maritime SAR
convention in 1979.

Sea Communication: Under the SOLAS (Safety on Land and Sea) convention,
IMO has introduced the GMDSS since February 1999. The JBIC financed
VINAMARINE and its subsidiary, Vietnam Ship Electronic Communications
Company (VISHIPEL) to install GMDSS communication facilities.

Seafarers’ Education: The Center for Training and Improving Maritime

Professions (VINIC) provides state-of-the-art education with course syllabus
incorporating STCW-78/95 requirements in offshore drilling operations at the
VIMARU with assistance of the Nippon Steel Shipping Co., Ltd. (Japan).
However, VINIC is too small to educate or reeducate all Vietnamese seafarers,
(there is nearly 20,000 registered seafarers) and students in various maritime
schools.

Oil Spill Prevention: Vietnam acceded to MARPOL 1978 in 1991. However only
Petro Vietnam has the necessary equipment against oil slick such as oil fence,
boom and fire-fighting equipment. For example, the Study Team checked that
the Hai Phong Port Authority does not have any equipment despite three
medium-size oil tanker berths.

Box 3.4.3
STCW-78/95

The STCW-78 Convention (Standards for Training, Certification and Watch-

keeping) is the principal treat worldwide. The 1995 amendments stipulate that all
seafarers working on board the ships must have the following certificates or
specialized raining and qualification:

1) Radar simulation (for shipmaster and navigation officers)

2) Tanker safety familiarization (for officers and ratings involved with tanker
operations)
3) First aid and medical care (for designated officers and ratings)
4) Fire fighting/advanced fire fighting (for designated officers and ratings)
5) Personal survival and life saving (for all officers and ratings)
6) Ability to solve engine malfunction

The enforcement Schedule of STCW-95 is as follows:

1) 1 February 1997: The 1995 amendments were enforced.
2) From 1 August 1999: New training is required to adhere to the new
standards.
3) 1 February 2002: All other transitory provisions will cease.

I-3-30
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

Figure 3.4.2
Vietnam SAR Organizational Chart

National SAR Committee

VM VM Airlines VN Maritime VN Fishery

Petroleum SAR SAR SAR
Standing Standing Coordination Standing
Committee Committee Center Office

Regional SAR Centers

No. 1 Hai Phong
No. 2 Danang
No. 3 Vung Tau

I-3-31
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

4 DISCUSSIONS ON SELECTED ISSUES

4.1 Governmental Policies on the Shipping Industry in Asia

These are references on Asian governments’ measures to promote shipping in

their respective countries. Also summarized and attached are study reports
prepared by Japan’s Maritime International Cooperation Center (MICC) in 1998
and 1999 and by the Economic and Social Commission for Asia and the Pacific
(ESCAP) in 1997-1998.

4.1.1 Governments’ Development Policy on the Shipping Industry

Many developing countries in Asia are supportive of their respective shipping

industry, in particular by issuing policies that promote it. According to the MICC
report which studied the countries of Indonesia, Malaysia, Thailand, and Taiwan
in 1998, their governments are implementing the following measures:

1) Exemption from corporate tax: Shipping industries in Malaysia, Thailand and

Taiwan are exempted from paying corporate tax. It was also reported that the
Indonesian government might adopt a similar measure.

2) Payment of subsidies: In Malaysia, Thailand and Taiwan, there are subsidies

to the shipping industry, though no details were provided. As for Indonesia,
there is no subsidy except in the case of Pioneer Shipping (37 ships, 22,600
DWT) which serves domestic transport demand in the country’s remote
eastern islands. It received Rp 29 billion in 1997-1998.

3) Cargo reservation: Some countries have been holding a cargo reservation

right to promote the local shipping industry. In Indonesia, there existed cargo
reservation laws on trade and shipping. Under the Cargo Reservation Law on
Trade, some specific commodities controlled by State enterprises were
transported by national flag vessels, as follows:

Cement : PT Panja Niaga

Flour, Rice, Soya beans : Bulog
Steel : Krakatau Steel
Government projects : State forwarders and private
forwarder nominated by government

The Cargo Reservation Law on Shipping stipulated that cargo shipments for
government projects be carried by liner vessels of conference members or
Indonesian flag vessels. The cargo reservation policy is now suspended after
a policy dialogue with the International Monetary Fund (IMF).

In Malaysia, although the restriction on local cargo/ship was abolished, there

remains an incentive allowing shippers to double the freight amount

I-4-1
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

transported by national ships and declare this as expenditures which can be

deducted from their fiscal income (Income Tax Rules 1995).

4) Ship depreciation: In Indonesia, the following ship depreciation rule under the
1994 income tax law is applied:

Ship Tonnage (DWT) Class Depreciation %

Less than 100 1 4 years 50
Up to 100 2 8 years 25
100-1,000 3 16 years 12.5
Over 1,000 4 20 years 10

The depreciation term on second-hand vessels is applied using the original

owner’s selected term.

In Malaysia, there are provisions for vessel depreciation and accelerated

depreciation is allowed. Details will be mentioned in the ESCAP report.

In Taiwan, there is no specific policy supporting its shipping industry except

for an exemption from corporate tax. Perhaps, it prefers to follow APEC
maritime initiatives and the Asian shipping forum, supporting a freer and
more fair competition in the shipping industry.

4.1.2 Fiscal Measures in Malaysia

1) Bank Industri: Bank Industri is the first bank in Malaysia to go into the
shipping industry. Until now, their main business is still the financing of ships,
shipyards and marine-related activities. Government, through the Five-year
Malaysian Plan, allocates funds to Bank Industri. Those wanting to apply for
loans for shipbuilding should purchase the vessel from the local shipyard. If
local yards were incapable of building the required vessel, then foreign
purchase would be allowed.

2) Shipping Fund: The Shipping Fund established by government is intended for

eligible local shipping companies who wish to expand and increase their
carrying capacity to meet the growth of export following the rapid pace of
industrialization (Prime Minister’s Speech, 1995).

The two main components of this fund are the Ship Finance Facility (SFF)
and the Shipping Venture Facility (SVF). Initially, when this fund was
established, government, through Bank Nagra, provided a sum of RM 800
million. Bank Nagra then chose Bank Industri as the managing authority of
this fund. Of the government allocation, RM 300 million was set aside for the
acquisition of new and second-hand vessels under the SFF program. The RM
500 million balance was intended for the SVF program (EPU: 1993). Under

I-4-2
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

the SVF program, the Central Bank of Malaysia utilized RM 300 million to set
up a shipping company named Global Maritime Venture Berhad (GMVB) on
March 1994 (NST: September 1994).

Government increased the fund to RM 1.1 billion in 1994. From this amount,
RM 600 million was set aside for the SFF program. Its coverage was
extended to include not only the purchase of new and second-hand vessels,
but also for the construction of facilities to build and repair ships. The
remaining RM 500 million was allocated to the SVF program.

Bank Industri contributed RM 200 million, and other financial institutions were
to cough up the remaining RM 300 million (NST: December 1994). Bank
Industri, as the managing authority for the SFF program, disbursed the fund
for the purchase and building of vessels plying domestic and international
routes and the shipyard facility.

The total financing given to domestic shipping was RM 165 million, to

international shipping, RM 235 million and financing for the shipyard, RM
117.2 million. As of March 1997, the SFF program had a balance of RM 82.2
million(Bank Industri: 1997).

3) Other incentives: In addition to the above-mentioned measures, there are

also a number of incentives provided to the Malaysian shipping industry. For
one, income is tax-free and import duty exemptions are also provided. For
instance, a 30% import duty is imposed on Malaysian vessels which are less
than 26 GRT, a 10% duty on vessels between 26 GRT to 4,000 GRT and
vessels above 4,000 GRT are exempted from import duties.

Provisions are also made for vessel depreciation, whereby accelerated

depreciation of ships is allowed with a first year capital allowance of 20% and
a further special allowance of 6-10%. The Malaysian government also
provides income tax exemptions to the ship’s crew.

4.1.3 Fiscal Measures in the Philippines

1) Domestic Shipping Modernization Program (DSMP)

DSMP is a policy-based lending program of the Philippine government with

the Development Bank of the Philippines (DBP) as executing agency and
JBIC as funding agency. It aims to provide financial assistance to enterprises
engaged in domestic shipping and shipping-related industries. JBIC has so
th
far funded Y 15 billion for phase I under the 19 Yen Loan Package (1995-)
nd
and Y 20 billion for phase II under the 22 Yen Loan Package (1999-).
DSMP I was to a large extent concentrated on bringing in appropriate
shipping technology to address the urgent upgrading of the domestic fleet.
Under DSMP II, however, the focus of the program is developmental. DSMP

I-4-3
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

II projects are designed to provide more cost-effective maritime transport

systems to enhance the competitiveness of Philippine products in national
and international markets. Further, DSMP II aims to contribute to a
sustainable socio-economic development particularly in the countryside
through increasing the area’s productivity, improving the people’s standard of
living and supporting government’s food security program.

Until the end of 1998, DBP approved 103 vessels, one container handling
equipment, one shipyard and three port terminal facilities. The vessels, 9.3
years old on average, lowered the overall age of the fleet to some extent. The
financed vessels are divided into the following types:

• 28 Passenger ferries / high-speed craft P 502.8 M

• 17 Passenger cargo vessels P 830.2 M
• 22 Tankers / LPG / tanker barges P 793.3 M
• 17 Lighters / self-propelled barges P 231.0 M
• 17 General cargo vessels P 339.7 M
• 2 Fish carriers P 90.0 M

2) Republic Act No. 7471

Unless covered by the Philippine Overseas Shipping Development Act or RA

7471 (exemption from income tax), the following rates of corporate income
tax are provided for under the Tax Reform Act of 1997 (R.A. 8424):

Upon effectivity of the Act 35 %

As of January 1, 1998 34 %
As of January 1, 1999 33 %
As of January 1, 2000 32 %

RA 7471 provides for tax-free importation of vessels and spare parts for the
repair/overhaul of vessels engaged in overseas traffic. It also provided for
income tax exemption on income derived from Philippine overseas shipping
for a period of 10 years from the date of approval of the law (05 May 1992 to
05 May 2002). The exemption is applicable only if 90% of a company’s net
income is reinvested on the construction, purchase or acquisition and/or the
modernization or improvement of vessels and related equipment. A further
condition is that said investment is not withdrawn for a period of 10 years
after the period of income tax exemption expires.

I-4-4
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

Figure 4.3.1
Overall Framework of the DSMP
Japan Bank for International
Cooperation (JBIC)

DSMP Phase 
Y15 Billion (TTA Y160MM)
Interest Rate 3.00 %

DSMP Phase


Y20 Billion (TTA Y470MM)
Interest Rate 2.70 % (Loan)
0.75 % (TTA )

1 % Guarantee Fee
4 % FX Reserve
Cover Fee (DSMP I)

6 % FX Reserve
Cover Fee (DSMPII)

Participating Financial Development Bank

Institutions (PFIs) of the Philippines (DBP)

WHOLESALE LENDING RETAIL LENDING

EQUITY INVESTMENT
LEASE-PURCHASE
BOND ISSUE

END USER
INTEREST RATE TO END USER
(Maritime Enterprises)
Phase I
♦ Domestic Shipping
♦ WAIR – 2 % but not less than 12 %
♦ Shipbuilding and Repair
Fixed
♦ Port Facility Excluding Construction
♦ WAIR – 2 % but not less than 12 %
of Wharf
Variable (for OIP)
♦ Developmental Projects in Rural
Phase II
Areas
♦ Construction or Rehabilitation of ♦ 14 % for Developmental Projects
Wharf ♦ 16 % for Other Projects
♦ Maritime Education and Training
Institutes

3) Investment Priorities Plan

Under the Omnibus Investment Code of 1987 (Presidential Decree No, 266),
capital equipment is imposed a 10% import duty and a 10% value-added tax
(Expanded VAT Law – Republic Act No. 7716).

I-4-5
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

Since 1987, however, the shipping industry has been exempted from import
duties and VAT through its inclusion in the IPP, which is issued annually.
Under the 1998 IPP, the interisland shipping industry was included again
(with modernization program) and as a priority investment area, covering
purely cargo or passenger and passenger-cargo vessel operations. For
accredited shipping companies, this means the imposition of a 3% import
duty instead of the regular 20% on imported capital equipment and its
accompanying spare parts.

Accredited/registered firms are also exempt from paying income taxes from
3-6 years, depending on the status of the project. But both international and
domestic shipping companies have to pay 10% VAT on their gross receipts.

4) Tax on seafarers

The Tax Reform Act of 1997, Section 24-(A) (1) (a), considers only as taxable
the income derived by Philippine seafarers within the country. Philippine
seafarers who receive compensation for services rendered abroad as
crewmembers of a vessel engaged exclusively in international trade are
exempt from paying individual income tax.

4.1.4 Japanese Experience on Joint Vessel Ownership

Of the various governmental assistance given to the shipping industry in Japan,

the most noteworthy is the assistance provided through the Corporation for
Advanced Transport and Technology (CATT), formerly known as the Maritime
Credit Corporation. The basic objective of the CATT is centered on the
“contribution to the provision of adequate and smooth shipping and port
transport”. Although the statement is simple and abstract, it aims to promote
social stability and economic growth.

CATT Profile and Scale

Established : June 1959 as the Maritime Credit Corporation and changed to

the Corporation for Advanced Transport and Technology in
October 1997
Capital : Yen 14.9 billion (as of 31March 1999, government-financed)
Staff : 132
Operational budget: Yen 1,245.5 billion (for 1997 fiscal year)
Operating capital : Procured through government loans and privately accepted
bonds

To meet its objective, the CATT has two conditions:

1) Its assistance will be limited to domestic operators who find it difficult
obtaining adequate financing, at the same time can their project’s assure
financial viability, and

I-4-6
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

2) Its assistance covers two major areas, investment (joint vessel ownership
project) and finance (financing project).
The CATT participates in shipbuilding not only by financing it but through joint
ownership, involving shared financing between the CATT and the domestic
merchant shipping company. Each ship although owned by both companies
is managed and operated by the local shipping company.

(1) Key Features

• Prior to ship construction, both the CATT and shipping company

determine basic specifications and design (taking into account the
route on which the ship will operate and relevant harbor conditions).
• When the specifications and design are decided, shipbuilding cost and
the proportion thereof to be borne by each party is determined. An
order is to be jointly placed with the shipyard by the CATT and
shipping company. The latter selects the shipyard, whose technical
expertise and building capacity are assessed by the CATT.
• As a partner or joint owner of the ship, the CATT supervises all stages
of ship construction at the shipyard, attends shop tests, sea trials, and
conducts final inspection.
• Upon completion, vessel ownership is resolved by basing it on the
respective costs shouldered by the CATT and shipping company. The
two parties then execute a joint-ownership contract for the ship’s use.
The ship is managed and operated by the merchant shipping
company, who shoulders the ship’s operating costs and retains all
profits earned through the ship’s operation.
• The merchant shipping company pays the CATT charges for the
period of joint ownership, i.e., the ship’s service life, and the residual
book value (10%), which in turn provides funding the merchant
shipping company’s request for technical support, including periodic
inspections and additional surveys when the ship figures in an
accident.

(2) Merits

• Easy access to construction financing: Ship construction is quite

expensive. Since the CATT partly owns the ship and does not merely
provide financial assistance, a ship owner does not have to fork out
huge capital investments compared with direct private financing. This
way, many ship owners would likely prefer to build new ships and
replace aged vessels.
• Available technical support: CATT technical specialists are
experienced and competent from years of actual shipbuilding.
Technical support is available from the specification/design stage to
shipbuilding supervision and throughout the joint-ownership period.

I-4-7
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

(3) Charterage and Joint Ownership Conditions

Charterage is to be paid to the CATT by the merchant shipping company

during the period of joint ownership of the ship which will be calculated as
follows:

• Proportion financed by the CATT X 9/10 X 1/joint ownership period-

Deferred period
• Residual book value x interest (Defined in joint ownership contract)
• The charterage per annum is the sum of a + b payable in monthly
installments.

At the end of the joint ownership period, the merchant shipping company
pays CATT a residual book value of 10% of the amount initially financed
by CATT. The joint ownership period and proportion to be financed by the
CATT are defined in the following table:

Table 4.4.1
Joint-ownership Period and Proportion to be Financed by CATT

Financed Joint-ownership Period

Category Proportion 2,000 Gross Less than
(%) Ship Type
Tons or More 2,000 Gross Tons
Passenger Interisland ship 80 Car ferry 15 years 11 years
Ship Medium-/long- General passenger ship 15 14
range ferry Light alloy ship
FRP ship
Others 70 9 years
7 years

Cargo General cargo ship 80 General cargo ship 15 14

Ship Oil tanker 60 – 80 Oil tanker 13 11
Car carrier 70 – 80 Car carrier 15 14
Cement carrier 60 – 70 Cement carrier 15 14
Special tanker 60 – 70 Special tanker 13 11

(4) Track Record

In the 37 years since its establishment in 1959, the CATT has engaged in
numerous joint-ownership projects (see Table 4.4.2), thereby greatly
contributing to the modernization of Japanese merchant shipping.

Table 4.4.2
Joint-ownership Projects, 1959-1996

Type of Vessel Number Gross Tonnage

Passenger Ships 857 664,000
Cargo Ships 2,399 2,277,000

I-4-8
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

It is advisable to adopt the joint-ownership method and organization in

Vietnam to support ship owners who are financially constrained.

(5) Maritime organization

Another critical aspect is the overall management of the industry. To

achieve a coordinated, well-planned and complementary development of
the maritime industry, it is necessary to establish a government agency
that will attend to all maritime affairs and agencies.

4.1.5 Implications for Vietnam’s Shipping Industry

To pursue the planned fleet expansion program in Vietnam, it is likewise

necessary to establish supporting policies for the shipping industry.

1) State financial organization: In particular, as a practical measure in securing

financial funds for ship acquisition and shipbuilding, the establishment of a
state financial organization is strongly recommended. This organization
should be created as a financial center and an advocate of shipping and
related industries. Also, the possibility for this organization to be a credit
facility should be explored. Funding can come from foreign cooperation funds
for relending to eligible borrowers regardless of sector at a reasonable
interest rate. As already discussed, similar organizations already operate in
Malaysia and the Philippines with the full support of their respective
governments.

2) Tax breaks: These are effective measures to relieve ship owners with
financial burden. New taxation policies on corporate and income taxes should
be adopted until such time as ship owners become competitive.

3) Other schemes: There are certain schemes to encourage a fair and free
competition in shipping at the international level like the APEC maritime
initiative and Asian shipping forum. However, since the Vietnamese shipping
industry is still under the process of improvement in terms of available
capacity and ability, appropriate and supporting measures should be strictly
enforced. The shipping industry in Vietnam must proceed cautiously toward
opening its market and allowing competition, particularly in domestic
shipping, if the public and national interests are at stake.

4) Joint ownership and corporatization: As one of the specific measures to

assist ship owners in acquiring and building vessels for domestic use, it
would be appropriate to encourage joint ownership which has long been
adopted by the CATT to promote and modernize Japan’s domestic fleet.

4.2 Development of a Transshipment Port in Vietnam

I-4-9
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

Introduction

The concept of building a specialized port for the transshipment of containers in

Vietnam comes from the following observations:
1) Container shipping is booming, particularly in Asia;
2) The shipping strategy for mega carriers leads to the use of bigger vessels
which require deeper water ports;
3) Regional hub ports, Hong Kong and Singapore, enjoy increasing container
traffic volume, while land scarcity becomes apparent.
4) Vietnam is located between Hong Kong and Singapore and endowed with a
long coastline, thus offering favorable alternative sites from a nautical point of
view.
5) If a regional transshipment port is situated in Vietnam, shippers and
consignees will benefit from direct shipping services with many overseas
markets.

It is Vietnam’s hope and many Asian countries’ as well that with an available
transshipment port in their respective territories the present demand on
Singapore and Hong Kong for transshipment services will spill over to them.

Table 4.2.1
Relational Distances among the Major Ports in the Region
(unit: km)
Ports Hong Kong Vung Tau Singapore
Kaohsiung 719 2,003 3,317
Manila 1,172 1,700 2,422
Cebu 1,780 2,142 2,560
Vung Tau 1,625 - 1,120
Kota Kinabalu 2,010 1,329 1,600
Bangkok 2,760 1,207 2,226
Singapore 2,650 1,120 -
Jakarta 987 1,875 3,310

International Container Shipping Business

Container traffic has continuously grown since its appearance in the 1960s. In
1980, international ports in total handled 36 million TEU whilst they recorded 138
million TEU in 1995. It should be noted that the ports at least double count the
number of global container movements while they handle substantial LCL (less
than container load) and empty containers and the containers in transshipment. It
is therefore estimated that the total number of full, international shipping
1
containers in 1995 was 50 million TEU. The UN ESCAP forecasts that this total

1
UN ESCAP “Intraregional Container Shipping Study, 1997”

I-4-10
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

will rise to 105 million TEU by the year 2006. It means that further
containerization is expected at the pace of more than 7% annually.

The shipping business has considerably changed in the last years. Ship owners
and ship operators had to face a fiercer competition in global markets. This has
led them to elaborate the following three strategies:

1) Global alliance, merger and acquisition

Ship operators have resorted to global alliance, merger and acquisition in

order to offer the best possible service to shippers by combining routes,
destination, frequencies of sailing and cut down the operation cost at the
same time through mass service effects. Some examples are:

- Joint-operation between P&O and Nedlloyd or Hanjin and DSR-Senator

- Acquisition of APL (American President Lines) by NOL (Neptune Orient
Lines)
- Merger of Navix with MOL (Mitsui O.S.K. Lines)

2) Larger container ships

Mega carriers, as the results of global alliance, merger and acquisition, have
ordered many larger container ships even under over-capacity business
environments. It enables to cut down the production cost per TEU: from US$
10 on small size ships to US$ 5-6 on Over Panamax type ships. In addition,
the operational speed of the new vessels is higher than that of the old ones,
e.g., ships over 5,000 TEU have now a standard speed of about 25 knots
while the 2,000-3,000 TEU capacity ships built a few years ago, could sail at
21-22 knots only. Higher operational speeds increase the actual carrying
capacity. (Refer to Table 4.2.2)

3) Hub ports

The assignment of larger ships theoretically leads mega carriers to a strategy

of “hub port” or “hub and spokes”. It is reported that the container terminal
accommodating Over Panamax ships should be able to handle at least 2,000
containers in 24 hours. The strategy is particularly shown in Kaohsiung where
Maersk operates its own private high productive terminal. It also needs to
develop feeder routes in order to serve small amounts of containers at small
ports. Mega carriers usually assign small and old container ships for such
2
services .

2
Average container ship size assigned at Vietnamese ports in 1999: HCM City ports – 622 TEU, Hai Phong
– 312 TEU, Danang – 250 TEU.

I-4-11
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

Figure 4.2.1
Historical Scale-up of Container Vessels

Vessel Size
Category Breadth (m) Length (m) Capacity (TEU) Necessary
Port (m)
17-31 110 - 210 -1,700 -12
Under Panamax
(1966-1980)

32 210 - 270 1,900-3,400 12-14

Panamax
(1980-1990)

32 289 - 294 3,000-4,300 14-15

Panamax-max
(1985-)

Over 32 262 - 300 Over 4,100 Over 15

Over Panamax
(1995-)

Source: Ministry of Transport, Japan

Table 4.2.2
World Container Ship Fleet

Size Range 1998 1999

(TEU) No. ‘000 TEU Growth No. ‘000 TEU Growth
5,000 and over 33 188 94.8% 48 280 48.9%
4,500-4,999 29 138 42.9% 32 151 9.4%
4,000-4,499 110 466 18.2% 125 529 13.5%
3,500-3,999 55 205 13.4% 71 265 29.3%
3,000-3,499 111 365 12.5% 117 384 5.2%
2,500-2,999 213 590 8.4% 221 668 13.2%
2,000-2,499 170 374 24.5% 215 476 27.3%
1,500-1,999 301 515 15.9% 346 590 14.6%
1,000-1,499 529 632 8.4% 584 698 10.4%
750-999 206 180 11.0% 241 210 16.7%
500-749 475 295 18.6% 520 324 9.8%
Total 2,232 3,948 17.0% 2,520 4,575 15.9%
Note: Growth in relation to the previous year

Prime Container Ports in Asia

At present, seven ports are regarded as prime container ports in Asia with
handling more than two million TEU yearly, i.e., Singapore, Hong Kong, Pusan,
Kaohsiung, Kobe, Tokyo and Yokohama. In 1998, Singapore recorded 15.14
million TEU in container operation, the biggest port handling volume in the world.

I-4-12
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

3
The transshipment rate was estimated at 80% in 1997 . The advantage of
Singapore can be explained by the following:

1) Modern and sufficient port infrastructure and facilities: deep and long berths
for exclusive purposes such as container traffic, liquid bulk and dry bulk;
efficient cargo handling equipment; advanced cargo distribution centers and
various warehouses.
2) Expeditious port documentation procedure using advanced EDI technologies
3) Convenient port services such as pilotage, towage and bunkering
4) Premier location for some 400 shipping lines with links to over 700 ports
worldwide

Singapore and the other governments who own the prime container ports are all
keen on investing in deep and exclusive container terminals in order to promote
further containerization and compete with the rival ports.

Table 4.2.3
Development Trend in Deep and Exclusive Container Terminals in Asia

Container No. of Existing

No. of Scheduled
Throughput Container
Country Port Container Terminals
(Mil. TEU in Terminals (as of
(as of 2000)
1998) 1998)
Singapore Singapore 15.1 6 13
PR China Hong Kong 14.7 4 16
Taiwan Kaohsiung 6.3 0 3
Korea Pusan 5.8 4 4
Kwangyang 4 4
Japan Kobe 2.1 4 5
Yokohama 2.2 0 3
Tokyo 2.5 0 3
Osaka 0 3
Source: Ministry of Transport, Japan
Note: Berth water depth is 15 meters and more.

Followers in the ASEAN Region

Neighboring countries heavily rely on Singapore as a transshipment port not only

for interregional cargo but also intra-ASEAN cargo. In the late 1990s, however,
Port Klang in Malaysia and Laem Chabang in Thailand have increased their
direct linkage with the ports outside the region due to two common reasons:

• Both governments clearly define their primary container ports and guide
containerized cargo to the ports; and

3
Drewery Shipping Consultants Ltd., 1997.

I-4-13
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

• Both the ports have recently developed container berths 14 to 15 meters

deep, which may accommodate vessels of at least 50,000 DWT or Panamax-
type container ships (1,900-3,400 TEU). For instance, Port Klang has a 15-
meter deep container berth capable of receiving vessels of 80,000 to 100,000
DWT with capacity of more than 6,000 TEU. It now has 67 direct line services
and 38 feeder services to/from 300 ports worldwide.

Brunei Darussalam, Indonesia and the Philippines are also very keen on deep
seaport and containerization, while Cambodia, Myanmar and Vietnam, which do
not have deep seaports and modernized container berths, have ongoing studies
on port improvement/upgrading.

Table4.2.4
Gateway Ports of ASEAN Countries

No. of Berths Port Traffic 1997

Total Length Port Depth
Port/Country Convent- 2 Cargo Container
1 Container / of Berths (m) (m)
ional / (000 tons) (000 TEU)
Muara/Brunei
4 3 861 10-11 2,379 84
Darussalam
Sihanoukville/
3 0 350 8 794 61
Cambodia
Tanjung Priok/
14 6 8,911 -12 28,643 1,820
Indonesia
Port Klang/
31 13 8,648 15 56,766 1,684
Malaysia
Yangon/
15 2 2,550 9 7,977 96
Myanmar
Manila/
87 9 7,592 3.3-12.5 11,081 2,117
Philippines
Singapore/
43 37 n.a. -15 312,200 15,140
Singapore
Laem Chabang/
5 5 2,250 6.5-14 2,211 1,036
Thailand
Saigon/
19 0 2,084 5.5-10.8 7,210 77
Vietnam
Source: ASEAN Transport and Communications Cooperation Framework Plan, 1999
Note 1/ Including oil, bulk, multifunctional berths
2/ Including exclusive berths for container handling

I-4-14
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

Table 4.2.5
Committed/Ongoing Container Port Development in ASEAN

Country Port Development Plan

Brunei
Muara Additional berths with deepening channel to 13 m.
Darussalam
Cambodia Sihanoukville 2 berths (240 m in width, 8.5 m in drought, Year 2005)
Indonesia Tanjung Priok Terminal III : 4 berths (900 m in length, Year 1998)
Port Klang 10 berths (250m long x 15 m in depth, Year 2000-2006)
Malaysia Penang 3 berths (Year 2005)
Johor 4 berths (2000), 5 berths (2005)
Thilawa 5 berths (1,000m, under construction since 1995 September, 25
Myanmar years BOT Project)
Yangon 1 berth (1,000m long x 33m wide x 10m draft, 25 years BOT)
Philippines Manila MICT: 1 berth (300m long, year 1998)
Singapore Pasir Panjang 6 berths (Draft 15 m)
Phase 2: 5 berths (500-700m long x 16m deep/berth, from Year
Thailand Laem Chabang
2000 to 2005)
Ho Chi Minh
Vietnam VICT: 3 berths (550m long x 10 m deep, year 1998 to 2001)
City Area
Source: ASEAN Transport and Communications Cooperation Framework Plan, 1999

Implications for the Vietnamese Port System

1) Development of Exclusive Container Berth and Yard

A problem often found in Vietnam, where their trading partners in the

industrialized world may impose the use of containers, is that containers have
to be handled in conventional berths. The throughput rate and expected
savings from unitization may be severely reduced as a consequence. It is
probable that although the capital investment in container berths is higher
than in conventional berths, the annual throughput in tons is proportionally
much higher in the container berth. The port cost per ton is lower accordingly.
In near future, even within intra-ASEAN, Vietnamese trading partners will
strongly request the use of containers on much more occasions in line with a
regional containerization trend. There is need, in other words, for a certain
level of throughput in a container berth to obtain the positive effects on cost
per ton.

2) Development of A Prime Container Port in Vietnam

There are 12 prime container ports in the world on the conditions that they
handle more than two million TEU annually. Those ports commonly show the
following competitiveness:

(1) Good port infrastructure and efficient cargo handling services;

I-4-15
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

(2) Excellent intermodal connection with their hinterland; and

(3) Encompassing wide hinterland where strong economic activities are done
in connection with the global markets.

According to the VITRANSS traffic demand forecast, Vietnam will handle 6.6
million TEU under the high-assumption scenario of the year 2020, which is
further divided into three gateway port areas:

North – 1.8 million TEU

Central – 1.3 million TEU
South – 3.5 million TEU

Therefore, Vietnam will be able to create a new prime container port in the
south until the year 2020 with the following development strategies:

(1) Vietnam will intensively develop Vung Tau as a prime container port.
Vung Tau is in premier location in the south due to its deep waters
(possibly more than 15 meters), wide and many accessible navigational
channels and enough land for port complex development including
container terminals, warehouses and industrial estates.
(2) The intermodal connectivity between HCM City and Vung Tau will be
strengthened by inland transport development (road, rail and inland
waterway), ICD operation and multimodal transport operation.
(3) Presently many ports along Saigon, Nha Be and Thi Vai rivers handle
container cargo at either conventional or container berths. However, the
concentration of container cargo at Vung Tau will be very important to
provide economic-scale benefits to shippers and consignees, i.e., more
frequent shipping in/out their cargoes by larger container ships at cheaper
prices.

3) Increase in Handling Transshipment Container

Foreign shipping lines’ preference to transship container cargo in Hong Kong

and Singapore rests on five factors which this paper identifies thus:

(1) Good port infrastructure and efficient port operation to minimize waiting
and berthing time;
(2) Reasonable transshipment charges;
(3) Strategic location on the global/regional shipping network;
(4) Many ship calls in connection with many ports around the world; and
(5) Accumulated capital investment of foreign shipping lines.

The Vung Tau port development will be able to satisfy the first and second
criteria through necessary capital investment and policy incentives while
some alternative transshipment function can be expected from Hong Kong
and Singapore because of its location. However, the achievement of the

I-4-16
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

fourth criterion will really depend on the economic development in the south
and the development policy on regional port system that will encourage
container cargo trade to Vung Tau. Last but not least is Vietnam’s inherent
weakness. Hong Kong and Singapore have exerted effort to attract the
capital investment of foreign shipping lines as well as forwarders. Today,
Singapore aims to become a regional business hub, encouraging foreign
shipping lines to locate their regional headquarters in Singapore by giving
them tax incentives. On the other hand, the Vietnamese government has not
opened the transport industry to foreign investment. According to the ASEAN
Framework Agreement on Services and its Protocols (CPC7212),
government:

(1) Allows foreign shipping companies to establish a representative office

only;
(2) Restricts representative offices of foreign shipping companies from
conducting business activities in Vietnam; and
(3) Requires foreign shipping companies to appoint their Vietnamese
shipping agency counterpart as its general agent to supply maritime
services.

4) A Transshipment Port in the Central Region

The VITRANSS Study Team recognizes some issues related to

transshipment port in central Vietnam. According to MOT Decision No.
608/QD-GTVT (13 March 1999), the Vietnamese government has a study
plan to create a transshipment port facility at two candidate sites, i.e., Chan
May and Vang Phong in the central region. However, when compared with
the Vung Tau project, the viability of both sites is lower due to scarce
hinterland population and inactive economy even if some parts of Lao and
Cambodia are included.

It is true that there is some opportunity for a mega shipping line to construct a
private transshipment port regardless of hinterland development. Evergreen,
ranking second as the global container carrier, made such MOUs with the
Indonesian government for a port at Batam Island (20km south from
Singapore) in 1993 and the Vietnamese government at Vung Tau in 1996.
However, both MOUs are not in effect anymore, thus hindering port
construction.

Moreover, due to the inconvenient location, a transshipment port in the

central region would apparently burden many shippers and consignees with
additional transport costs. Therefore the project cannot justify tapping any
public fund for port construction and related infrastructure development.

I-4-17
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

5 SHIPPING DEVELOPMENT STRATEGIES

5.1 Strengthening Maritime Administration

Vietnam’s shipping industry is composed of various service sectors including:

• State-owned enterprises under VINALINES
• State-owned enterprises under the MOT
• Local government-owned enterprises
• Joint venture companies
• State-owned corporation
• Private corporation
• Private companies
• State-owned enterprises under the Ministry of Industry
• State-owned enterprises under the defense force

In general, shipping activities and port operation are conducted individually by

each sector. Thus, overall administrative control is required to implement a
nationwide policy in the maritime subsector, excluding national defense.

Although the MOT and VINAMARINE have issued Directive No. 356/1998/CT-
BGTVT and Notification 1950/TB-CHHVN to intensify administrative reform in
management activities, there has been no distinct change. It has been presumed
that some sectors in the industry might have close relations with government
authorities thus undermining VINAMARINE’s authority. As far as the whole
shipping administration is concerned, VINAMARINE should be an exclusive
organization with control over all maritime activities as authorized by government
and the MOT.

It is expected that in the coming years, the maritime subsector in Vietnam will
have to address its problems to enable it to expand, modernize and rehabilitate
its shipping fleet and port facilities. This would also require government to
enforce uniform and consistent policies for the subsector.

The maritime subsector of Vietnam needs to regulate itself in accordance with

international requirements as stipulated in related conventions. VINAMARINE’s
cooperation is highly expected, particularly since the Government of Vietnam has
agreed with and signed the MOU on port state control in the Asia-Pacific region
(Tokyo MOU) in 1996, and which took effect on 1 January 1999. The main
objectives of this MOU are:

1) to establish an effective port state control regime in the Asia-Pacific region

through cooperation and harmonization;
2) to eliminate substandard shipping to promote maritime safety; and
3) to protect the marine environment and safeguard working and living
conditions on board the ships.
Toward this end, the role of the VMSA should be intensified to enable the country to

I-5-1
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

fully accede to the MOU’s requirements. To promote maritime safety as a state

administration function, it is an urgent task of VINAMARINE to increase the number
of technical specialists competent on marine safety inspection.

* Proposed Strategies *
• Reform and strengthen VINAMARINE’s administrative authority over the
maritime industry.
• Comply with the industry’s requirement and submit appropriate proposals
to the government and MOT in order to enforce urgent measures for the
promotion of shipping and upgrading of human resources.
• Increase the number of inspectors and improve the training programs for
Port State Control inspectors.
• Transfer port management from VINAMARINE to other appropriate and
capable agency to allow VINAMARINE to concentrate on other equally
important administrative functions.

5.2 Competitive and Liberalized Shipping Environment

Overseas Shipping

Government Circular No. 19/TB of 24 February 1996 indicated government’s

transport share targets of 40%, 30% and 20% of containerized exported goods,
crude oil and dry goods, respectively, to be handled by its flag vessels. However,
since government has not extended any kind of support to the maritime industry,
these targets were not achieved. In fact, the share of national vessels in the
transport of exported and imported cargoes was only 20% of yearly cargo
movement to the discontent of all sectors of the industry, including shippers.
Besides government’s lack of support, the past years’ poor performance has
been caused mainly by poor service quality, limited capacity and the shipping
operators’ disadvantaged positions as compared to foreign shipping operators on
trade contracts.

The present capacity for the carriage of foreign trade cargoes by Vietnamese
flags is limited both in quality and space. VINAMARINE reported that the number
of cargo vessels over 200 DWT as of February 1998 is 477, 57 of which are over
5,000 DWT and are mainly serving foreign trade. Then too, the average age of
its present fleet of ocean-going vessels is high at 21 years. Thus, expansion and
modernization of vessels is an important and urgent issue to comply not only with
the national requirement but also with the expected increase in demand due to
industrialization. However, the industry is also faced with existing constraints
such as limited finance, which is most important in the acquisition of modern
vessels, and domestic capability in shipbuilding.
A key factor to consider when establishing the required fleet expansion is the

I-5-2
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

accurate estimation of the required containerization, since, at present, almost all

general cargoes are being containerized for safety and efficiency. Despite the impact
of the economic crisis on Asian economies, container traffic to and from other parts
of Asia will increase more rapidly than the world average. It was also reported that the
most rapid container traffic increase is expected in west and south Asia, where
container revolution is still in its infancy. This gives Vietnam a great potential to
increase its container traffic in the coming years. In fact, Vietnam has handled a total
of 820,190 TEU container cargoes in 1998, with an average growth rate of 37% from
1991 to 1998. In the past three years alone, it has recorded an average of 15%
growth rate a year. Based on a comprehensive study and survey of demand patterns
by the VITRANSS Study Team for the long-term strategy (2020) and the medium-
term Master Plan (2010), the projected containerization is as follows:

Table 5.2.1
Projected Containerization in Vietnam

Year High Assumption

2010 3,404,000 TEU
2020 7,004,000 TEU

Domestic Shipping

There is no distinct service jurisdiction between major state-owned shipping lines

and the private sector. This makes the authorized state-owned shipping lines
enjoy the dominant share in the transport of domestic cargoes on their ocean-
going vessels. It may be an acceptable arrangement for the meantime to protect
its own flag vessels. But in the coming years, opportunities for major
consignments should be given to both state-owned and private operators, thus
liberalizing the shipping industry to encourage its continuous development and
upgrading of services.

Domestic shipping services will be upgraded through the (1) assignment of

medium-size vessels (3,000-5,000 DWT), (2) promotion of containerization and
specialization; and (3) provision of economical and reliable operations with good
intermodal connection.

Ship Finance

Except for some dominant state shipping and JV companies with foreign carriers,
almost all shipping operators have difficulty securing financial loans to fund their
fleet expansion plans. The Ministry of Finance (MOF) is planning to establish a
State Financial Investment Company (SFICO) and is submitting its project
proposal to government. The SFCIO is expected to be an intermediary financial
body between government and shipping companies and will be authorized to
carry out direct investments, at the same time it will be responsible to
government for capital investments in the industry.

I-5-3
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

In relation to this plan, a specific concession in the loans to ship owners should
be considered, since there are many issues to be solved covering not only fleet
expansion but also shipbuilding technology and ship operation. A similar
structure that could be adopted is the joint-ownership method that has long been
implemented in Japan (refer to Section 4.4). A new financial facility such as the
proposed SFICO may collect funds from government and foreign lenders.
However, ODA fund is only valid for lending to a domestic cabotage transport.

Shipbuilding

The development of the Vietnamese shipbuilding industry is one important

component of the long-term strategy, especially in the production of over 5,000
DWT vessels at reasonable price levels. In this connection, VINASHIN launched
a new shipbuilding program for 6,500 DWT bulk cargo vessel at their Bac Dan
Shipyard as ordered by a leading state shipping company.

* Proposed Strategies *

• Direct allocation of the state budget to a newly established finance facility

an invitation/allocation of foreign loans to this credit facility for it to function
like a financial corporation.
• Provide incentives to the shipping industry, such as tax breaks, exemption
from corporate tax and/or income tax (VAT), etc. until their fleets meet a
certain level of competitiveness.
• Promote containerization and multimodal transport not only at ships and
ports but at port access and relay facilities such as ICDs.
• Liberalize the domestic traffic to invite a freer and fairer competition among
domestic shipping companies and separate the operation of ocean-going
domestic shipping vessels.
• Encourage state-owned shipping companies to gradually concentrate their
business activities in serving foreign trade only. The VITRANSS Study
Team is further suggesting the necessity of an open market and fair
competition in this field.
• Conduct further studies on the possible areas where government may
upgrade, expand and modernize the shipping industry of Vietnam. The
identified areas by the VITRANSS are (1) adoption of government support
policies for the industry such as tax incentives, (2) establishment of a credit
facility for investment purposes, and (3) strengthening of the domestic
shipbuilding capacity.

I-5-4
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

Although initial shipbuilding of big vessels has been undertaken, this has been
done under the supervision of foreign technical experts and with sufficient
equipment. It would still be advantageous for the local shipping industry and
manpower to be exposed to shipbuilding activities in a domestic shipyard. Since
the VINASHIN project is reportedly receiving policy support from government,
this would mean that there is room for similar support for the proposed
nationwide fleet expansion and modernization in Vietnam.

5.3 Fleet Expansion and Modernization

Overseas Shipping Fleet

Future Vietnamese flag vessels engaged in overseas shipping have been

analyzed by vessel type based on the following sources:

• Recent shipping business environments

• VINALINES fleet investment plan for the period 2001 to 2010 (refer to Box
5.3.1) and
• VITRANSS traffic demand forecast

1) Container Vessels

VINALINES plans to invest in container fleet expansion with the acquisition of

14-18 vessels of 800-1,200 TEU, in the short to medium term (2001-2010).
The vessels shall be used in intra-Asia traffic. In the long term (2010-2020),
given the expected progress on the construction of new container berths and
rehabilitation of existing ports, the present 400 TEU vessels will be replaced
with bigger vessels with 1,000-2,000 TEU.

VINALINES is also exploring the potential of engaging its vessels in American

and European trade. However, taking in the present tight competition among
shipping lines from all over the world, this is not recommended at this time,
especially since the Asia-USA trade, for instance, has not shown any sign of
profitability for the carrier. Under the circumstances, the shipping strategies
that should be adopted by Vietnam’s container vessels are as follows:

• Concentration on intra-Asia traffic

• Increase of the share of private and local provincial operators in coastal
shipping
• Upgrading of the service quality of coastal shipping

2) Crude Oil Tanker

Generally, transportation of crude oil is conducted by buyers or traders and

depends on the terms of the business contract. The so-called Oil-Major and Oil-
Trader buy large quantities on FOB terms and sell the product to users on

I-5-5
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

Box 5.3.1
Fleet Supply Plan of VINALINES

Major carriers under VINALINES recently reported their strategies and orientation in
the field of marine transportation and fleet expansion, as follows:

1) Privatization of VINALINES to obtain capitalization for a medium-size maritime

company in the region with advanced technology and operations, competent
enough to cooperate and share in the Asian market in all transport activities
such as container handling and transport services.
2) Development and modernization of fleet vessels and ports to increase
competitiveness, to gradually increase transport share of import-export cargoes
and to participate in the transport market in the region.
3) Development and improvement of maritime infrastructures’ capacity to
accommodate vessels with increasing tonnage.
4) Construction of service units related to container transport procedures such as
dry ports, container yards, freight dispatch centers, on-land and river container
transport means, and general improvement on the quality of services of the
facilities.

VINALINES’ short-term fleet expansion plan shall have its vessel fleet operating
mainly in Asian countries, and in the long term, it shall prepare to extend services
toward Europe and the United States of America.

VINALINES Investment Plan for the Period 2001 to 2010

No. of
Type of Vessel Size of Vessels TEU Remarks
Vessel
Container 14 – 18 800 – 1,200 TEU 11,200 – To serve China,
Vessels 21,600 Japan, S. Korea,
India
Crude oil 5 65,000 DWT From 2001 to 2005 to
Tanker carry oil for export
from Refinery Plant
3 90,000 DWT No.1.

From 2006 to 2010 to

purchase 3 vessels of
90,000 DWT
Product oil 60,000 – 80,000 To increase transport
carrier DWT share from the
current 14% to 40%
by 2010
Bulk Carrier 10 – 14 24,000 – 35,000 DWT To increase loading
share to 20% by 2010
Source: VINALINES

I-5-6
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

certificate and freight (CF) or certificate of insurance and freight (CIF) terms.
Therefore, factors such as clients, destination, trade term, and duration of
shipment should be considered in planning fleet expansion (i.e., number and
type of vessels needed).

VINALINES’ investment plan is to acquire a total of five oil tankers of 65,000

DWT and three of 90,000 DWT in the short to medium term (2000-2010).
Presumably, this expansion plan was made to increase its trade share in
anticipation of the development of the Dung Quat oil refinery project. It is,
however, advisable that the acquisition of bigger crude oil tanker (80,000 to
159,999 DWT) be considered instead.

The cargo forecast provided by the VITRANSS indicates a considerable

volume of liquid cargo for export and import. As a source of crude oil,
Vietnam would likely capture a reasonable share in the transport of this
precious commodity. The country’s shipping industry should thus have a
supply of well-trained and competent seafarers. VINALINES should also
establish a financial arrangement, such as letter of credit (LC), to enable ship
owners to enjoy an advantageous trade term, an important factor in this kind
of trade.

Thus, in the expansion plan for oil tankers, the acquisition of three to five oil
tankers with load capacity of at least 90,000 DWT each vessel should be
considered until 2010. Further expansion in the long term (2011-2020) should
depend on market and charter trends and should already be focused on
contracting larger volumes and transporting by large vessels.

3) Tanker for Petroleum Products

There is potential as well in expanding the trade share of transporting

imported oil product in Vietnam. VINALINES has plans of increasing its lifting
share from the present 14% to 40% by 2010. In 1998, Vietnam imported
approximately 8 million tons of petroleum products. Thus, it is recommended
that the planned expansion of tankers carrying these items be implemented
with the acquisition of a total of 7-8 medium-size (25,000 DWT) and large
(30,000 DWT) oil tankers until 2020.

4) Bulk Carriers/General Dry-cargo Vessels

At present, VINALINES has very old bulk carriers it plans to replace with 10-
14 bulk carriers of 24,000-35,000 DWT. This will allow the company to
increase its shipping share to 20% by 2010. A continuing investment until
2020 is recommended to carry out fleet expansion.

Domestic Shipping Fleet

The JICA M/P Study on Coastal Shipping (19997) prepared a fleet development

I-5-7
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

plan with two phases, i.e., up to 2000 and 2001-2010. Some significant events
occurred in the late 1990s supporting the fleet development plan as follows:

• Domestic coastal shipping traffic doubled during the period 1995-1998 and is
being served by larger vessels that were used in overseas shipping.
• Container liner operation commenced in 1998.
• Nghi Son Cement constructed its private port.

The VITRANSS thus used the fleet development plan for 2001-2010 prepared by
the JICA study and modified and extended it toward year 2020.

* Proposed Strategies *

• Expansion and modernization of Vietnamese flag fleet to meet traffic

demand under a competitive business environment.
• Formulation of varied arrangements to manage the acquisition plan (e.g.,
hiring bare boat for charter services, leasing secondhand vessels, etc.) in
light of limited financial resources.
• Strengthening of the Vietnam Ship owners Association (VSA) to further
boost the interest of ship owners in bargaining with government their fleet
expansion plans.

Table 5.3.1
Fleet Development Plan for Overseas Shipping

Unit Price Capital

Year Type Size Number
(US $mil.) Requirement
2000-2010 Container ship 800-1,200 TEU 18 17.0 306
Crude oil tanker 90,000 DWT 3 40.0 120
Oil product tanker 25,000-30,000 DWT 8 25.0 200
Bulker GC vessel 24,000-35,000 DWT 18 17.0 306
Subtotal 47 932
2011-2020 Container ship 1,200-1,500 TEU 10 26.0 260
Crude oil tanker 90,000 DWT 5 40.0 200
Oil product tanker 25,000-30,000 DWT 10 27.5 275
Bulker GC vessel 24,000-80,000 DWT 20 26.0 520
Subtotal 45 1,255
2001-2020 TOTAL 92 2,187

I-5-8
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

Table 5.3.2
Fleet Development plan for Domestic Shipping

Unit Price Capital

Year Type Size Number
(US$ mil.) Requirement
2000-2010 Bulker GC vessel 500-5,000 TEU 85 4.0 340
Cement carrier 5,000-7,000 DWT 5 11.0 55
Semi-container ship 2,000 DWT 2 7.0 14
Roro ship 5,000 DWT 1 17.0 17
Oil product tanker 3,000-20,000 DWT 3 15.0 45
Passenger ship 60-490 GVT 8 0.5 4
Subtotal 104 475
2011-2020 Bulker GC vessel 500-7,000 TEU 70 7.0 490
Cement carrier 5,000-7,000 DWT 10 12.0 120
Coal/Ore carrier 2,000-3,000 DWT 10 4.0 40
Container ship 2,000-5,000 DWT 6 11.0 66
Roro ship 5,000 DWT 2 17.0 34
Oil product tanker 5,000-20,000 DWT 8 16.0 128
Passenger ship 100-500 GVT 15 0.6 9
Subtotal 121 887
2001-2020 TOTAL 225 1,362
Notes: 1/ The above figures are based on the assumption that the required vessels will be newly built.
2/ Shipbuilding prices supplied by the Shipbuilders’ Association of Japan.

5.4 Projects on Maritime Safety

1) Aids to Navigation

According to the VITRANSS transport demand forecast, as international

shipping grows, the volume of traffic along the coast of Vietnam will likewise
increase by leaps and bounds, and shipping movement will be complicated
around major ports. Unfortunately, accidents at sea are bound to increase as
well, unless preventive measures are taken immediately.

ATNs are essential to prevent accidents and keep coastal shipping operating
smoothly and efficiently. ATNs are broadly grouped into visual ATN and
electronic ATN. ATNs supporting ships and workshops are necessary to
maintain and repair ATN.

This project aims at lighting navigational channels along the long coastline
and developing a sustainable repair and maintenance system.The proposed
project covers the following components:

(1) Visual ATN: including 97 lighthouses, 82 light beacons, 474 lighted buoys
(2) Electronic ATN: including 28 radar beacons and the differential global
positioning system (DGPS) nationwide
(3) ATN support equipment and facilities: two buoy tenders, 10 small
maintenance ships, 16 patrol boats, communication facilities, light

I-5-9
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

monitoring facility, four workshops, and two factories.

It should be noted that the above components consist of existing and newly
built facilities/equipment. At present, there are 57 lighthouses in operation, 37
of which are to be rehabilitated. Thus 40 lighthouses are to be constructed
during the M/P period. This proposed project excludes the Spanish
undertaking that recently commenced in collaboration with the VMS (US$ 3
million in total). It will cost VMS US$ 63.6 million in total during the project
period of 2001-2010. It will be supported by an ODA fund which the VMS will
repay using the maritime safety fee it levies on both overseas and domestic
sea-borne vessels (US 30 cents/DWT).

2) Maritime SAR System

In accordance with Prime Minister’s Decision No. 780/TTG in 1997, the

Vietnam National SAR Committee was established as the highest state
organization in SAR operations, which directly commands specialized SAR
coordination centers on aviation, maritime, fishery, and petroleum. The
Vietnam Maritime SAR Coordination Center (VMRCC) has three regional
maritime SAR coordination centers in Hai Phong, Danang and Vung Tau.
However, they do not have any vehicles such as ships, planes and
helicopters.

The proposed project aims at conducting maritime SAR operation and oil spill
protection smoothly and effectively whenever accidents occur on Vietnamese
waters. The proposed project will provide its regional coordination centers
with the following facilities and equipment:

Table 5.4.1
Facilities and Equipment for Regional Maritime SAR Coordinating Centers

Item Hai Phong Danang Vung Tau

Middle-size Rescue Ship (41m) 1 1 1
Small-size Rescue Ship (27m) 2 2 2
High-speed Canoe 2 2 2
Life Buoy & Life Raft 10 20 10
Anti-pollution Equipment 1 set 1 set 1 set
(Estimated Cost: US$ 52.8 million)

3) Seafarers’ Education

The number of Vietnamese seafarers is increasing both onboard Vietnamese

and foreign vessels. However they are weak in, among others, modern
navigation knowledge and techniques, onboard training experience,
communication in maritime English language. With a view to overcoming
these weaknesses, the project aims at upgrading existing education and

I-5-10
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

training institutions in compliance with the latest amendments of maritime

conventions such as SOLAS, STCW, MARPOL, ISM Code.

The Vietnam Maritime University (VIMARU) and Maritime Technical and

Training School (MTTS) with campuses in Hai Phong and HCMC need
improvement in facilities, training programs, curricula, and instructors. Within
the Master Plan period, they will be given the following equipment at an
estimated cost of US$ 20.9 million:

• Radar simulator with ARPA

• Celestial observation
• Gyro compass training set
• Fire prevention and fire-fighting equipment
• Life-saving apparatus
• Loading calculator for stability training
• Diesel engine plant
• Bilge separation mini-process model
• Electrical and electronic equipment
• Workshop machinery
• Testing and measuring equipment
• Radio communication and GMDSS training set
• Oil tanker operation simulator

Since STCW-95 will be globally applied only up to 1 February 2002, the

related training program with the necessary equipment must be urgently
provided to active seafarers as well as students.

* Proposed Strategies *

• Maritime safety and environmental protection always deserve top priority. It is

noted that there are objective requirements as a member of global maritime
communities in the form of conventions, regional agreements and guidelines.
• To harmonize with those requirements, tapping ODA fund can be justifiable
during the planning period. However, it is important to institutionalize a
“beneficiaries pay” principle.
• To meet the capacity and skill required by the maritime industry, all its
personnel should have the necessary professional and technical knowledge
and competency. For the time being, maritime administration should
concentrate on satisfying the requirements of STCW-95.

I-5-11
Part II

PORTS
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

1 INTRODUCTION

Port development planning is conducted for many potential and existing sites
throughout Vietnam. There are several types and sources of port plans, namely:
authorized plans by the Government’s office, private investment plans proposed
by foreign developers, development plans by provincial governments or local
developers, etc.

In port planning, reliable data on and a rational analysis of past Vietnamese traffic
trends, characteristics of neighboring or developing countries, world trends in port
cargo and maritime transport, among others, are necessary to forecast traffic
volumes. As a second step, the feasibility of the site for port development is
examined. Major factors that need to be studied include the site’s natural condition,
location on the world maritime route, conditions for vessels, accessibility to/from the
hinterland, construction cost, and others. After reviewing these fundamental data,
the priority level of the project is then determined.

Usually, however, relevant data on the above-mentioned items may not be available
or adequate, hence an additional study is often needed. For example, if a
development plan for a new port needs to examine the site’s coastal and marine
conditions and the size of port users in the hinterland and the gathered information
is insufficient, a pre-study will have to be carried out.

In this report, various available planning data on Vietnamese port activities are
referred to and explained.

Based on the site survey and study, the current and future status of Vietnamese
port activities can be summarized as follows:
1) Port traffic at five major ports has smoothly increased since 1991. In 1997, it
suddenly dropped due to the Asian economic crisis but recovered in 1998.
2) Container traffic at Hai Phong port has increased annually both in exports and
imports and has become the prevalent type of cargo. Domestic container has
also increased remarkably.
3) In Ho Chi Minh City (HCMC), container handling volume at New Saigon port
has increased while general cargo at Saigon port has remained roughly at
the same level.
4) Cargo handling productivity in Vietnamese ports is still low and rehabilitation
and improvement of facilities are necessary.
5) Capital investment is centered on major ports especially for rehabilitation.
EDI or modernized management systems have not yet been introduced.
6) The estimated container volume in 2020 is around 7 million TEU, the same
volume recorded in Japan in 1988. This is enough traffic for mother vessels
to directly call at Vietnam ports.
7) Large volumes of bulk cargo, such as fertilizer and rice, will be handled
especially in southern Vietnam. Mechanical loading and unloading systems
should be introduced for efficient operation.

II-1-1
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

2 REVIEW OF PORT STUDIES, PLANS AND PROJECTS

2.1 Past Studies and Recommendations

1) Port of Hai Phong (JICA), September 1993

Name of the study: The Urgent Rehabilitation Plan of Hai Phong Port / The
Master Plan Study on the Transport Development in the Northern Part of the
Socialist Republic of Viet Nam

Result of the study:

Cargo throughput in 1998-2000: 4.7-5.7 million tons
Container throughput in 1998: 150,000 TEU
Channel improvement: Depth – 6m; bottom width – 80-100 m
Length – 38 km; ship size – 10,000 DWT

Major recommendations: Old equipment should be replaced as needed. The

effectiveness of new alignment to determine the degree of sedimentation
should be carefully examined. The major potion of the dredging cost should be
borne by government

2) Port of Cai Lan (JICA), February 1995

Name of the study: The Feasibility Study on Cai Lan Port Construction Project
in the Socialist Republic of Viet Nam

Result of the study: The master plan includes development of port facility – 7
berths, length of 1,461 m and area of 435,950m2 (1 berth existing).

Table 2.1.1
Cargo Volume at Cai Lan and Hai Phong Ports, 2000 and 2010

Year 2000 2010

Hai Phong Port 5,424,000 tons 8,350,000 tons
Cai Lan Port 2,676,000 tons 14,300,000 tons

Major recommendations:
• Cargo demand might be modified according to the new development plan
and policy, if necessary.
• Hon Gai Port, B-12 and small oil jetties should be removed by year 2000.
• Berth No.7 is designated as a grain terminal.
• Based on the preliminary environmental impact assessment (EIA), additional
environmental investigations are required.
• Operations at berth No.1 should begin as soon as possible.

II-2-1
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

3) Coastal Shipping (JICA), March 1997

Name of the study: Master Plan Study on Coastal Shipping Rehabilitation and
Development Project in Vietnam

Result of the study: The Master Plan includes:

• Fleet expansion and modernization
• Ports and waterways development
− 17 key general coastal shipping ports: Hai Phong, Cai Lan, Hanoi, Vi Tri,
Ninh Binh, Danang, Cua Lo, Ha Tinh-Quang Binh, Thuan An, Qui Nhon,
Nha Trang, Saigon, Dong Nai, My Tho, Dang Thap, My Thoi, and Can
Tho
− A total of 710 km sea-cum-riverways
• Coastal shipping management modernization
• Secondary transport improvement program
• Maritime human resources development program
• Maritime safety enhancement and environment protection program

Major recommendations:
• The program on trunk route development for north-south coastal shipping
should be developed.
• The program to meet international requirements should be defined.
• The program on maritime human resources development should be
implemented at the earliest possible time.

4) Central Ports (JICA), August 1998

Name of the study: The Study on the Port Development Plan in the Key Area of
the Central Region in the Socialist Republic of Vietnam.

Result of the study: The Master Plan includes:

• Chan May port: 1 multipurpose berth, 1 deep conventional berth, 5
conventional berths
• Lien Chieu port: 2 container berths, 1 multipurpose berth, 8 conventional
berths
• Dung Quat port: 2 deep tanker berths, 6 coastal tanker berths, 2 bulk berths,
9 coastal vessel berths

The initial stage includes:

• Chan May port: 1 multipurpose berth, 2 conventional berths
• Lien Chieu port: 1 multipurpose berth, 2 conventional berths
• Dung Quat port: 1 deep tanker berth, 2 coastal tanker berths, 4 coastal
vessel berths

II-2-2
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

Major recommendations:
(1) Basic Development Strategy in Central Vietnam
• To avoid possible adverse impacts from drastic and random development,
the target projects need to be critically selected.
• The development schedule should harmonize with local life and culture.
• The initial scale of target projects should be downsized as much as
possible so as not to jeopardize national and regional financial security.
• Private sector participation in development schemes is desirable in
principle but needs to be controlled carefully.

(2) Development of Tien Sa and Lien Chieu Areas at Danang Bay

• Tien Sa does not have enough room for future expansion, making the
development of a large-scale container port difficult from the viewpoint of
cost performance.
• The Tien Sa site is not convenient enough for cargo transportation
from/to the industrial zone of Danang City.

(3) Basic Development Concept of Chan May Port

• The development of a large-scale port in Chan May should be postponed
mainly to ease the current economic burden of the country and the
province. However, it should be noted that the proposed development
will lead to great benefits in the future and should thus be maintained.

(4) Basic Development Concept of Dung Quat Port

• This type of large industrial ports requires a corresponding scale of
exclusive port facilities for both private and public sectors for industrial and
general cargo traffic. To cope with this situation, the project needs to be
supported by public funds to an appropriate extent, so that the project
could be financially sustainable and the industrial location could be
successfully promoted.

5) Central Vietnam (France), September 1998

Name of the study: Transport Master Plan for the Central Region of Vietnam

Result of the study: Feasibility of port projects:

• Qui Nhon: feasible in the year 2004
• Vung Ang: feasible in the year 2010

Major recommendations:
• Assistance to VINAMARINE in developing market oriented management and
operation structures
• Assistance to MOT and VINAMARINE in order to set up private participation
in port construction/extension in Vung Ang and Qui Nhon.

II-2-3
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

6) HCMC (United Kingdom), January 1999

Name of the study: Ho Chi Minh City Transport Study

Result of the study: The throughput of the port complex (million tons per
annum) is shown in the table below:

Table 2.1.2
Estimated Throughput of the Port Complex

Port Complex
Scenario Year
HCMC Thi Vai Vung Tau Total
Scenario 1 2000 10.2 4.7 0.0 14.9
2010 10.2 12.4 22.4 45.0
2020 10.2 29.6 35.2 75.0
Scenario 2 2000 11.8 2.4 0.0 14.2
2010 25.0 6.2 4.8 36.0
2020 25.0 14.8 13.4 54.2
Scenario 3 2000 13.1 1.0 0.0 14.1
2010 25.0 4.0 5.5 34.5
2020 25.0 8.0 18.0 51.0
Note: Scenario 1: Dispersed development-maximizing activity at Vung Tau and Thi Vai River
Scenario 2: Early investment in HCMC
Scenario 3: Maximizing development in situ in HCMC by mproving Soai Rap River

7) World Bank Transport Sector Report, January 1999

Comments: Vietnam’s ports (except some in HCMC) have about five years’
throughput capacity reserves without requiring major new investments. Hence,
government should use this time to:
• assess the likely impact of the Asian economic crisis on its projections of
port traffic and its port investment program:
• review the viability of its industrial and economic development and
investment plans and estimate traffic types and volumes to be generated;
• assess the potential for increasing the throughput capacity and productivity
of existing major maritime ports (with” limited investment”) through port
commercialization/corporatization; improved operational and management
systems, including the introduction of a market-based regulatory and
institutional framework to allow ports to be managed as commercial
enterprises; and
• identify intermodal transport facility requirements, including investments,
timetables, cash flows, and alternate solutions, to handle the additional
traffic created by the planned industrial and economic development.

II-2-4
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

2.2 Ongoing and Committed Projects

Ongoing projects in Vietnam’s port and shipping sector are being funded and
conducted by the WB, ADB, JBIC, French and Belgian ODA. The WB funded the
development of an inland waterway and port in Mekong delta, and ADB provided
funds for Saigon and Red River delta. The JBIC is assisting in ports development
in north and central Vietnam, while France is assisting in funding buoying systems
in Saigon and Hai Phong ports. Belgium, on the other hand, is supporting a study
on the access channel in Bassac River and Hai Phong port as well as a feasibility
study of the latter. Ongoing projects are listed in Table 2.2.1.

Table 2.2.1
Ongoing Projects

Project Funding Amount Implementing Agency

Project Contents
(Year Committed) Agency (Million) (Year Started)
Hai Phong Port JBIC ¥ 3,975 Improving and enhancing facilities to meet VINAMARINE (1995)
Rehabilitation (1993) the rapidly increasing demand for cargo
handling at Hai Phong port
Cai Lan Port JBIC ¥ 10,273 Adding 3 berths to the existing deep-sea VINAMARINE (1997)
Expansion (1995) port located at about 50 km northeast of Hai
Phong.
Coastal JBIC ¥ 1,997 Upgrading the coastal communication VINAMARINE
Communication system in northern Vietnam. GMDSS and
System (1996) microwave satellite communication are
included.
Danang Port JBIC Y 10,000 Rehabilitating existing piers, constructing MOT (1999)
Expansion (1997) breakwater, container terminal and access
bridge, and dredging
Hai Phong JBIC Dredging access channel, constricting VINALINES (1999)
Rehabilitation Phase container berth/terminal
2 (1998)
Saigon Port ADB US$ 30 Rehabilitating the port and providing it with Saigon Port Authority
Rehabilitation new equipment (SPA) (1995)
Saigon Port MIS ADB US$ 0.5 Providing MIS technical assistance to SPA SPA (1995)
Maritime Transport France FF 7.0 Installing buoys on Saigon River and Hai Vietnam Maritime
Phong Port Safety Agency (1990)
Study of the Belgium US$ 1.2 Cooperation in the field of engineering, Haecon, TEDI (1995)
Accessibility to the advisory services for the general study of
Hai Phong Port the port access channel of Hai Phong port
Accessibility Study Belgium US$ 0.7 Feasibility study of the Caimep multipurpose TEDI south (1998)
on Caimep port port terminal in Vung Tau-Thi Vai
Technical and Belgium US$ 1.58 Feasibility study to improve the access Mekong Secretariat
Economic Study on channel to Bassac River (1996)
Bassac River

II-2-5
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

2.3 Government Plan and Policy

Development Plan up to 2010 (MOT/PM)

Based on the current situation of port system in Vietnam and the forecast of
increased cargo volume in the next decade, the MOT has worked out the Master
Plan for the development of ports in Vietnam up to years 2000 and 2010. In the
plan, priority is given to the rehabilitation, improvement and modernization of
existing main ports to handle the increased volume of cargo. The construction of
some deep-sea ports at key economic zones for vessels up to 30,000-40,000 DWT
is also being considered to meet the increased demand of import and export
cargoes generated by the planned economic development.

Vietnam’s port development plan to year 2010 was announced in the “Summary
Report on the Master Plan for Vietnamese Seaport System development to the
year 2010 by MOT” (Hanoi, 31October 1998). The report’s outline is as follows:

1) Objectives, Orientation and the Essential Task of the Plan: Establishing a

system of ports to meet the capacity of 106 million tons and 268 million tons in
years 2003 and 2010, respectively.

2) Vietnamese Port Scale to the year 2010: Table 2.3.1 groups 114 ports and port
sites into eight groups based on cargo throughput.

3) Cargo Throughput by Port: The estimated throughput capacity of each port in

years 2003 and 2010 is given in Appendix A.

Table 2.3.1
Cargo Throughput of Ports up to 2010

Port Group No. of Ports Cargo Throughput (million tons)

and Port Sites To 2003 To 2010
1. Hai Phong, Cai Lan and northern 27 ports and 21.0 – 24.0 59.0 – 69.5
Ports port sites
2. North Central Region (Thanh Hoa, 8 ports 3.5 – 4.5 23.0 – 25.5
Nghe An, Ha Tinh)
3. Mid-central Region (Quang Binh, 11 ports 17.0 – 18.0 34.0 – 36.5
Quang Ngai)
4. South Central Region (from 11 ports and 3.0 5.0 - 6.0
Binhthuan to Phuyen) port sites
5. HCMC – Vung Tau – Thi Vai 42 ports 34.0 – 38.0 84.0 – 98.0
6. Mekong River Delta 14 ports 5.5 – 6.5 9.0 – 11.0
7. Phu Quoc and southwestern islands 2 ports Fishing fleet and Cargo and passenger fleet
8. Con Dao passenger transship- potential to build inter-
ment national transshipment port

II-2-6
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

Development Plan up to 2020

The “Port Development Plan up to the year 2020“ was provided by the TDSI. Its
port development policy is basically the same as that of the plan up to year 2010.
The document is summarized as follows:

1) Trend of Port Traffic

Table 2.3.3
Port Traffic up to 2020
(Ton)
2000 2010 2020
North
20,000,000 50,000,000 122,000,000
Central 10,500,000 50,000,000 86,000,000
South 36,000,000 103,000,000 187,000,000
TOTAL 66,500,000 203,000,000 395,000,000
Sources: TDSI and VINAMARINE (1996)

Table 2.3.4
Increase Rate of Port Traffic

2000-2010 2010-2020
North 10 % 9%
Central 17 % 6%
South 11 % 6%
TOTAL 12 % 7%

2) Investment in Port Development

Table 2.3.5
Investment Capital for Port Development
(VND Bil.)
Up to 2000 Up to 2010 Up to 2020 Total
North 878 3,185 6,315 10,378
Central 819 4,353 4,710 9,882
South 4,395 6,875 6,205 17,475
TOTAL 6,092 14,413 17,230 37,735

Capital investment by port is in Appendix A

3) Improvement Plan for Sea Channel

The ports of Hai Phong, Cua Lo, Le Mon, Gianh, Song Han, Vung Tau, Go Dau,
and those in Mekong Delta, as well as Dong Nai petroleum port, need annual
dredging for convenient and suitable navigation.

II-2-7
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

3 CURRENT SITUATION

3.1 Port Administration and Management

The Vietnamese maritime subsector is under the MOT. Within the MOT, ports fall
under two organizations – VINAMARINE for seaports and Vietnam Inland
Waterway Administration (VIWA) for river ports. Port management, however, falls
under the following six authorities:

1) VINAMARINE, MOT

VINAMARINE manages three ports, namely, Nghe Tinh Port, Qui Nhon Port
and Nha Trang Port.

2) VINALINES

VINALINES was established in January 1996 as the general company that is

responsible for state-owned corporations in the shipping industry. When
VINALINES was formed under Decision No. 250/Ttg by the Prime Minister,
the management of Hai Phong and Saigon ports was transferred to
VINALINES from VINAMARINE.

VINALINES undertakes the following activities:

• shipping, port operation, maritime services, and other maritime-related
business,
• export/import of specialized materials, equipment and labor deployment,
and
• participation in joint-venture shipping companies with foreign and domestic
partners and implementation of other businesses and tasks assigned by
government.

3) Local Governments

Around 20 existing general ports are managed by local governments. Of

these, cities manage three ports (Cua Cam Port by Hai Phong, Ben Nghe and
Binh Duong ports by HCMC). Some provincial ports are handling a
considerable volume of cargo.

4) State-owned Corporations under Other Ministries

State-owned corporations organized and operated by other central government

ministries have many specialized ports. The representative ports are listed in
Table 3.1.1.

II-3-1
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

Table 3.1.1
Specialized Ports under Other Ministries

Responsible Ministry Ports Operations

Ministry of Industry Cam Pha Port Loading of coal from Hong Gai mine for
Hong Gai port export and domestic markets
Dien Cong port

Phai Lai Port Unloading of imported coal and oil for

domestic power plants
Ministry of Trade B 12 Port Unloading and d distribution of imported
My Khe Port refined oil for domestic market
Nha Be Port
Ministry of Agriculture & Nha Be Vegetable Loading of main agricultural products
Rural Development Port such as rice, etc, for export
Ministry of Construction Chin Phong Port Handling of construction materials, i.e.
Hoang Thach Port cement, sand, gravel
Nghi Son Port
Kien Luong Port

5) Public corporations under the local government

Like state-owned corporations, some publicly owned corporations under the

control of provinces and cities have specialized ports, for example, Hong Khoi
Port is managed by a salt company under the control of Khanh Hoa Province.

6) Other Public Ports

It should be noted that New Saigon Port does not belong to any of the above
categories since the management body is the Ministry of Defense, yet the port
itself functions as a general port.

7) Private Sector

A joint-venture port project between foreign (French and Norway) and local
Vietnamese investors commenced operation in 1996. Ba Ria Serece Port at Phu
My was the first Vietnamese port to have private participation. VICT is the
second. It is a joint venture of Singaporean, Japanese and Vietnamese state
corporations. It is located just beside Tan Thuan Industrial Zone in HCMC and
commenced operation in November 1998.

3.2 Existing Port System

Vietnam’s 3,200-kilometer coastline can be divided into three parts – north,

central and south – to describe the existing port system. In each part, there are
major public, subordinate, industrial, and private ports (refer to Figure 3.2.1).

II-3-2
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

• In the north, Hai Phong port has functioned as a gateway port ever since its
operation in 1876 with only a 60-meter long quay. Its physical nature as a river
port, however, hardly allows large vessels of more than 7,000 DWT to dock.
The port also requires substantial and continuous dredging works to maintain
its access channel. Under such circumstances, Cai Lan port, 40 km northeast
of Hai Phong, was proposed as an alternative deep-sea port in the first master
plan done in 1970 by the USSR. After several revisions of the port
development plan, three berths are now additionally being constructed to the
existing single berth. In the course of planning, designing and construction,
however, there is an increasing awareness to preserve the precious
environment of Ha Long Bay.

Headed by Hai Phong port, a local port network can be observed involving
small river ports like Ninh Phuc, Hanoi, Viet Tri, and Nam Dinh. Industrial ports
for coal, cement and oil are located separately along the coast and river.

• In the central region, Danang port has functioned as a gateway port since the
country’s unification. Its Tien Sa jetties can accommodate vessels with 30,000
DWT. The existing facilities at Danang port are being expanded through the
construction of a container pier (adjacent to the Tien Sa jetties). The port
development, however, will have to overcome present problems like high
waves, narrow cargo handling areas and a weak access road to the city
center. Moreover, due to the small population and insufficient number of
industrial establishments in the hinterland, the port’s throughput is far behind
that of Hai Phong and Saigon ports.

There are three more major seaports (i.e., Cua Lo, Qui Nhon and Nha Trang)
dotting the long central coastline. With port improvement and/or additional
infrastructure, these ports can receive vessels with 10,000 DWT throughout
the year. However, the current traffic demand may not justify large
investments in these ports. It needs industrial boom towns and
transshipment/transit ports at many places, such as Vung Ang, Chan May,
Lien Chieu, Dung Quat, Van Phong, etc., to generate sufficient traffic demand.
Despite the present limited traffic demand, however, port development is very
active in the region. When the regional economic crisis ends, it would be
essential to carefully review the viability, timing and location of
proposed/ongoing port projects in this area.

• In the south, Saigon River is the busiest navigational route where numerous
ports are located. It accommodates various kinds of vessels and barges up to
20,000 DWT, which however is not enough for overseas shipping activities.
Saigon port, established in 1860, is the most important port of the country.
However, since it is located in the center of Ho Chi Minh City, it can hardly
modernize due to narrow cargo-handling space on land and congested traffic
in the city. Due to these factors, the Vung Tau-Thi Vai port area is becoming a
crucial port.

II-3-3
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

There are many private ports and a few small public ports currently operating
in the area, except for the alternate Saigon port project. Similarly, many ports
are distributed in the Mekong delta. Among them, the largest and most
promising is the Can Tho port which, after its rehabilitation and expansion, will
enable direct exports of agricultural and fishery products to neighboring
countries. Endowed with a developed inland waterway network, other delta
ports, such as Vinh Thai, Cao Lanh, My Tho, Nam Can, My Thoi, etc., can be
made more accessible to Can Tho port and the HCMC port groups.

II-3-4
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

Figure 3.2.1
Ports in Vietnam

II-3-5
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

3.3 Infrastructure

The combined berth length of the three major ports accounts for about 36% of the
country’s total berth length. One of these ports, Hai Phong, has undergone several
expansion and improvement projects since beginning operations in 1876. It has a
limited port area, a channel length of 38 km and a depth of only 4.2 meters. It can
only accommodate vessels of 10,000 DWT or less even during high tide. Its berth
occupancy rate is 60%, according to port management. This can be mainly attributed
to the port’s use of ship’s gears instead of port cranes in handling cargoes.
Moreover, the port is equipped with old equipment such as Kondor cranes, old
American-made floating crane, old Russian-made Kirov jib cranes, mobile cranes,
tug boats, etc., most of which are not suitable for handling containerized cargoes.

The facilities of Danang port are almost in the same condition. With an ideally
deep channel of 11-12 meters, the port can accommodate vessels of 30,000
DWT. This port handled 40-50% of the total cargo throughput in the area.

Saigon port, being in the center of HCMC, cannot function effectively because of
a lack of land and congested road network. Being a river port where the average
depth of the channel is 9 meters, this port can accommodate vessels up to
25,000 DWT. Besides serving the whole area of Ho Chi Minh City and Mekong
delta, this port is also important to the economic development of Ba Ria-Vung
Tau province.

Table 3.3.1
Port Facilities in Vietnam

Berth Length Berth Area Storage Area Terminal Area

Owner 2 2 2
(m) (m ) (m ) (m )
1. MOT 8,267 137,827 183,585 780,590
2. Province 2,288 48,993 52,420 170,400
3. Joint Venture 2,059 35,977 81,542 76,823
4. Other 7,544 85,500 525,947 1,156,113
Ministries
TOTAL 20,154 307,797 843,494 2,183,926
Source: MOT-TDSI, 1998

II-3-6
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

Box 3.3.1
Required Water Depth as Function of Vessel Draft

1/
Draft Vessel Size (DWT) Water Depth (in
(m) Cargo Bulker Container Tanker addition to draft)
2.0 + 0.5
3.2 1,000 + 0.5
4.0 2,000 + 0.5
5.0 2,500 + 0.5
6.0 5,000 (6.4-7.0) 3,000 + 0.6
7.0 5,000 10,000 (7.5) 10,000 (7.3) 5,000 + 0.6
8.0 10,000 5,000 (8.5) 10,000 (7.8) + 0.6
9.0 15,000 (9.2) 20,000 (9.3) 20,000 (9.2) + 0.6
10.0 20,000 25,000 (10.1) 20,000 (9.8) + 0.6
11.0 25,000 (10.7) 40,000 (11.5) 30,000 (10.7) 30,000 (10.8) + 0.6
30,000 (11.3) 35,000 (11.1)
12.0 35,000 45,000 (12.2) 40,000 (11.8) + 1.0
50,000 (12.5) 50,000 (12.6) Panamax
13.0 40,000 (12.5) 60,000 (12.8) 55,000 (12.8) 60,000 + 1.0
60,000 (13.2)
65,000 (13.5) 70,000 (13.5) Post Panamax
14.0 80,000 70,000 (13.8) 80,000 + 1.5
15.0 100,000 (15.3) 100,000 (15.1) + 1.5
16.0 125,000 + 1.5
17.0 125,000 (16.5) 150,000 + 1.5 Capesize
Source: PIANC for first five columns.
1/ Water depths are given for smooth waters. Add 1.0 m instead of 0.6 m for rocky bottom. Add 1.5-2 m to
draft from ships at SPMs.

Table 3.3.2
Facilities in the Three Main Ports

Berth Type of Ship Accommodated at Berth

Port Terminal Length Max. Size Cargo Handled
(m) (DWT)
Hai Phong Hoang Dieu 1,300 10,000 General, Bagged, Bulk
2
Total storage: 431,800 m (conventional)
Jib Cranes: 35 Hoang Dieu (container) 410 10,000 Container, General, Metal
Reach-Stackers: 7 Vat Cach 311 10,000 General, Bagged, Bulk, Metal
Floating Cranes: 2 Doan Xa 200 10,000 General, Bagged, Bulk, Liquid
Chua Ve 335 10,000 Container, General
Danang Tien Sa 732 30,000 Container, Passenger
2
Total storage: 186,225 m Song Han (1,2) 235 5,000 Container, Passenger
Mobile Cranes: 16 Song Han (3,4,5) 465 3,000 General, Passenger
Forklift, Reach-S: 16 Song Han (6,7,8) 273 General
Saigon Nha Rong 689 30,000 General, Passenger
2
Total storage: 500,000 m Khanh Hoi 1,389 General, Passenger
Mobile Cranes: 2 Khanh Hoi B 140 Bulk
Jib Cranes: 7 Tan Thuan 713 Roro, Container, Bulk
Forklift, Reach-S: 86

II-3-7
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

3.4 Traffic Demand

Port Traffic Volume and Characteristics

The “Statistical Yearbook, 1997” shows the port traffic volume since 1991. Before
this year, it is believed that port traffic was greatly influenced by trade with
communist countries. Therefore data after 1991 is reasonable for future
estimation. Since 1991 the annual growth rate has exceeded 10% in five
occasions while a minus growth was registered only once (1997). Overall,
Vietnamese port traffic is demonstrating smooth growth (see Table 3.4.1 and
Figure 3.4.1).

Table 3.4.1
Port Traffic in Major Ports
(tons)
Port 1991 1992 1993 1994 1995 1996 1997 1998
Hai Phong 2,433,400 2,378,200 2,706,300 3,249,000 4,515,000 4,809,000 4,600,000 5,442,000
Saigon 4,159,600 5,004,000 5,508,600 6,438,600 7,212,000 7,340,000 6,821,000 7,700,000
Quang Ninh 424,600 718,900 683,000 521,000 704,000 813,000 820,000 1,011,300
Nghe An 126,200 132,900 182,200 305,500 310,000 462,000 480,000 473,600
Danang 260,500 313,300 371,900 666,700 830,200 847,900 882,000 829,000
Quy Nhon 300,400 335,000 411,800 403,000 447,000 554,700 838,000 953,900
Nha Trang 148,000 154,500 181,000 214,000 343,400 426,000 424,000 485,000
Can Tho n.a n.a n.a 65,800 125,900 183,200 202,000 332,300
TOTAL 7,852,700 9,036,800 10,044,800 11,863,600 14,487,500 15,435,800 15,067,000 17,227,100
Growth 15% 11% 18% 22% 7% -2% 14%
Rate (%/yr)
Sources: Statistical Yearbook, 1997 and Annual Report by VINAMARINE, 1999

Figure 3.4.1
Cargo Volume in Major Ports

18,000.0
16,000.0
14,000.0 Total
12,000.0
Ton Foreign
10,000.0
Export
8,000.0
Import
6,000.0
4,000.0 Domestic
2,000.0
0.0

Year

II-3-8
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

Regarding throughput at ports, the total volume in 1998 was estimated at 56.558
million tons, 41% of which was liquid cargo, 45% dry and 16% transit. The
component share among the 10 main ports was about 42%, with Saigon handling
the largest volume (14%), followed by Hai Phong (10%) and New Saigon Port
(7%) (see Table 3.4.2).

Vietnamese import volume has been larger than export except in 1992. Foreign
trade volume has exceeded domestic trade volume except in 1991 at Haiphong
and HvHHHHHai Phong and 1996 at Can Tho (see Table 3.4.3).

Based on the trend of cargo handling at Saigon and Hai Phong ports, cement
and fertilizer are the commodities shipped to Saigon from Hai Phong and foreign
ports, while rice is the commodity that Hai Phong needs from Saigon.
Concerning general cargo, the volume handled (loaded and unloaded) at Hai
Phong port is greater than that of Saigon (refer to Table 3.4.4 and Figure 3.4.2)

Table 3.4.2
Shipping and Port Traffic

1998 1999 Projection

Target %
000 tons 000 tons
1. Maritime transportation (total output) 12,845 13,872
• Foreign transportation 9,440 73 10,196
• Domestic transportation 3,405 27 3,670
• Liquid cargo 2,480 19 2,700
2. Throughput at ports 56,558 61,082
Liquid cargo 22,913 41 24,750
Dry cargo 25,599 45 27,650
Transit cargo 8,770 16 9,295
Container (TEU) 791 859
Passenger (No.) 44 60,000
3. Major Enterprises
• Transport enterprises of VINALINES 6,870 7,420
- Foreign transportation 4,877 5,267
- Domestic transportation 1,994 2,153
• Ports 5,442 10 5,832
- Hai Phong Port 7,700 14 7,992
- Saigon Port 1,011 2 1,082
- Quang Ninh Port 474 1 511
- Nghe Tinh Port 829 1 877
- Danang Port 954 2 1,045
- Quy Nhon Port 485 1 500
- Nha Trang Port 332 1 329
- Can Tho Port 4,199 7 4,250
- New Port Saigon 2,092 4 2,260
- Ben Nghe Port 12,845 13,872
Source: VINAMARINE Annual Report in 1999

II-3-9
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

Table 3.4.3
Port Traffic at Major Ports

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
All Ports Total 7,632.1 7,684.4 7,384.6 8,473.5 9,269.9 11,940.8 13,330.2 13,994.0 13,291.6 15,510.4
Foreign 6,097.9 6,032.7 5,227.4 6,600.1 7,641.4 10,348.5 10,926.7 11,086.7 10,415.8 11,660.4
Export 3,043.2 2,919.4 2,520.1 3,589.6 3,523.8 4,648.7 3,464.5 4,109.0 4,284.4 4,624.1
Import 3,054.7 3,113.3 2,707.3 3,010.5 4,117.6 5,699.8 7,462.2 6,977.7 6,131.4 7,036.3
Domestic 1,534.2 1,651.7 2,157.2 1,873.4 1,628.5 1,592.3 2,403.5 2,907.3 2,875.9 3,850.0
Hai Phong
Total 2,724.5 2,516.0 2,433.3 2,378.1 2,706.3 3,249.8 4,516.0 4,809.6 4,588.2 5,445.7
Foreign 1,819.2 1,500.8 1,030.1 1,230.4 1,591.7 2,143.0 2,856.0 3,095.0 3,050.2 3,468.0
Export 751.0 524.4 408.9 381.5 415.6 440.8 494.0 654.6 803.1 850.0
Import 1,068.2 976.4 621.2 848.9 1,176.1 1,702.2 2,362.0 2,440.5 2,247.0 2,618.0
Domestic 905.3 1,015.2 1,403.2 1,147.7 1,114.6 1,106.8 1,660.0 1,714.6 1,538.0 1,977.7
Danang
Total 566.9 430.3 260.4 313.3 371.9 666.7 830.3 847.9 882.2 1,119.7
Foreign 502.5 363.2 196.6 226.2 280.4 609.3 781.1 780.2 713.2 938.8
Export 175.1 107.5 69.6 62.7 69.4 119.5 149.5 198.2 279.7 469.3
Import 327.4 255.7 127.0 163.5 211.0 489.8 631.6 582.1 433.5 469.6
Domestic 64.4 67.1 63.8 87.1 91.5 57.4 49.2 67.7 169.0 180.8
Saigon
Total 4,048.3 4,347.2 4,159.6 5,003.9 5,508.6 7,438.5 7,211.0 7,339.8 6,820.5 7,601.5
Foreign 3,559.4 3,875.5 3,508.8 4,407.4 5,087.4 7,019.9 6,567.0 6,489.9 6,040.6 6,460.1
Export 2,015.7 2,085.6 1,625.8 2,495.9 2,359.6 3,551.7 2,308.0 2,691.8 2,766.1 2,865.6
Import 1,543.7 1,789.9 1,883.0 1,911.5 2,727.8 3,468.2 4,259.0 3,798.1 3,274.5 3,594.6
Domestic 488.9 471.7 650.8 596.5 421.2 418.6 644.0 850.0 779.9 1,141.3
Quang Ninh
Total 214.8 298.2 424.6 718.8 683.1 520.0 647.0 813.5 798.4 1,011.3
Foreign 157.3 205.6 389.9 699.3 681.9 518.6 633.0 631.7 431.1 507.9
Export 67.1 158.1 368.8 618.9 679.2 492.6 447.0 491.2 322.0 230.9
Import 90.2 47.5 21.1 80.4 2.7 26.0 186.0 140.6 109.1 276.9
Domestic 57.5 92.6 34.7 19.5 1.2 1.4 14.0 181.8 367.3 503.5
Can Tho
Total 77.6 92.7 106.7 59.4 n.a 65.8 125.9 183.2 202.3 332.3
Foreign 59.5 87.6 102.0 36.8 n.a 57.7 89.6 89.9 180.7 285.7
Export 34.3 43.8 47.0 30.6 n.a 44.1 66.0 73.3 113.4 208.4
Import 25.2 43.8 55.0 6.2 n.a 13.6 23.6 16.5 67.3 77.3
Domestic 18.1 5.1 4.7 22.6 n.a 8.1 36.3 93.3 21.6 46.6
Sources: MOT (1989-1997), VINALINES (1998)

II-3-10
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

Figure 3.4.2
Port Cargo by Major Commodity at Saigon and Hai Phong Ports
Import at Saigon Import at Haiphong
1,400,000 1,200,000
1,200,000 1,000,000
1,000,000
800,000 800,000
ton

600,000

ton
600,000
400,000
400,000
200,000
0 200,000
1996 1997 1998
0
Year 1996 1997 1998
Cement Clinker
Year
Container of General cargo Others
Metal Food
Fertilizer Container of General cargo Metal Fertilizer

Discharging at Saigon Discharging at Haiphong

600,000 600,000

500,000 500,000

400,000
400,000
ton

300,000
ton

300,000
200,000
200,000
100,000
100,000 0
0 1996 1997 1998
1996 1997 1998 Year
Year General cargo Others
Food Metal
Cement Clinker Others Coal Construction Material

Export at Saigon Export at Haiphong

3,000,000 800,000
700,000
2,500,000
600,000
2,000,000
500,000
ton

ton

1,500,000 400,000

1,000,000 300,000
200,000
500,000
100,000
0 0
1996 1997 1998 1996 1997 1998
Year Year

Container of General cargo Rice Container of General cargo Others

Loading at Saigon Loading at Haiphong

250,000 600,000

200,000 500,000

400,000
150,000
ton

ton

300,000
100,000
200,000
50,000
100,000

0 0
1996 1997 1998 1996 1997 1998
Year Year
Rice Others Cement Others

II-3-11
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

Table 3.4.4
Import and Export at Saigon and Hai Phong Ports

Saigon Hai Phong

1996 1997 1998 1996 1997 1998
Total 7 339 828 6 820 520 7 601 463 4 809 620 4 588 189 5 445 699

Imported Cargo 3 798 100 3 274 462 3 594 554 2 440 461 2 247 019 2 618 004
General cargo 112,814 51,312 104,225 31,754 29,300 80,672
Cement 789,668 395,888 9,891 - - -
Clinker 397,142 550,178 186,038 84,051
Container 522,530 586,226 815,517 758,623 887,093 981,088
Empty Container 119,017 147,837 188,711 - - -
Paper 23,777 12,470 - - - -
Others 190,645 179,303 313,416 65,044 43,692 35,882
Medical products 121,026 124,802 102,303 80,344 45,712 59,145
Metal 537,533 358,816 439,641 661,973 537,539 710,438
Food 218,210 266,299 195,667 35,156 9,873 11,361
Machine 50,658 41,758 33,355 116,372 67,273 54,368
Bitumen - 530 - 39,114 58,429 31,360
Fertilizer 664,774 527,803 1,200,290 568,030 525,165 584,912
Metal ore - - - - 42,943 68,778
Plaster 50,306 31,240 5,500 - - -

Unloaded Domestic Cargo 456 788 580 533 878 023 1 114 693 616 007 894 156
General cargo 14,731 7,561 30,954 53,048 91,624 48,481
Cement 76,301 358,281 525,433 2,905 2,398 39,706
Clinker 216,404 58,497 118,396 1,633
Others 67,000 90,943 148,948 179,231 142,887 208,170
Coal 82,352 65,251 54,292 7,548 990 1,825
Container - - - 124 3,109 79,526
Agriculture products 36,643 30,060 56,458
Fertilizer - - - 29,770 11,124 62,298
Food - - - 532,259 90,967 209,920
Metal - - - 100,548 50,090 42,583
Construction Material 172,617 192,758 143,556

Exported Cargo 2 691 771 2 766 146 2 865 577 654 564 803 141 849 967
General cargo 1,528 16,116 8,939 8,840 6,466 1,963
Container 200,113 303,217 335,106 550,430 689,785 738,431
Empty Container 109,450 121,823 120,917 - - -
Rice 2,173,096 2,118,621 2,391,535 - - -
Others 99,350 105,476 9,080 49,891 60,685 69,771
Metal ore - - - 45,403 37,085 450
Construction material 9,120 39,352
Agriculture products 108,234 100,893 - - - -

Loaded Domestic Cargo 393 169 199 379 263 309 599 902 922 022 1 083 572
General cargo 19,107 19,801 21,627 49,274 31,347 31,911
Rubber 28,488 32,472 14,474 - - -
Rice 237,619 19,880 88,007 - - -
Container - - - 2,198 3,092 85,594
Metal - - - 73,293 98,627 102,058
Fertilizer - - - 45,273 90,637 114,826
Cement - - - 233,538 440,085 531,782
Others 107,955 127,226 139,201 196,326 258,234 217,401
Source: VINALINES

II-3-12
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

3.5 Finance and Management

Role of Port Office

The port office has two functions, i.e., administration and service, and it consists
of the following sections:

Administration: General and Personnel Affairs, Development Planning, Port

Operation, Accounting, Technical Service, etc.
Services: Contracted out to stevedoring, warehousing and machinery
maintenance enterprises

Therefore, a port office is responsible for:

• All undertakings regarding port facilities and equipment, covering construction,
purchase, maintenance, and repair;
• Formulation of implementation programs for port development and
management;
• Port finance;
• Provision of cargo handling and storage services;
• Determination and collection of port charges;
• Security within port areas; and
• Dredging work in the port.

Annual Reports by VINAMARINE and VINALINES

Capital investment in VINAMARINE reached VND 108,375 million in 1998,

representing 26% of total investment of all sectors. Eighty-three percent (83%) of
this or VND 89,575 million was used to implement projects (refer to Table 3.5.1).

The financial report of VINALINES revealed that planned investment in

construction in 1998 was almost realized. Investment in equipment was less than
planned – only 71% in Hai Phong projects, 70% in Saigon project and 75% as
additional capital (refer to Table 3.5.2).

In addition, the turnover in 1998 exceeded the planned level in all ports except
Quang Ninh port. Overall, the contribution to state budget by the port sector was
double that of the shipping sector (refer to Table 3.5.3).

II-3-13
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

Table 3.5.1
Financial Report of Maritime Enterprises
(VND million)
Projected Plan Approved
Target
in 1998 in 1999 in 1999
I Estimates of State budget
(1) Sea port authorities
Total receipts 112,000 122,000
Total expenses 23,000
Budget contribution 89,000
(2) Maritime safety
a. Total Receipt 195,288 200,000
Repairs and Maintenance)
(3) Coastal radio station
Total receipts 3,000 8,900 900
Budget expenses 3,000 8,900 900
(4) Training
Total receipts 7,375 13,000 6,610
Budget 7,050 12,844
Extensive training 300 156
Total expenses 7,350 13,000
(5) Administration
Total expenses 2,865 2,270 2,410
(6) Research and rescue 8,450 3,450
Expenses 4,214 8,450 3,450
II Capital construction
(1) Total investment of all Sectors 424,000
Domestic capital funding 119,000
Foreign capital 305,000
Of which distributed to Vinamarine 108,375 260,390
Planning engineering 300
Pre-investment costs 1,500
Implementation of project 89,575 259,690
(2) * Group A project 85,310 248,690
Cai Lan Port 61,310 155,000
- Domestic capital 10,000
- Foreign capital 14, 000
Coastal radio station 24,000 93,690
- Domestic capital 5,000
- Foreign capital 88,690
(3) * Group B project 4,050 11,000
Rehabilitation of Nghe Tinh Port 4,000 8,000
Rehabilitation of Qui Nhon Port 2,000
Facilities of State management 1,000
Budget contribution
(4) Discounted payback 3,000
(5) Islands projects-Total investment 6,000 8,000
Source: VINAMARINE – Annual Report 1999

II-3-14
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

Table3.5.2
Estimated Capital Investment for Construction in 1998
(VND million)
Annual plan Estimated 1998’s fulfillment Achievements

Target In which In which In which

Total Cons - Equip- Total Cons- Equip- Total Cons- Equip-
truction ment truction ment truction ment
Total 493,249 263,732 207,000 448,009 268,792 162,903 91% 102% 79%
1.State budget funding 125,600 103,033 108,290 152,792
- Domestic capital 67,600 55,033 63,788 108,290
- Foreign capital 58,000 48,000 44,502 44,502
2.Borrowed capital 187,649 75,649 112,000 151,268 71,365 79,903
3.Credit with preferred rate 55,000 55,000 53,000 53,000
of interest
4.Commercial credit
5.Mobilized capital 125,000 85,000 40,000 115,500 85,500 30,000
6.Recapitalization of
amortization
7.Other sources 4,000 3,900 2,350 2,350

CAPITAL INVESTMENT IN CONSTRUCTION

1.Hai Phong Port Project 136,000 57,853 62,000 113,244 53,596 44,744 83% 92% 71%
- Domestic capital 16,000 9,833 13,913 9,094
- Foreign capital 120,000 48,000 62,000 99,330 44,502 44,744
(In which budget capital) (58,000) (48,000) (44,502) (44,502)
2.Saigon Port Project 150,649 95,649 55,000 130,159 95,000 35,159 86% 95% 70%
- Domestic capital 25,000 20,000 19,998 19,998
- Foreign capital 125,649 75,649 50,000 106,524 71,365 35,159
- Other capital 3,636 3,636
3.Tan Thuan Project 12,000 11,500 16,431 15,931 136% 138%
(domestic capital)
4 Danang Port Project 12,000 11,700 16,725 16,425 139% 140%
(domestic capital)
5.Additional capital 125,000 85,000 40,000 115,500 85,500 30,000 92% 100% 75%
6.Others 2,000 2,000 2,350 2,340 117% 115%
7.Capital construction 600 600 100%
funding
Source: VINALINES – Annual Report in 1999

II-3-15
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

Table 3.5.3
Estimated Business Results in 1998

Profit, Loss Contribution to State Budget

Turnover (VND mil.)
(VND mil.) (VND mil.)
Subsidiary Enterprise Esti- Compare Esti- Com- Esti- Compare
Plan Actual % Actual Plan Actual %
mated mated pare mated
1998 1997 1997 1998 1997
1998 1997 1998 1998 1997 1998 1997 1998
1 VN shipping Co. 440,000 463,398 462,500 100% 105% 3,426 8,000 234% 10,000 8,874 12,000 135% 120%

2 Maritime shipping Co. 90,000 76,020 98,784 130% 110% 1,423 3,300 232% 3,500 2,695 4,300 160% 123%
No. III
3 VN Oil Transport Co. 150,000 122,647 156,404 128% 104% 4,593 520 11% 7,500 7,960 7,266 91% 97%

4 VITRANSCHART 250,000 241,080 264,878 110% 106% 2,199 1,202 55% 9,000 9,149 9,589 105% 107%

5 Ocean-River going Corp. 35,000 30,215 35,989 119% 103% -4,746 0 700 74 734 109% 105%

6 Northern Shipping Co. 17,000 21,689 16,511 76% 97% 30 33 110% 500 633 417 66% 83%

7 VINALINES fleet 151,300 103,849 178,479 172% 118% 1,017 1,000 98% 3,000 2,783 4,453 160% 148%

TRANSPORTATION
1,133,300 1,058,898 1,213,545 115% 107% 7,942 14,055 177% 34,200 32,768 38,759 118% 113%
SECTOR TOTAL
8 Hai Phong Port 280,000 263,963 284,500 108% 102% 42,575 49,974 117% 34,000 34,048 34,263 101% 101%

9 Quang Ninh Port 20,200 14,251 19,918 140% 99% 813 870 107% 2,000 1,347 1,603 119% 80%

10 Saigon Port 380,000 378,831 380,000 100% 100% 57,541 57,532 100% 40,000 39,622 40,000 101% 100%

11 Danang Port 44,200 45,461 50,000 110% 113% 4,102 4,500 110% 3,200 3,757 4,000 106% 125%

12 Can Tho Port 7,300 5,869 8,600 147% 118% 665 1,200 180% 680 679 947 139% 139%

PORT SECTOR
731,700 708,375 743,018 105% 102% 105,696 114,076 108% 79,880 79,453 80,813 102% 101%
TOTAL
13 VOSCO 100,000 109,597 109,718 100% 110% 19,872 19,099 96% 26,400 27,224 29,570 109% 112%

14 Northern container Co. 28,000 24,420 32,000 131% 114% 2,483 2,800 113% 2,400 2,355 2,500 106% 104%

15 Southern Container Co. 36,000 34,961 41,550 119% 115% 7,701 11,300 147% 7,000 9,761 7,000 72% 100%

16 Shipping supply Co. No. I 6,000 2,369 6,823 288% 114% -38 -765 500 521 345 66% 69%

17 Southern Shipping Co. 4,000 2,885 3,795 132% 95% 0 116 20 515 334 65% 64%

18 Southern Petrol 7,100 4,469 8,000 179% 113% 246 106 43% 850 671 850 127% 100%
Supply Co.
19 INLACO 15,000 14,549 15,250 105% 102% 150 850 567% 750 565 764 135% 102%

20 Southern INLACO 57,000 46,931 58,160 124% 102% 10,719 11,530 108% 10,000 8,690 13,300 153% 133%

21 Shipping Development 21,000 19,992 21,300 107% 101% 2,496 2,800 112% 3,100 2,496 3,300 132% 106%
Co.
22 Maritime Informatics & 2,000 1,450 1,600 110% 80% 2 5 250% 45 41 52 127% 116%
Techno. Co
23 HP Shipping supplies & 5,000 4,407 5,020 114% 100% 201 200 100% 760 793 833 105% 110%
Exp.-Imp co.
24 Southern Shipping 600 562 315 56% 53% 38 60 158% 85 84 58 69% 68%
Supplies & Exp.-Imp
25 Maritime Trade Center I 1,500 1,476 1,318 89% 88% 30 22 73% 60 47 32 68% 53%
26 Maritime Trade Center II 1,800 1,608 3,833 238% 213% -216 -361 240 227 251 111% 105%
27 Maritime Industrial 6,000 5,789 6,000 104% 100% 20 50 250% 111 67 115 172% 104%
Service Co.
SERVICE SECTOR
291,000 275,465 314,682 114% 108% 43,704 47,812 109% 52,821 54,057 59,304 110% 112%
TOTAL
VINALINES GRAND
2,156,000 2,042,738 2,271,245 111% 105% 157,342 175,943 112% 166,901 166,278 178,876 108% 107%
TOTAL
Source: VINALINES – Annual Report in 1999
Note: Data collected through interviews with enterprises from 20 December to 26 December 1998.

II-3-16
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

4 DISCUSSIONS ON KEY PLANNING ISSUES

4.1 Assessment of Existing Port Capacity

Several types of ports are handling general cargo. Ports managed by the MOT
usually handle public cargo while private ports serve limited users. In this section
the capacity of the 89 ports is analyzed.

The total capacity of general ports in 1998 is 36.2 million tons – 6.6 million tons in
northern ports, 7.2 million tons in central ports and 21.2 million tons in southern
ports. In the same year, general cargo volume handled by these ports is
estimated at 28.1 million tons – 6.6 million tons in northern ports, 3.4 million tons
in central ports and 18.0 million tons in southern ports.

Compared with neighboring countries, Vietnam’s general ports are comparatively

small. The eight major general ports have shallow water depth ranging from five
to 11 m. Their combined length of berth of 8,267 m is, for example, roughly equal
to that of Tanjung Priok Port (8,911 m), Port Klang (8,648 m) and Manila Port
(7,592 m). But this is to be expected of gateway ports; modern berths for
exclusive containers and 30,000 DWT vessels or larger are necessary to
accommodate international transport chains.

Besides port capacity, the following weaknesses of Vietnamese ports must be

pointed out:
• Port operation is unreliable. There are several factors which contribute to this
bad reputation: limited navigable time, non-availability or lack of well-
maintained cargo-handling equipment, lack of trained port labor, inadequate
supervision and management, and lack of incentives and unclear port
charges1. Foreign operators face difficulty in giving “dispatch money” to port
labor and management to achieve faster results.
• Ships must sail with insufficient ATNs and SAR services. In fact, there is still a
“black sea” on Vietnamese waters where no visual aid is available. Meanwhile,
the Vietnam Maritime SAR Coordination Center does not possess any SAR
fleet and oil spill protection equipment.
• Proper attention has not been given to policy setting in port development,
allowing implementation to go unguided by an overall policy on the subsector.
Port construction randomly done wastes precious funding sources. Major ports
cannot expand facilities by self-financing from port charges or relying on
external resource and technology alone.

1
One state-owned operator reported that in 1998 they suffered from demurrage of 1,122 days
from operating 21 general cargo vessels, mainly due to wasteful waiting time for high tide and
poor cargo-handling services.

II-4-1
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

Table 4.1.1
Port Throughput and Capacity

1. Port Throughput in 1998 by Port Group

General Solid Bulk Liquid Bulk
Port Total
Port Port Port
North 13,094 6,637 4,900 1,557
Quang Ninh 5,753 1,011 3,600 1,142
Hai Phong 7,341 5,626 1,300 415
Central 5,010 3,421 100 1,489
Thanh Hoa 128 128 0 0
Nghe An 524 336 0 188
Danang 1,907 1,047 0 860
Binh Dinh 1,288 1,075 0 213
Khanh Hoa 1,163 835 100 228
South 37,256 18,018 365 18,873
HCMC 21,051 14,769 365 5,917
Ba Ria-Vung Tau 14,938 1,982 0 12,956
Mekong 1,267 1,267 0 0
Total 55,360 28,076 5,365 21,919
2. Port Capacity in 1998 by Port Group
General Solid Bulk Liquid Bulk
Port Total
Port Port Port
North 15,060 6,610 6,500 1,950
Quang Ninh 6,800 300 5,000 1,500
Hai Phong 8,260 6,310 1,500 450
Central 9,250 7,150 500 1,600
Thanh Hoa 350 350 0 0
Nghe An 1,800 1,600 0 200
Danang 3,800 2,900 0 900
Binh Dinh 1,600 1,350 0 250
Khanh Hoa 1,700 950 500 250
South 45,870 22,570 2,150 21,150
HCMC 24,520 16,370 1,100 7,050
Ba Ria-Vung Tau 16,250 2,100 50 14,100
Mekong 5,100 4,100 1,000 0
Total 70,180 36,330 9,150 24,700

II-4-2
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

4.2 Future Development Requirements

Port Traffic in 2020

A high case and a low case are analyzed as an economic model for future port
traffic. The ratio of total cargo volume of foreign trade in the low case is 0.80 of
the high case. The difference is not large, and therefore the long-term
development strategy is examined for the high case only.

Table 4.2.1
High Case and Low Case in 2020
Foreign Trade Domestic Trade
Case Cargo Volume (million
Cargo Volume (million ton) Comparison
ton)
High 119.3 1.00
82.9
Low 95.5 0.80

1) International Trade Volume

International trade cargo is projected by commodity in 2020 in the following table:

Table 4.2.2
Foreign Trade Cargo in 2020
(000 ton)
Total North Central South
Rice and Other Food Crops 6,000 400 0 5,600
Sugarcane 0 0 0 0
Sugar 36 0 36 0
Forestry goods 0 0 0 0
Steel -4,066 -1,600 -466 -2,000
Construction Materials 0 0 0 0
Asphalt 0 0 0 0
Cement 6,027 3,027 3,000 0
Clinkers 0 0 0 0
Fertilizers -4,599 -230 -1,610 -2,759
Coal 4,500 4,500 0 0
Other Mining Products 800 800 0 0
Crude Oil 3,470 0 0 3,470
Petroleum -1,1024 -1,100 0 -9,924
Industrial Crops 4,430 0 2,220 2,210
Manufacturing Goods 1 13,440 4,032 2,688 6,720
Manufacturing Goods 2 -13,987 -4,896 -2,798 -6,298
Fishery Products 970 0 194 776
Animal Meat and Others 61 61 0 0
Other Miscellaneous Export 8,342 2,920 1,668 3,754
Other Miscellaneous Import -13,833 -3,458 -2,075 -8,300
Transit/Transshipment 9,304 1,564 2,062 5,678
Export 50,054 16,186 10,350 23,516
Total Import 59,944 13,697 7,943 38,304
Total 119,302 31,449 20,355 67,498
Note: Negative figures indicate imports. Transit/Transshipment is divided into export and import on a 50/50 basis.

II-4-3
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

2) Foreign Container

(1) Containerization Factor

Containerization factors are set by commodity as follows:

Table 4.2.3
Containerization Factors in 2020

0 : Bulk Cargo
Commodity Factor
1 : General Cargo
Rice and Other Food Crops 1 0.3
Sugarcane 0 0.0
Sugar 0 0.0
Forestry goods 1 0.2
Steel 1 0.2
Construction Material 0 0.0
Asphalt 0 0.0
Cement 0 0.0
Clinker 0 0.0
Fertilizer 1 0.0
Coal 0 0.0
Other Mining 0 0.0
Crude Oil 0 0.0
Petroleum 0 0.0
Industrial Crops 1 0.8
Manufacturing Good 1 1 0.8
Manufacturing Good 2 1 0.8
Fishery products 1 1.0
Animal Meat and Others 1 1.0
Other Miscellaneous Export 1 0.8
Other Miscellaneous Import 1 0.8
Transit/Transshipment 1 0.9

(2) Domestic Feeder Transport of Foreign Cargo

Hai Phong Port statistics indicate that the ratio of domestic container to
international container was 10% in 1998, including both domestic
container cargoes and domestic feeder container of foreign cargoes. In
case of Hong Kong Port, this ratio was 15% in 1996 and 20% in 1998, and
is estimated to reach 30% in 2016 with a lot of transshipment cargo.
Therefore, transshipment ratio from major ports to secondary ports in
Vietnam is expected to be 10% at Hai Phong, Danang and Ho Chi Minh
City ports and 20% at Cai Lan and Vung Tau ports.

II-4-4
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

(3) Empty Container Ratio

According to statistics of New Saigon Port, the ratio of empty to loaded

containers was 15% in 1996 and 30% in 1998. In Saigon and Danang
ports, this ratio was around 37% in 1996 and 1997. But in the case of Hai
Phong port, the ratio in 1998 was 14% for import and 72% for export due
to the disproportionately large volume of imports. In this study, 10% is
adopted as the surplus of empty container to the larger number between
export and import due to plural owners of container box. However, despite
the imbalance in imports and exports, the number of handled container by
TEU is the same for both.

3) Foreign Trade Volume by Cargo Type

Foreign trade volume is computed by type of cargo such as container, solid

bulk, liquid bulk, and break bulk as shown in the following table:

Table 4.2.4
Foreign Trade Volume by Cargo Type, 2020

Total North Central South

Foreign trade (000t) 119,302 31,449 20,355 67,498
Export (000t) 54,706 16,970 11,381 26,355
Import (000t) 64,596 14,479 8,974 41,143
Container total (000t) 58,822 15,206 12,137 31,479
Export (000t) 29,736 6,828 6,918 15,990
Import (000t) 29,086 8,377 5,219 15,490
Break bulk (000t) 28,139 6,163 5,470 16,506
Export (000t) 10,452 1,842 1,715 6,895
Import (000t) 17,687 4,322 3,755 9,610
Solid bulk (000t) 11,048 8,300 2,748 0
Export (000t) 11,048 8,300 2,748 0
Import (000t) 0 0 0 0
Liquid bulk (000t) 21,293 1,780 0 19,513
Export (000t) 3,470 0 0 3,470
Import (000t) 17,823 1,780 0 16,043
Container (000TEU) 6,565 1,786 1,327 3,451

4) Domestic Trade Volume by Cargo Type

The total domestic cargo volume in 2020 is computed at 82.9 million tons per
annum.

II-4-5
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

Table 4.2.5
Domestic Trade Volume by Cargo Type, 2020

Port Traffic Total North Central South

Domestic trade (000t) 82,858 23,040 26,775 33,043
Break Bulk (000t) 28,429 9,799 7,308 11,322
Bulk Solid (000t) 22,879 7,253 8,237 7,389
Bulk Liquid (000t) 26,533 4,258 9,940 12,334
Container (000t) 5,017 1,729 1,290 1,998
Container (000TEU) 474 168 116 191

5) Total Port Traffic in 2020

Total port traffic is computed at 202 million tons. Container volume is

estimated at 64 million tons and 7.0 million TEUs. Break bulk, solid bulk and
liquid bulk are estimated at 56, 34 and 47 million tons, respectively.

Table 4.2.6
Total Trade Volume by Cargo Type, 2020

Port Traffic Total North Central South

Total (000t) 202,160 54,489 47,130 100,541
Break Bulk (000t) 56,334 15,962 12,543 27,828
Bulk Solid (000t) 34,397 15,553 11,455 7,389
Bulk Liquid (000t) 47,826 6,038 9,940 31,847
Container (000t) 63,604 16,935 13,192 33,477
Container (000TEU) 7,004 1,954 1,409 3,642

Port Facility in 2020

1) Port Development up to 2020

The required facilities to handle cargo in 2020 are roughly estimated based
on future volume and current capacity. The necessary capacity to be
prepared is estimated at 135.0 million tons in Vietnam. Container terminal
shall be developed to handle 5.9 million TEU: 1.7 million TEU in the north, 1.4
million TEU in the center and 2.8 million TEU in the south.

Break bulk in the north and south and liquid bulk in all three regions will
exceed 5 million tons corresponding to Dung Quat Oil Project. Mechanized,
efficient handling systems shall be introduced to handle the above
commodity.

II-4-6
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

Table 4.2.7
Port Capacity by Cargo Type, 1998

Port Traffic Total North Central South

Total (000t) 70,180 15,060 9,250 45,870
Break Bulk (000t) 27,698 4,904 6,844 15,951
Bulk Solid (000t) 9,150 6,500 500 2,150
Bulk Liquid (000t) 24,700 1,950 1,600 21,150
Container (000t) 8,632 1,706 306 6,619
Container (000TEU) 1,114 214 33 867

Table 4.2.8
Required Capacity for Increased Cargo up to 2020 by Cargo Type

Port Traffic Total North Central South

Total (000t) 134,870 39,429 37,880 57,562
Break Bulk (000t) 28,635 11,058 5,700 11,877
Bulk Solid (000t) 25,247 9,053 10,955 5,239
Bulk Liquid (000t) 26,016 4,088 8,340 13,588
Container (000t) 54,972 15,229 12,885 26,858
Container (000TEU) 5,890 1,740 1,376 2,775

4.3 Port Development Strategies Toward Year 2020

General Ports

• The central maritime administration should concentrate its public investment in

nine major general ports, namely, Quang Ninh deep-sea port, Hai Phong, Cua
Lo (Vung Ang), Danang, Qui Nhon, Nha Trang, Saigon, a deep-sea port in the
Vung Tau-Thi Vai area, and Can Tho. A major general port is located every
350 km along the coastline on average.
• As a result of road improvement and road transport modernization, nine ports
will be accessible to shippers within one day. Such a concentrated investment
will also benefit shippers from many ship calls by larger vessels and modern
cargo-handling services.
• Cua Lo will be expanded to serve northern central provinces, such as Nghe
An, Ha Tinh and Quang Binh. However, when further expansion would be
prohibitive due to the high costs of anti-siltation and dredging works, Vung Ang
will become its alternative after the year 2010.

Gateway Ports

• Three gateway ports will be developed in the northern, central and southern
regions taking account of Vietnam’s long latitude. Present gateway ports of
Hai Phong and Saigon suffer from a limited port area and shallow water and
thus deep ports will be necessary in Quang Ninh and Vung Tau-Thi Vai areas.

II-4-7
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

The gateway function will be gradually transferred to these new ports. In the
central region, the gateway function is served by Danang port. To ease the
demand here, Tien Sa Port will be expanded and then Lien Chiu Port will be
constructed. Since gateway ports connect Vietnamese economy with
international markets, the progress of port construction very much affects
economic development. Government should take full responsibility in port
infrastructure development.
• To enjoy the merit of deep seaport development, modern port operation and
an efficient intermodal connection must be provided to port users by way of:
− Contracting out some port services to internationally competent operators
such as container terminal operators,
− Simplifying port procedures and introducing port EDI, and
− Developing high-speed access transports such as road and rail in
association with full-scale ICDs at both Hanoi and HCM City ports

Specialized Ports

• Specialized ports in association with specialized vessels, such as oil tankers,

cement tankers, coal carriers, etc., are potent tools to enable mass haulage at
cheap transport costs. Besides general ports and common carriers, however,
the beneficiaries of specialized port development are limited. Therefore
maritime administration should set an adequate policy package to promote
various specialized maritime transport systems and undertake only maritime
safety and environmental protection.

Local Ports

• From national/regional viewpoint, local coastal port development will be less

significant than land transport development. Provincial governments will
maintain their operation as long as salient local traffic remains. Therefore the
central maritime administration is responsible only for maritime safety and
environmental aspects around local coastal ports.
• With regard to local inland ports, provincial governments should be
responsible for their development and operation under the supervision of
VIWA.

II-4-8
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

Figure 4.3.1
Location of Hai Phong and Cai Lan Ports

Source: JICA Report on Transport Study in 1994

Figure 4.3.2
Danang Bay Port System
II-4-9

Vietnam National Transport Strategy Study (VITRANSS)

Technical Report No. 8
Shipping and Ports

II-4-9
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

Figure 4.3.3
Port Development Plan in Vung Tau and HCM
!
!

II-4-10
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

4.4 Other Key Issues

1) Port Hierarchy

In this study, public ports are classified according to their functions, namely,
international container cargo handling, conventional cargo handling and
passenger transportation. The role of port facilities, which is based on the scale
of their influence in the hinterland, is the main standard criteria in classifying
them.

Table 4.4.1
Strategic Classification of Seaports

Indicators for
Classification Status Expected role
Classification
International Port Key port for Center for • Commodity type
international trade international maritime
trade • Cargo volume
Regional Port Key port for regional Center for regional
socio-economic distribution of goods • GRDP of
development and hinterland
national safety
Local Port Key port for local • Population of
socio-economic hinterland
development
Special Port Special port for Basic infrastructure • Management
development of for special goods
industry or
national economy
Private Port Special port for Profitable operation of
private purposes private business

Table 4.4.2
Typical Classification of Seaports (Example)

Northern Central Southern

International Hai Phong Danang Vung Tau
Port Quang Ninh Sai Gon
Regional Port Qui Nhon Ben Nghe
Nha Trang Tang Cang
Can Tho
My Thoi
My Tho
Local Port Other Ports
Special Port Oil, Gas, Cement, Coal, Sand, Foodstuff, etc.
Private Port Chang May Phu My
(BOT, JV) Van Phong VICT

II-4-11
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

International ports are selected based on existing and future potential. In Vung
Tau area, there are several ports which have similar potential and selection will
be done in the future. Also, in Quang Ninh area, Cai Lan port has a potential to
become an international port but present activity is small.

2) Port Management

(1) Private Participation

Generally, port management is classified into three types (“Service Port”,

”Landlord Port” and “Private Port”) by ownership (see Table 4.4.3). The
respective names derive from the financial share of the public sector.

Public investment naturally decreases as private participation increases.

Therefore, the selection of management type should be seriously
discussed from the financial point of view.

In the management of Vietnamese general ports, the service port type is

applied to public ports and private port type to ports resulting from joint
ventures or BOT investment schemes. The landlord port type is popular in
port management but not yet allowed in Vietnam.

Table 4.4.3
Type of Port Management and Operation

Port Type
Management Type
Service Port Land-Lord Port Private Port
Ownership Public Lease Private (Lease)*
Planning and Supervision Public Public Private
truction
Cons-

Channel Dredging Public Public Private

Site Development Public Public Private
Terminal Facility Public Public Private
Cargo Handling Public Public Private
Operation
Cargo Handling Public Public Private
Examples Singapore, New York/New Felixstowe, Klang
Bangkok, Jersey, Hamburg, Vietnamese
Vietnamese Public Laem Chabang Private Port
Port

(2) Port Management Policy

In the case of Vietnamese ports, mainly three different bodies are

responsible for the management of public ports: VINAMARINE,
VINALINES and provincial governments. In case of provincial port a
management policy can easily reflect local transport and trade conditions.

II-4-12
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

But in other cases, governmental opinion may not coincide with local
conditions, therefore the establishment of a management committee
composed of local transport officers and users is recommended as an
advisory organization.

(3) VINAMARINE Port

Based on the separate functions of the “Regulator (government)” and

“Operator (Port Management Body)”, VINAMARINE should operate
unprofitable but socially important ports only, since it would be difficult for
the regulator to direct it (VINAMARINE) with the same strictness as would
a private company.

3) Port Operation

The productivity of port operation shall be improved to meet increasing port

traffic in the future. Speedy handling, clean operation and safe transport are
common in a modern terminal. If a tariff system reflects improved productivity
or a port contract provides incentives, for example, discounts, a port user can
accept it. At present, the discount rate in Vietnamese ports is set at a
maximum of 10%, but double this would still be reasonable. In the case of
Singapore port, its discount rate ranges up to 30% depending on container
handling volume.

4) Containerization

Containerization of maritime cargo commenced in 1966 and reached its level

of saturation in developed countries 25 years later.

In Vietnam, containerization started in the late 1980s. Its containerization

level is projected to match that of developed countries, at 7.0 million TEU
under the high case in 2020. Compared with world container statistics, this
figure is almost the same as that of Japan in 1988 and the UK in 1997.Usually
container cargo volume begins at a low level, increasing rapidly after five
years. After 25 years and nearing the maximum capacity, the increase rate
tapers off. The necessary period of containerization development in Vietnam
before it reaches the same level as that of its trading partners is estimated at
25 years.

There seems to be two inverse conditions observed in Vietnam. The longer

the route distance, the less direct shipping services available. The more there
are volumes on a route, the more there are direct shipping services.

On a long sea route, a larger container vessel has less unit container
transport cost compared with a smaller vessel. Therefore, shipping lines
generally tend to use larger vessels and collect more containers for a long

II-4-13
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

sea route. If the volume of collected containers is enough to justify using a

larger container vessel, a shipping line tends to avoid costly transshipment
services. On the other hand, if the volume of containers is not enough to
justify direct shipping between specific ports on a long sea route, a shipping
line tends to choose transshipment services. In case of a short sea route,
there is no significant difference between an economical main-line vessel and
a feeder vessel. Hence, on a short sea route, a shipping line tends to choose
multiple calling services using moderate-size main-line vessels to avoid costly
transshipment, regardless of transport volume.

Hong Kong, Jebel Ali, Colombo, Mediterranean ports, etc. are major
transshipment ports on the Asian-European container route. An increasing
trend in container cargo in Hong Kong is rather different from that of
Singapore because of the developments of ports in Shenzhen City. Jebel Ali
and Colombo ports are competing with Khor Fakkan and Fujaila for container
cargoes to/from India-Pakistan feeder ports. In the Mediterranean Sea,
Damietta, Malta, Gioia Tauro, and Algeciras are major transshipment ports,
where transshipment ratios are higher than 50%. Generally, maritime
transport business is fiercely competitive, hence shipping liners are used to
changing port calls based on contract conditions. If a port has a disadvantage
such as deviation from international container route, it provides compensation
to port users for their additional time and energy. Therefore, the decision to
invest in a transshipment port must be made carefully.

Figure 4.4.1
Transshipment Trend by Distance and Volume

1.00
Short Distance

0.90
Large Volume

0.80

0.70
Traffic characteristics

0.60

0.50

0.40

0.30
Long Distance
Less Volume

0.20

0.10

0.00
Low (Direct) High
Transshipment Level

II-4-14
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

Table 4.4.4
Weekly Loading Plan for Container Vessel (Example)
(TEU)
TOTAL EUROPE-ASIA (TOTAL) MEDITERRANEAN-ASIA
Loading Discharging Loading Discharging Loading Discharging
NorthEurope 13,350 14,150 13,350 14,150
Mediterranean 3,000 3,200 700 800 2,300 2,400
MiddleEast-EB 1,150 1,550 1,150 1,550
MiddleEast-WB 900 1,300 900 1,300
SouthAsia 1,550 1,450 1,400 1,400 150 50
AsiaHub"a-EB" 2,900 5,550 2,750 4,900 150 650
AsiaHub"b-EB" 700 2,000 450 1,500 250 500
AsiaHub"c-EB" 250 1,200 250 1,200
AsiaHub"a-WB" 5,200 3,150 4,850 3,000 350 150
AsiaHub"b-WB" 3,650 2,150 2,950 1,900 700 250
AsiaHub"c-WB" 1,300 350 1,300 350
FarEast 8,150 7,750 7,050 6,500 1,100 1,250
Note: EB (eastbound), WB (westbound)

5) Port Information System

A port information system shall be established for greater utilization of port

facilities, timely access to port information, collection of expanded trade
information, speedy transaction of port-related jobs, etc. The main function of
this system is the provision of a port database, online real-time access, direct
data retrieval, and data exchange with other systems. Handling container
cargo would be difficult to control without a computer system. A computer
system in a container yard has three functions, namely, container inventory
control system, container delivery/receiving control system and
loading/unloading operation control system.

To improve the efficiency of cargo handling operation, it is essential for

operators and the supervisor at the control center to exchange information
and communicate effectively usually through a radio-telephone system,
mobile radio terminal on vehicles or mobile telephone system and global
positioning system.

Figure 4.4.2 shows the Computer Integrated Terminal Operation System

(CITOS) of the Port of Singapore Authority. A similar system is installed at the
Vietnam International Container Terminal (VICT).

Not only a container terminal but also a control system such as the Radar
Screen Network System is necessary for navigational safety and port control.
Therefore a Canadian system, that has a range of 40 miles, will be installed in
Vung Tau Port in the near future.

II-4-15
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

Figure 4.4.2
Concept of CITOS

Expert Planning Systems

Yard Control Computer

Wireless Data Transmission

Computer Computer on
on PM Quay Crane

Gate Automation Computer on

Store Yard Crane

Transponder
Antenna on Truck

!"#$% &#'(% )#!$% !"#$%& SHIP

Source: APEC Congestion Points Study, February 1997

II-4-16
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

5 PROPOSED PORT DEVELOPMENT (2001-2010)

5.1 Port Traffic in 2010

High case and low case are analyzed as an economic model for future port traffic.
The ratio of total cargo volume of foreign trade in the low case is 0.94 of the high
case. Although the difference is not large, only the high case is adopted for the
master plan.

Table 5.1.1
High Case and Low Case, 2010

Foreign Trade Domestic Trade

Case Cargo Volume Cargo Volume
Comparison
(000,000 ton) (000,000 ton)
High 58.6 1.00 40.1
Low 55.0 0.94

1) International Trade Volume

International trade cargo is projected by commodity in 2010 in the following table:

Table 5.1.2
Foreign Trade Cargo, 2010 (High Case)
(000 tons)
Total North Central South
Rice and Other Food Crops 5,000 300 0 4,700
Sugarcane 0 0 0 0
Sugar 0 0 0 0
Forestry goods 0 0 0 0
Steel -1,751 -851 0 -900
Construction Material 0 0 0 0
Asphalt 0 0 0 0
Cement 3,139 2,100 1,039 0
Clinker 0 0 0 0
Fertilizer -4,655 -230 -1,630 -2,795
Coal 4,500 4,500 0 0
Other Mining 500 500 0 0
Crude Oil 3,470 0 0 3,470
Petroleum -2,951 0 0 -2,951
Industrial Crops 2,130 0 1,070 1,060
Manufacturing Good 1 8,157 2,451 1,220 4,486
Manufacturing Good 2 -8,489 -2,971 -1,273 -4,245
Fishery products 860 0 172 688
Animal Meat and Others 62 62 0 0
Other Miscellaneous Export 2,782 974 417 1,391
Other Miscellaneous Import -4,462 -1,115 -669 -2,677
Transit/Transshipment 5,767 16,972 1,100 3,749
Export 30,600 10,887 3,918 15,795
Total Import 22,308 5,167 3,572 13,568
Total 58,674 16,972 8,590 33,112
Note: Negative figures indicate imports. Transit/Transshipment is divided into export and import on a 50/50 basis.

II-5-1
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

2) Foreign Container

(1) Containerization Factor: Containerization factors are the same as those

in 2020.

(2) Domestic Feeder Transport of Foreign Cargo: Transshipment ratios from

major ports to secondary ports are the same as those in 2020.

(3) Empty Container Ratio: The surplus ratio of empty container to the larger
number between export and import is the same as that in 2020.

3) Foreign Trade Volume by Cargo Type

Foreign trade volume is computed by cargo type such as container, break

bulk, solid bulk and liquid bulk. The results are shown in the table below.

Table 5.1.3
Foreign Trade Volume by Cargo Type, 2010 (High Case)

Total North Central South

Foreign trade (000t) 58,674 16,972 8,590 33,112
Export (000t) 33,484 11,346 4,468 17,670
Import (000t) 25,191 5,625 4,122 15,443
Container total (000t) 28,778 7,157 4,881 16,739
Export (000t) 15,472 3,305 2,833 9,335
Import (000t) 13,305 3,852 2,049 7,405
Break bulk (000t) 15,338 2,715 2,670 9,952
Export (000t) 6,402 941 596 4,865
Import (000t) 8,934 1,774 2,073 5,087
Solid bulk (000t) 8,139 7,100 1,039 0
Export (000t) 8,139 7,100 1,039 0
Import (000t) 0 0 0 0
Liquid bulk (000t) 6,421 0 0 6,421
Export (000t) 3,470 0 0 3,470
Import (000t) 2,951 0 0 2,951
Container (000TEU) 3,223 810 541 1,871

4) Domestic Traffic Volumes

The hinterland is divided into 10 port areas (see Table 5.1.4) for domestic
cargo, while domestic trade volume by region is tentatively assumed in Table
5.1.5.

II-5-2
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

Table 5.1.4
Port Hinterland by Province for Domestic Cargo
Region Zone Province Name Port Group in 2010
1 1 Ha Noi
Red 2 Hai Phong
River 3 Hai Duong
Delta 4 Hung Yen Hai Phong
5 Thai Binh
6 Nam Dinh
7 Ninh Binh
8 Ha Nam
9 Ha Tay
2 10 Cao Bang
Northeast 11 Lang Son
12 Quang Ninh Quang Ninh
13 Thai Nguyen
14 Bac Can
15 Bac Ninh
16 Bac Giang
17 Phu Tho
18 Vinh Phuc
19 Lao Cai
20 Yen Bai Hai Phong
21 Tuyen Quang
22 Ha Giang
3 23 Son La
Northwest 24 Lai Chau
25 Hoa Binh
4 26 Thanh Hoa Thanh Hoa
North 27 Nghe An
Central 28 Ha Tinh Nghe An
Coast 29 Quang Binh
30 Quang Tri
31 Thua Thien - Hue
5 32 Quang Nam Danang
South 33 Danang
Central 34 Quang Ngai
Coast 35 Binh Dinh Binh Dinh
36 Phu Yen
37 Khanh Hoa Khanh Hoa
6 38 Kon Tum Binh Dinh
Central 39 Gia Lai
Highlands 40 Dac Lac Khanh Hoa
7 41 Ho Chi Minh Ho Chi Minh
Southeast 42 Lam Dong Khanh Hoa
43 Ninh Thuan
44 Binh Phuoc Ba Ria – Vung Tau
45 Tay Ninh
46 Binh Duong Ho Chi Minh
47 Dong Nai
48 Binh Thuan Ba Ria - Vung Tau
49 Ba Ria – Vung Tau
8 50 Long An
Mekong 51 Dong Thap
River 52 An Giang
Delta 53 Tien Giang
54 Vinh Long
55 Ben Tre Mekong
56 Kien Giang
57 Can Tho
58 Tra Vinh
59 Soc Trang
60 Bac Lieu
61 Ca Mau

II-5-3
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

Table 5.1.5
Domestic Trade Volume by Cargo Type, 2010

Port Traffic Total North Central South

Domestic trade (000t) 40,107 12,826 10,033 17,248
Break Bulk (000t) 12,323 4,753 2,363 5,206
Bulk Solid (000t) 13,888 5,417 3,007 5,464
Bulk Liquid (000t) 12,216 2,008 4,340 5,868
Container (000t) 1,680 648 322 710
Container (000TEU) 187 76 34 76

5) Port Traffic in 2010 and Port Capacity in 1998

Total port traffic is computed at 99 million tons. Container volume is estimated

at 30 million tons and 3.4 million TEUs. Break bulk, solid bulk and liquid bulk
are estimated at 27.7, 22.0 and 18.6 million tons, respectively. Port traffic by
port and cargo type is computed in Tables 5.1.6 - 5.1.9.

Table 5.1.6
Port Traffic by Cargo Type, 2010
Port Traffic Total North Central South
Total (000t) 98,781 29,798 18,623 50,360
Break Bulk (000t) 27,659 7,468 5,033 15,158
Bulk Solid (000t) 22,027 12,517 4,046 5,464
Bulk Liquid (000t) 18,637 2,008 4,340 12,289
Container (000t) 30,458 7,805 5,203 17,449
Container (000TEU) 3,409 887 575 1,948

Table 5.1.7
Port Traffic in Northern Vietnam by Cargo Type, 2010
Port Traffic North Total Hai Phong Quang Ninh
Total (000t) 29,798 11,436 18,362
Break Bulk (000t) 7,468 4,758 2,710
Bulk Solid (000t) 12,517 3,102 9,415
Bulk Liquid (000t) 2,008 767 1,241
Container (000t) 7,805 2,809 4,996
Container (000TEU) 887 302 585

Table 5.1.8
Port Traffic in Central Vietnam by Cargo Type, 2010
Center Thanh Khanh
Port Traffic Nghe An Danang Binh Dinh
Total Hoa Hoa
Total (000t) 18,623 2,079 2,272 9,304 2,466 2,502
Break Bulk (000t) 5,033 201 1,024 1,826 943 1,039
Bulk Solid (000t) 4,046 1,776 365 1,032 505 368
Bulk Liquid (000t) 4,340 73 166 3,790 171 139
Container (000t) 5,203 27 717 2,656 847 956
Container (000TEU) 575 3 71 262 100 140

II-5-4
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

Table 5.1.9
Port Traffic in Southern Vietnam by Cargo Type, 2010

Ba Ria-
Port Traffic South HCMC CanTho
Vung Tau
Total (000t) 50,360 26,035 18,526 5,799
Break Bulk (000t) 15,158 10,324 1,822 3,012
Bulk Solid (000t) 5,464 883 3,480 1,102
Bulk Liquid (000t) 12,289 4,010 7,428 850
Container (000t) 17,449 10,818 5,796 835
Container (000TEU) 1,948 1,240 602 106

Traffic volume of the Quang Ninh Port Group is estimated at 18 million tons or
19% of the whole, from 10% in 1998. That of the Hai Phong Port Group is 11
million tons or 12% of the whole, from 13% in 1998. The latter’s decrease is
due to the shallow approach to Hai Phong Port Group which as at 9 m
compared to 12 m of Cai Lan Port of the Quang Ninh Port Group.

The share of general cargo including container fell from 64% in 1998 to 56%
due to the big increase of the Danang Port Group including Hue and Quang
Ngai. Ba Ria-Vung Tau and Can Tho have increased their share, while
HCMC’s share has decreased. Based on a demand forecast, the HCMC Port
Group will maintain a share of 36% in 2010 for general cargo, handling 21.1
million tons per annum. Increasing volumes at HCMC and Ba Ria-Vung Tau
ports are expected to reach 7 and 6 million tons, respectively, including a
400,000 and 600,000 TEU increase in containers in HCMC and Ba Ria-Vung
Tau, respectively.

5.2 Regional Level of Investment

Required facilities to handle cargo in 2010 are roughly estimated based on future
volume and current capacity. The additional port capacity is estimated at 42.4
million tons in Vietnam. Container terminals shall be developed for handling 2.3
million TEUs: 0.7 million TEUs in the north, 0.5 million TEUs in the center and 1.1
million TEUs in the south. Break bulk in the north, solid bulk in the three regions
and liquid bulk in the center will exceed 2 million tons.

Required costs to port development are roughly estimated at US$ 1,148 million
for container terminals and US$233 million for break bulk terminals. Cost
estimation is based on the standard construction cost table (refer to Appendix B).
The cost of bulk terminals shall be estimated by case. The construction cost by
project is mentioned in a later section.

II-5-5
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

Table 5.2.1
Total Port Capacity by Cargo Type, 1988

Port Traffic Total North Central South

Total (000t) 70,180 15,060 9,250 45,870
Break Bulk (000t) 27,698 4,904 6,844 15,951
Bulk Solid (000t) 9,150 6,500 500 2,150
Bulk Liquid (000t) 24,700 1,950 1,600 21,150
Container (000t) 8,632 1,706 306 6,619
Container (000TEU) 1,114 214 33 867

Table 5.2.2
Port Capacity of the North by Cargo Type, 1988

Port Capacity North Hai Phong Quang Ninh

Total (000t) 15,060 8,260 6,800
Break Bulk (000t) 4,904 4,604 300
Bulk Solid (000t) 6,500 1,500 5,000
Bulk Liquid (000t) 1,950 450 1,500
Container (000t) 1,706 1,706 0
Container (000TEU) 214 214 0

Table 5.2.3
Port Capacity of the Center by Cargo Type, 1988

Port Capacity Center Thanh Hoa Nghe An Danang Binh Dinh Khanh Hoa
Total (000t) 9,250 350 1,800 3,800 1,600 1,700
Break Bulk (000t) 6,844 345 1,540 2,817 1,277 864
Bulk Solid (000t) 500 0 0 0 0 500
Bulk Liquid (000t) 1,600 0 200 900 250 250
Container (000t) 306 5 60 83 73 86
Container (000TEU) 33 1 6 10 7 10

Table 5.2.4
Port Capacity of the South by Cargo Type, 1988

Ba Ria –
Port Capacity South HCMC CanTho
Vung Tau
Total (000t) 45,870 24,520 16,250 5,100
Break Bulk (000t) 15,951 9,894 2,100 3,957
Bulk Solid (000t) 2,150 1,100 50 1,000
Bulk Liquid (000t) 21,150 7,050 14,100 0
Container (000t) 6,619 6,476 0 143
Container (000TEU) 867 847 0 20

II-5-6
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

Table 5.2.5
Required Capacity up to 2010

Port Traffic Total North Central South

Total (000t) 42,353 14,997 11,714 15,642
Break Bulk (000t) 3,169 2,564 175 431
Bulk Solid (000t) 13,227 6,017 3,678 3,531
Bulk Liquid (000t) 4,130 317 2,963 850
Container (000t) 21,826 6,099 4,897 10,830
Container (000TEU) 2,295 673 542 1,080

Table 5.2.6
Estimated Development Cost of Ports up to 2010

(US$ mil.)
Port Traffic Total North Central South
Break Bulk (000,000 US$) 233 188 13 32
Container (000,000 US$) 1,148 337 271 540

Table 5.2.7
Required Capacity in the North up to 2010

Port Capacity North Hai Phong Quang Ninh

Total (000t) 14,997 3,176 11,821
Break Bulk (000t) 2,564 154 2,410
Bulk Solid (000t) 6,017 1,602 4,415
Bulk Liquid (000t) 317 317 -259
Container (000t) 6,099 1,103 4,996
Container (000TEU) 673 88 585
Note: Negative figure means surplus capacity

Table 5.2.8
Estimated Development Cost of Northern Ports up to 2010

Port Capacity North Hai Phong Quang Ninh

Break Bulk (US$ 000,000) 188 11 177
Container (US$ 000,000) 337 44 292

II-5-7
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

Table 5.2.9
Required Capacity in the Center up to 2010

Port Capacity Center Thanh Hoa Nghe An Danang Binh Dinh Khanh Hoa
Total (000t) 11,714 1,873 1,022 6,495 1,279 1,045
Break Bulk (000t) 175 -144 -516 0 0 175
Bulk Solid (000t) 3,678 1,776 365 1,032 505 -132
Bulk Liquid (000t) 2,963 73 -34 2,890 -79 -111
Container (000t) 4,897 23 657 2,573 775 870
Container (000TEU) 542 2 65 252 93 130
Note: Negative figures mean surplus capacity

Table 5.2.10
Estimated Development Cost of Central Ports up to 2010
Port Capacity Center Thanh Hoa Nghe An Danang Binh Dinh Khanh Hoa
Break Bulk (US$ 000,000) 13 0 0 0 0 13
Container (US$ 000,000) 271 1 32 126 47 65

Table 5.2.11
Required Capacity in the South up to 2010
Ba Ria –
Port Capacity South HCMC Can Tho
Vung Tau
Total (000t) 15,642 4,773 9,226 1,644
Break Bulk (000t) 431 431 -278 -945
Bulk Solid (000t) 3,531 -217 3,430 102
Bulk Liquid (000t) 850 -3,040 -6,672 850
Container (000t) 10,830 4,342 5,796 692
Container (000TEU) 1,080 393 602 86
Note : Negative figures mean surplus capacity

Table 5.2.12
Estimated Development Cost of Southern Ports up to 2010
Port Capacity South HCMC Ba Ria – Can Tho
Vung Tau
Break Bulk (000,000 US$) 32 32 0 0
Container (000,000 US$) 540 196 301 43

II-5-8
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

5.3 Identified Projects for the Master Plan Period

1) General

On the basis of the existing port master plan of MOT and estimated future
traffic volume and characteristics, candidate projects for the VITRANSS
master plan have been worked out.

2) Port Development in Northern Vietnam

Port traffic in the Quang Ninh Port Group exceeds 18 million tons, which is
around 19% of the total in Vietnam, while estimated container volume is
585,000 TEUs, or around 17% of the total. However in the case of Hai Phong,
port traffic has decreased, representing only 12% of the total and only 9% of
the container traffic. It is necessary to construct a bulk terminal and a container
terminal in the Quang Ninh Port Group to handle the projected 9.4 million tons
of solid bulk and 585,000 TEUs of container. Container vessels prefer to call at
Cai Lan Port instead of Hai Phong Port because the former has a 12 m-depth
berth compared to the latter’s 9 m-berth. Therefore in 2010, mother vessels
plying the Asian container route will call at Cai Lan and a large portion of feeder
container from Hong Kong and domestic ports are expected to call at Hai
Phong Port because it is easily accessible to cargo users.

(1) Cai Lan Port Expansion Project

The Hai Phong Port has been and will continue to play a key role for
sustaining economic activities in northern Vietnam. However, since its
physical nature as a river port does not allow large vessels, it is expected
that such vessels (of 40,000 DWT) will call at Cai Lan Port which it can
accommodate after capital dredging works are conducted. This port has
big potential to be an international port (see Figure 5.3.1).

Up to 2004 (Stage 1): Construction project is under bidding. The project is

aiming at an expansion of Phase 1 of the Cai Lan Port to meet traffic
demand in the immediate future up to the year 2004. Its capacity will be
2.3 million tons and investment capital of US$ 108.4 million is required. It
consists of the following conditions:

• Construction of new berths: One berth for 40,000 DWT and two
(container and general cargo) berths for 30,000 DWT. Length is 700 m
and depth is –13 m.
• Dredging works of inner channel
• Construction will be completed within 28 months.

Mid 2000s: A coastal space management study will be conducted

between Mon Cai (Chinese border) and Thanh Hoa province to determine

II-5-9
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

the best gateway port site in relation to tourism and industry development.
To meet additional traffic volume, several berths (probably four large
berths) will be constructed at the identified port site by year 2010 and
further expansion during the 2010s.

(2) Hai Phong Port General Port Project (Phase II)

The Urgent Rehabilitation Project of Hai Phong Port (Phase I) commenced in

August 1996 and is scheduled to be completed in the beginning of 2000. The
rehabilitation program concentrates on upgrading Chua Ve Port into a
container terminal. Upon completion, the port’s installed capacity for cargo
handling is planned at 6.2 millions tons per annum. The objective of this
project (Phase II) is to achieve an increased container throughput capacity of
250,000 TEU per annum. The container traffic has been continuously
increasing. Therefore, in addition to the access channel improvement, Phase
II will continue the Chua Ve Port expansion by constructing two other
container berths in the adjacent downstream area (see Figure 5.3.2)

Up to 2005: A detailed design will decide not only facilities but also
channel dredging plan. A 170-m berth for 10,000 DWT vessels and the
first stage of channel dredging will be completed. It is estimated that
capacity will increase to 0.8 million tons/year for Chua Ve container
terminal. Investment cost is US$ 99 million.

Up to 2010: A 220-m berth for 10,000 DWT vessels will be constructed at

the downstream and the second stage of channel dredging will be
conducted. An increase of 0.9 million tons/year in the capacity of Chua Ve
container terminal is expected. Investment capital is US$ 42 million
including dredging

2) Port Development in Central Vietnam

Danang and Dung Quat are the major projects in the region. The cost of the
oil terminal in the Dung Quat project is US$ 150 million but as this is a
national project it will not come out of the MOT budget. The Danang
improvement project, which includes new port development at Lien Chieu, is
estimated to cost US$ 158 million.

Cua Lo, Qui Nhon and Nha Trang ports plan to accommodate medium-size
vessels.

(1) Cua Lo Port Project

Cua Lo Port shall be improved to meet the demand of export and import
of the region. When the east-west corridors are established, this port will
be in charge of exporting and importing cargoes from Laos and

II-5-10
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

northeastern Thailand. The capacity of the existing port is 0.3 million tons
(see Figure 5.3.3).

Up to 2005: The construction of a 330-m berth is planned with an

investment capital of US$ 22.8 million (infrastructure at US$ 18.8 million
and equipment at US$ 4.0 million). Capacity will increase to about 1.2
million tons.

Up to 2010: The construction of a 330-m berth to the sea is planned with

an investment capital of US$ 29.5 million (infrastructure at US$ 9.5
million, anti-siltation dike at US$ 18.0 million and equipment at US$ 2.0
million). Capacity will increase to about 2.6 million tons.

(2) Lien Chieu Port Development

To encourage the development of the central region and to improve the

transport infrastructure for the east-west transport corridor, the Lien Chieu
Port development project was proposed in the coastal area of the central
region.

Lien Chieu Port is located 15 km west of Danang city center and 24 km

from Tien Sa Port. Road No.1 and the railway track are found behind the
possible port area while a part of the backyard has already been
urbanized. Although development site is located in Danang Bay, the
waterside is exposed to waves from the northeast, so that the
construction of a new port requires a breakwater. A stratum of fine sand
was identified at the depth of –12 to –20 m. The adjacent hinterland is
being developed as the Lien Chieu-Hoa Khanh industrial zone.

Up to 2010 (Initial stage): Taking into consideration that container

throughput is not large enough to attract mother container vessels, the
maximum size of calling container vessel is considered at about 30,000
DWT in the initial stage. One berth is designed as a multipurpose berth
with alongside depth of –12 m to cater to 30,000 DWT container vessels,
40,000 GT car carriers, 20,000 DWT general cargo trampers, and others.
Two conventional cargo berths are included with a provisional alongside
depth of –8.0 m.

(3) Tien Sa Port Rehabilitation

Tien Sa Port has two piers, each is 183 m long and 27.4 m wide. The
water depth is 11 m in normal conditions. A third pier is now under
construction to accommodate 15,000 DWT container vessels. To increase
port capability, a rehabilitation of the port and improvement of access road
shall be conducted (see Figure 5.3.5). The expansion of Tien Sa Port is
necessary prior to the development of Lien Chieu Port

II-5-11
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

Up to 2003: Phase I includes breakwater construction, collective repair

works of the existing two piers, container terminal development,
equipment procurement, and dredging. Access road and Tuyen Son
Bridge should be completed. Capacity will be 2.2 million tons/year and
total investment capital is US$ 100 million.

Up to 2010 (Phase II): The terminal layout will be modernized and

efficiency will be increased. The total capacity will increase to 3.6 million
tons/year. The investment capital required is US$ 75 million.

(4) Specialized Port for Dung Quat Industrial Zone

Government decided to locate Oil Refinery No. 1 at Dung Quat and plans
projects of industrial zones including steel, agricultural, forestry, fishery,
and light industry. The oil refinery will be completed in 2003 with a
capacity of 6.5 million tons. Dung Quat Port is newly constructed as a
general transport infrastructure directly serving Dung Quat industrial zone
with a mass cargo transported by vessels of 30,000-200,000 DWT. The
detailed design has not been completed. The attached drawing does not
correspond to description and indicates the available area for cargo
handling (see Figure 5.3.6).

Up to 2000: Two general cargo berths with a length of 410 m and n oil
berth are to be built. Total investment cost is US$ 15 million.

Up to 2010: Four general cargo berths with a length of 820 m in the

general port, two berths for discharging crude oil and other berths for
loading domestic oil will be constructed. The capacity of the general port
is 3.5 million tons and that of the oil port is 13-14 million tons per year.
Total investment cost for berths is US$ 135 million, US$ 63 million of
which is the cost of the breakwater.

(5) Qui Nhon Port Development

Qui Nhon Port transports foreign and domestic cargoes to Binh Dinh, Phu
Yen, Gia Lai, Kon Tum, and some transit cargo to Cambodia, Thailand
and Laos. To meet increasing cargo and accommodate larger vessels,
expanded berth and deeper quay are necessary (see Figure 5.3.7).

Up to 2005: Two berths will be built for 10,000 DWT vessels, of which one
is a container berth. Capacity will be 2 million tons/year. Investment
capital is US$ 14 million.

Up to 2010: One pier with two berths (total length of 440 m) will be built
for 15,000-20,000 DWT vessels. Capacity will be 3.5 million tons/year.
Investment capital is US$ 22 million.

II-5-12
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

(6) Nha Trang Port Development

Nha Trang Port transports foreign and domestic cargoes to Khanh Hoa,
Phu Yen and a part of Dac Lac, Lam Dong and Ninh Thuan. To meet
increasing cargo volume and accommodate larger vessels, expanded
berth and deeper quay are necessary (see Figure 5.3.8).

Up to 2001: A pier (berth: 160mx2) will be built to the south. The outer
berth will accommodate 10,000 DWT vessels and the inner berth is for
3,000-5,000 DWT vessels. Capacity will be 0.6 million tons/year and
required investment capital is US$ 6 million.

Up to 2005: The expansion of the storage area and extension of berth for
15,000 DWT container vessels will be completed. Capacity will be 1.0
million tons/year. Investment capital required is US$ 9 million.

Up to 2010: Expansion of storage area to increase port capacity up to 2

million tons/year will be completed. Estimated investment cost is US$ 45
million.

3) Port Development in Southern Vietnam

One-third of containers in the south will be handled at Ba Ria-Vung Tau area,

while two thirds will be handled at HCMC and only a small volume will be
handled at Mekong delta. Six hundred thousand TEU shall be handled at the
new container terminal in Ba Ria-Vung Tau and 1.2 million TEU in HCMC in
2010(but this is an increase of only around 400 thousand TEU from 1998).
The center of container traffic will be shifting from HCMC to Ba Ria-Vung Tau.
In Mekong delta, there are many small ports to be improved. The average
size of vessel is estimated at 5,000-7,000 DWT, therefore a big container
terminal is not suitable and mobile crane would seem the standard style of
operation.

(1) Ba Ria – Vung Tau General Ports

The urban area between HCMC and Vung Tau via Bien Hoa is the most
dynamic economic zone where various investments in industry, commerce,
tourism, and other services are located. These establishments
considerably rely on ports along Saigon River. To further promote
industrialization, around 15 ports are planned along Thi Vai River and
Vung Tau Peninsula. Only a few ports have so far been developed such
as Go Dau and Ba Ria Serece.

The necessity of a large general port in this area is due to its potential for
economic development and its deep water depth (Thi Vai River: 9-12
meters) and Vung Tau Peninsula: more than 15 meters). Saigon River

II-5-13
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

ports cannot receive vessels more than 20,000 DWT although

intraregional trunk shipping services are mainly provided by vessels of
30,000-50,000 DWT. Therefore a large general port here is expected to
be a gateway seaport in southern Vietnam.

So far, there are three port candidates, namely, Phu My (Thi Vai), Cai Mep,
Ben Dinh-Sao Mai (Vung Tau). The first two ports will not be enough to
meet port demand in 2020, although they may be the fast and economical
solutions to meet port demand in 2010.
Table 5.3.1
Candidates for Ba Ria-Vung Tau Gateway Port

Ben Dinh Sao Mai

Phu My (Thi Vai) Cai Mep
(Vung Tau)
Promoting VINAMARINE Belgium Formerly Evergreen
Organization
Water Depth 9 - 12 meters 9 - 12 meters 15 – 16 meters
along Access
Channel
Vessel Traffic Difficult due to narrow Slightly difficult due to Easy
Management waterway river entrance
Ultimate Port 14 million tons/year 4 million tons/year with No limitation because of
Capacity with a berth length of a berth length of 900m possible reclamation
2,000m
Construction Cost Economical due to Economical due to Expensive due to
riverside riverside protection facilities
against waves

In developing a gateway seaport, the following should be duly considered:

• Allocation of enough capacity on water and on land,
• Provision of sufficient and efficient access transport with HCMC, and
• Concentrated investment on the best site from the long-term and
subregional (including Cambodia) viewpoint.

Therefore the proposed development scenario is as follows:

Up to 2005: The Master Plan Study on the South Vietnam Port System
will be conducted with technical assistance from JICA to identify the best
port site among the Vung Tau-Thi Vai port candidate sites. A detailed port
engineering design will be determined for the selected site.

Up to 2010: Several berths will be constructed to handle 10 million tons of

cargo, mostly containerized.

Up to 2020: A full-scale general port will be in operation consisting of

exclusive container berths, specialized and general cargo berths to
handle 30 million tons of cargo and to accommodate large inter-regional
liner vessels.

II-5-14
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

(2) Ho Chi Minh City General Ports

Saigon Port has been the most important port of Vietnam since 1860. It is
49 nautical miles away from Buoy No. 1 positioned at the river mouth. The
navigational water depth of 8.5 meters on average is less affected by the
season and not badly affected by typhoon. The route can receive 20,000
DWT vessels during high tide. The other three major general ports are
located near Saigon Port. New Saigon Port and VICT mostly handle
container cargo.

These four ports have different port operators under different agencies,
thus promoting competition. Although port traffic is increasing, there is
little space for physical expansion and thus the ports should instead
improve operations. Except for VICT, the ports use old-fashioned
cargo-handing systems. Congested road and water traffic around the
ports should also be mitigated by infrastructure development and traffic
management.

Table 5.3.2
Four General Ports along Saigon River

Saigon New Saigon Ben Nghe VICT Total

Management Body VINALINES Ministry of HCM City Private (JV -
Defense Company)
Present Facilities Berth length: Berth length: Berth length: Berth length:
1 CY
Future Expansion Handling Transfer to Cat Handling 1 More CY
Eqpmt Lai Eqpmt
Port Capacity 1998 8.5 3.5 1.5 1.3 14.8
(mil. tons/year) 2005 9.0 4.0 4.0 5.0 22.0
2010 10.0 4.0 5.0 6.0 25.0

The proposed development scenario is as follows:

Up to 2005: VICT will add one container berth/terminal. The other three
ports will improve their cargo-handling operation. The Trans-HCMC Road
with Thu Thiem Tunnel will be constructed. Within the project, the
construction of the tunnel and its access road to the Saigon River Port
Group will be prioritized. Vessel traffic service (VTS), a traffic control
measure, will commence along the congested navigational ways with
Canadian ODA.

Up to 2010: New Saigon Port will be transferred to Cat Lai. The other
three ports will improve port productivity with increasing ship calls.
Up to 2020: No capacity expansion is expected at the four ports. Some
private ports will be constructed downstream such as Nha Be, Hiep
Phuoc and Long An to complement new industrial estates.

II-5-15
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

(3) Can Tho Port Development

The port system of the Mekong delta region consists of eight existing
ports, located mainly on Tien River, Hau River and some sea-mouth areas,
whose key center is Can Tho port. Being a key, multifunctional port in the
region, it supports the region’s economy. Can Tho port (see Figure 5.3.10)
can accommodate general and container ships of 10,000 DWT.

Up to 2005: Improving, upgrading and widening berths, warehouse and

yards to establish a 320-m berth for 2x10,000 DWT vessels. The capacity
will be 1.6 million tons/year. Investment capital is US$ 22million.

Up to 2010: A new port zone at Cai Sau, including 610 m pier and 2
berths for 7,000 DWT vessels and 2 berths for 10,000 DWT container
vessels, will be built. Capacity will be 3 million tons/year. Investment
capital is US$ 20 million.

Access channel from river mouth requires a total US$ 22 million including
US$ 4 million (up to 2005) and US$ 18 million (up to 2010).

4) Industrial Port

For bulk cargoes, such as cement, coal and petroleum, port facilities shall be
improved to handle increasing volumes in line with industrial development.

Table 5.3.3
Industrial Port Projects

Capacity, 2010 Investment up to 2010

Project
(million tons) (VND bil.)
(Cement)
Hoan Bo Cement Port 2.5 180
Cat Lai Cement Port 1.5 60
Ching Fong Cement Port 2.0 150
Binh Tri Cement Port 1.6 100
(Coal)
Cam Pha Coal Port 5.0 200
Hon Gai Coal Port (replacing) 1.3 100
(Petroleum)
B-12 Oil Port (replacing) 2.0 30
Nha Be Petroleum Port 5.0 120
TOTAL 20.9 940

II-5-16
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

Figure 5.3.1
Development Plan of Cai Lan Port

Figure 5.3.2
Development Plan of Chua Ve Port

II-5-17
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

Figure 5.3.3
Development Plan of Cua Lo Port

Figure 5.3.4
Development Plan of Lien Chieu Port

Lien Chieu

II-5-18
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

Figure 5.3.5
Development Plan of Danang Port

Figure 5.3.6
Development Plan of Dung Quat Port

Dung Quat

II-5-19
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

Figure 5.3.7
Development Plan of Quy Nhon Port

Figure 5.3.8
Development Plan of Nha Trang Port

II-5-20
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

Figure 5.3.9
Development Plan of Ports in HCMC

II-5-21
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

Figure 5.3.10
Development Plan of Can Tho Port

6) Local Port Development

In anticipation of bigger vessels, the infrastructure and handling system of

local ports would be improved, since even small improvements and minor
maintenance would contribute to a more efficient port operation.

Table 5.3.4
Local Port Projects

Capacity in 2010 Investment up to 2010

Project
(million tons) (VND billion)
North Bai Tho Port (Quang Ninh) 0.3 15
Cua Cam Port (Hai Phong) 0.5 10
Diem Dien Port (Thai Binh) 0.3 20
Hai Thinh Port (Nam Dinh) 0.45 20
Center Le Mon Port (Thanh Hoa) 0.6 45
Ben Thuy Port (Nghe An) 0.25 8
Xuan Hai Port (Ha Tinh) 0.3 20
Gianh Port (Quang Binh) 0.4 20
Cua Viet Port (Quang Tri) 0.25 20
Thuan An Port (Thua Thien Hue) 0.4 30
Song Han Port (Danang) 0.6 40
Thi Nai Port (Binh Dinh) 0.4 25
Ba Ngoi Port (Khanh Hoa) 0.6 45
TOTAL 5.35 318

II-5-22
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

7) Port EDI Development

The EDI system allows the exchange of basic information and schedule about
cargoes and vessels. Individual companies, such as ocean liners and trading
firms, have urged the adoption of this system, but stronger efforts will be
required to promote its use by all industries involved in international trading.
To facilitate this target, at the 1993 general meeting of the Transportation
Working Group of the APEC, commercial activities of international
transportation service agencies for the spread of and promotion of the EDI
system in the APEC region were approved.

Phase I up to 2005: Planning and evaluation shall be conducted on the EDI

system. The pilot program will be installed and a simulation will be applied on
all stages of trading activities to clarify necessary rearrangement of relevant
systems. Investment cost is US$ 2 million.

Phase II up to 2010: The EDI system shall be established and will be made
compatible with all related international maritime systems. VINAMARINE, port
authorities and international general ports will be connected through EDI links.
Investment cost is US$ 8 million.

5.4 Investment Plan

The port development plan includes the construction of a new berth and
rehabilitation of the existing one. The required number of berths by project is
listed in Table 5.4.1. Without an available feasibility study, the exact number
cannot be determined. The investment cost is estimated at approximately
US$ 1.4 billion (see Table 5.4.2).

Table 5.4.1
Required Number of Berths by Project up to 2010

General Cargo
No. Project Container Berth Total Berth
Berth
3-1 Cai Lan Port Expansion 5 3 8
3-2 Hai Phong Port 0 2 2
3-3 Cua Lo Port Expansion 4 0 4
3-4 Lien Chieu Port 2 1 3
3-5 Danang Tiensa Port Restructuring
3-6 Dung Quat Specialized Port Before DD
3-7 Qui Nhon Port Expansion 3 1 4
3-8 Nha Trang Port Expansion 3–4 0 3–4
3-9 Ba Ria Vung Tau Port 5–7 3–5 8 – 12
3-10 HCMC Port Development 11 – 12 3 13 – 16
3-11 Can Tho Port Development 4 2 6
Note: The number includes new and rehabilitated berths.

II-5-23
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

Table 5.4.2
Investment Cost, 2001 – 2010

Project Cost (US$ million)

3-1 Cai Lan Port Expansion 128.1
3-2 Hai Phong Port 138.0
3-3 Cua Lo Port Expansion 49.3
3-4 Lien Chieu Port 158.0
3-5 Danang Tien Sa Port 172.0
3-6 Dung Quat Specialized Port 130.0
3-7 Qui Nhon Port Expansion 36.0
3-8 Nha Trang Port Expansion 57.0
3-9 Ba Ria-Vung Tau Port 206.0
3-10 HCMC Port Development 200.0
3-11 Can Tho Port Development 64.0
3-12 Industrial port Development 67.0
3-13 Other Local and Private Ports 22.7
TOTAL 1,428.1

II-5-24
 Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports

The tentative investment schedule is shown below.

Figure 5.4.1
Project Implementation Schedule, 2001 – 2010

No. Project 01 02 03 04 05 06 07 08 09 10
3-1 Cai Lan Port Expansion
Stage 1
Stage 2

3-2 Hai Phong Port

st
1 Berth
nd
2 Berth
Channel Dredging
3-3 Cua Lo Port Expansion
Stage 1
Stage 2
3-4 Lien Chieu Port

3-5 Danang-Tien Sa Port

Rehabilitation
Expansion
3-6 Dung Quat Specialized Port

3-7 Qui Nhon Port Expansion

Rehabilitation
Expansion
3-8 Nha Trang Port Expansion

3-9 Ba Ria-Vung Tau Port

Domestic General Port
International Container P.
3-10 HCMC Port Development

3-11 Can Tho Port Development

Can Tho
Cui Sao

II-5-25
APPENDICES
 APPENDIX A
DETAILED PORT DEVELOPMENT PLAN AND INVESTMENT PLAN
BY THE GOVERNMENT OF VIETNAM

Table A.1
List of Major Ports up to 2010

Present status Development Planning

Clasiffication Investment form
Vessels
No. Name Upgrade New
Operating Size General Specialized
(DWT) Improve Cons-
Port Port
-ment truction
Total Whole Vietnam
I PORT GROUP IN NORTH
1 CL Cai Lan x THC X
2 HP Hai Phong x THC X
3 CP Cam Pha coal port x x X
4 CS The port of Campha steel Factory X
5 HG Hon Gai & Cau Trang coal ports x 15000 x
6 HB Hoanh Bo – Quang Ninh cement ports x X
7 B12 B12 Quang Ninh specialized port for oil x 30000 x
8 MC Mui Chua port x X
9 DC Dien Cong coal port x 5000 x
10 CC Cua Cam port (Hai Phong) x 5000
11 NC Northern Container Co. port x X
12 DVI Port in Dinh Vu industrial zone x X
13 DVG Dinh Vu General port x X
14 BD Bach Dang General port x X
15 TL Thuong Ly oil port x 3000 x x
16 HP HP gaz & oil port X
17 CAL Caltex Join Venture port (S.Gia-HP) X
18 OIL Oil product port serving for Dinh Vu x X
Industrial petrol chemical
19 CC Chinfon cement & HP cement port x X
20 TV Transvina Joint Venture port x x
21 HD 128 Hai Doan port x 3000 x x
22 DH Port in Dong Hai industrial zone (HP) x x
23 DD Diem Dien port (Thai Binh) x 600 x x
24 HT Hai Thinh port (Nam Ha) x 1000 x x
25 NP Ninh Phuc port (Ninh Binh) x 1000 x x
Potential ports
+ Bach Dang River port
+ Oild river port in Chanh downstream
II PORT GROUP IN NORTH – CENTRAL
26 CL Cua Lo - Ben Thuy port x 10000 THC x
27 VA Vung Anh port THC X
28 LM Le Mon port x 1000 x x
29 NS Nghi Son port (general & specialized) THC x X
30 NH Nghi Huong oil port x 3-5000 x x
31 XH Xuan Hai port x 2000 x x
32 TK Thach Khe - Ha Tinh port x X
33 HH Hung Hoa oil port x 1000 x
Potential ports: Nghi Son port
III PORT GROUP IN MIDDLE- CENTRAL
34 DN Danang port x THC
+ Tien Sa - Han river 15000 x
+ Lien Chieu X
35 CM Chan May port THC X
36 DQ Dung Quat port THC x X
+ Petrol chemical refinery zone
+ General cargo zone
+ Bulk cargo zone
+ oil service
37 GN Gianh port x 1000 x x
38 OIL Oil port in Gianh river (Quang Binh) x X
39 CV Cua Viet port (Quang Tri) x x
40 TA Thuan An port (Thua Thien Hue) x 600 x x
41 OIL Thuan An oil port x X
42 234 234 port (Danang) x 2-3000 x x

A-1
(Table A.1continued)
Development Planning
Up to 2003 Up to 2010
Low High Low High Note
No. Length of Vessels Length of Vessels
Capacity Capacity Capacity Capacity
Berth Size Berth Size
(million (million (million (million
(m) (DWT) (m) (DWT)
tons) tons) tons) tons)
Total 89.8 101.9 230.8 266.1
I 20.5 23.5 56.2 68.9
1 CL 1711 1.8 2.8 40000 5236 16 17 50000 Belongs to Central Govern.
2 HP 2858 6.2 6.2 10000 3180 8 8.5 10000 Belongs to Central Govern.
3 CP 569 4 4.1 30000 753 5 5.2 50000 Belongs to Coal General Co.
4 CS 4 5 30-50000
5 HG 280 1 1.2 20000 190 1.8 2 5000 After 2000, moves to Cau
Trang
6 HB 480 1.2 1.4 20000 640 3.5 3.8 20000
7 B12 1.5 2 30000 1 port 3 3.5 30000 After 2000, moves to other
place
8 MC 1 port 0.1 0.2 1000 1 port 0.2 0.2 2-3000 Provincial management
9 DC 200 0.3 0.3 5000 200 0.3 0.4 5000
10 CC 265 0.4 0.4 3000 350 0.8 0.8 3000
11 NC 160 0.5 0.6 10000 2 x 160 1 1 10000
12 DVI 500-1500 2 6.5 10000 Serving for Dinh Vu
industrial zone
13 DVG 2000 2.5 6 10000 Develops HP port to Dinh Vu
14 BD 1200 2.5 2.5 10000 Develops HP port to Bach
Dang river
15 TL 2 ports 0.3 0.3 3000 2 ports 0.3 0.3 3000
16 HP 3 ports 0.3 0.4 5-10000 3 ports 0.4 0.5 5-10000 (Dai Hai, JV Total, Petec)
17 CAL 1 port 5000 1 port 5000
18 OIL 1000 10000
19 CC 540 1.2 1.4 5000 540 2.4 2.4 5000 Serving for cement factory
20 TV 120 0.3 0.4 10000 120 0.3 0.4 10000
21 HD 605 3-5000 905 3-5000 Belongs to National Defense
Ministry
22 DH 150 10000 300 10000 Provincial management
23 DD 74 0.1 0.2 600 148 0.2 0.3 600 Provincial management
24 HT 280 0.3 0.4 1000 494 0.5 0.6 2000 Provincial management
25 NP 339 1 1.2 1000 339 1.5 2 1000 Belongs to Central Govern.

4 ports Developing general port

Serving for petrol
II 3.7 5.3 19.1 21.3
26 CL 1036 1.4 2 10000 1561 2.9 3.5 10000 Belongs to Central Govern.
27 VA 285 0.6 1.1 10000 1320 2.6 3.9 30000 Belongs to Central Govern.
28 LM 219 0.3 0.4 1000 219 0.6 0.7 1000 Provincial management
29 NS 790 1.2 1.5 30000 1240 2.5 2.5 30000 Will build general port after
2000
30 NH 2 ports After 2000 will be moved
31 XH 163 0.1 0.2 1000 0.3 0.5 1000 Provincial management
32 TK 10 10 50000 Serving for Thach Khe ore
33 HH 1 port 0.1 0.1 1200 1 port 0.2 0.2 1200

III 19.1 20.6 43.1 46.1

34 DN Belongs to Central Govt.
1850 2.2 2.3 10-40000 1220-151 3 3.5 50000
0
700 1.8 1.9 30-50000 2910 8.5 8.9 50000
35 CM 200 0.3 0.4 30000 600 2.2 2.3 40000 Provincial management
36 DQ Serving for refinery factory
No. 1
7 ports 13 13.5 80000 7 ports 25 26 200000
200 0.2 0.3 10000 2000 2 2.5 30000
4 ports 50000
730 10000
37 GN 133 0.2 0.3 1000 133 0.3 0.4 1000 Provincial management
38 OIL 1 port 0.1 0.1 1000 0.1 0.1 1000
39 CV 110 0.1 0.2 1000 110 0.1 0.2 1000 Provincial management
40 TA 280 0.2 0.2 1000 280 0.2 0.2 2000 Provincial management
41 OIL 1 port 0.1 0.2 1000 1 port 0.2 0.3 2000
42 234 275 0.2 0.3 2-3000 275 0.3 0.4 2-3000 Belongs to National Defense
Ministry

A-2
(Table A.1 continued)
No. Name Present status Development Planning
Operating Vessels Classification Investment form
Size General Specialized Upgrade New
(DWT) Port Port Improve- Cons-
ment truction
43 DN Oil port in Danang region x 30000
+ My Khe
+ Nai Hien x 1-3000
+ Lien Chieu x 7000
44 HV Hai Van import Klinke port X x
45 SH9 No. 9 port (belong to Danang sea x 3000 x X
transport Co.)
46 KH Ky Ha, Tam Ky ports (Quang Nam) x x
47 SK Sa Ky port (Quang Ngai) x 1000 x X
Potential ports
+ Nam O Port
IV PORT GROUP IN SOUTH-CENTRAL
48 QN Qui Nhon port
+ Qui Nhon existing port x 10000 THC X
+ Nhon Hoi port (Qui Nhon - Binh Dinh) x

49 NT Nha Trang x 10000 THC X

50 OIL Qui Nhon oil port x 3000 X X
51 TN Thi Nai x 5000 x
52 VR Vung Ro port x x
53 BN Ba Ngoi port x X
54 HK Hon Khoi port (Khanh Hoa) x 600 X
55 DM Dam Mon specialized port exporting x 30000 X
sand
56 MC Mui Chut oil port (Khanh Hoa) x 3-5000 X X
57 PQ Phu Qui port (sea food & serving for island district) x x

Potential ports
+ Van Phong-Cam Ranh-Khanh Hoa port
+ Mui Ne port
V PORT GROUP IN HCMC - VUNG TAU - THI VAI
HCMC
58 SG Sai Gon port x 15000 THC X
59 NB Sai Gon port widening to Nha Be x x
60 BN Ben Nghe port x 15000 THC X
61 TC Tan Cang (Tan Cang & Cat Lai) x 10000 THC X
62 VI Singapore Join Venture port (VICT) x
63 SW Southern waterway general Co. port x x X
64 TT Tan Thuan process industrial zone x

65 VG Vegetable port x 10000 x X

66 LT Lotus port x x
67 OIL Plant oil port x 10000 X X
68 GS Sai Gon Gas port x
69 OIL Nha Be oil port x 25000 X X
70 PE Sai Gon oil port x 25000 X X
71 PC Petchim oil port
72 PT Petec port x 25000 X X
73 VT VITAICO port x 20000 X X
74 VH Vinh Hung wood port (Dong Nai) X x
75 CM Cat Lai cement port x 10000 X x
76 HP Hiep Phuoc zone ports X x
- Oil port of Power Station
- Nghi Son cement port
- General port
Potential ports
+ Hiep Phuoc port
+ Phuoc Luong port (Dong Nai)
+ Nga Bay - Can Gio river port

A-3
(Table A.1 continued)
Development Planning
Up to 2003 Up to 2010
Low High Low High Note
No. Length of Vessels Length of Vessels
Capacity Capacity Capacity Capacity
berth size berth size
(million (million (million (million
(m) (DWT) (m) (DWT)
tons) tons) tons) tons)
43 DN 3 ports 0.5 0.6 30000 1 1 30000 After 2000 move My Khe to Thanh
Khe

3000 Will be moved after 2000

7000 Belongs to National Defense
Ministry
44 HV 2 ports 5000 2 ports 5-10000
45 SH9 1 port 3000 1 port 3000 Provincial management
46 KH 1 port 0.2 0.3 3000 2 ports 0.2 0.3 3000 Provincial management
47 SK 1 port 1000 1 port 1000 Provincial management

IV 2.8 3.4 7 8.2

48 QN
700 1.1 1.2 10000 700 2.4 2.5 15-20000 Belongs to Central Govern.
800 2 2.5 30000 Serving for Nhon Hoi-Binh Dinh
economic zone
49 NT 600 0.6 0.7 20000 600 0.6 0.8 20000 Belongs to Central Govern.
50 OIL 1 port 0.2 0.2 10000 0.3 0.3 10000
51 TN 1 port 0.2 0.3 5000 1 port 0.4 0.5 5000 Provincial management
52 VR 100 (0.2-0.3) 5000 150 (0.3-0.4) 10000 Provincial management
53 BN 84 0.2 0.3 15000 180 0.4 0.5 20000 Provincial management
54 HK 60 0.1 0.1 600 0.1 0.1 600 Import salt - provincial management
55 DM 1 port 0.2 0.3 30000 0.4 0.5 30000 Import salt - provincial management
56 MC 1 port 0.2 0.3 10000 0.4 0.5 10000
57 PQ 1000 1-2000 Aquatic base combined with
general port - provincial
management

Transshipment port

V 38.2 42.8 96.8 111.3

24.9 27.9 32.6 35.9
58 SG 2360 8.5 9.5 20000 2604 9 10 25000 Belongs to Central Govern.
59 NB 340 20000 673 2.5 3.5 20000 Belongs to Central Govern.
60 BN 672 1.5 1.6 20000 697 2.1 2.3 2000 Provincial management
61 TC 1072 3.6 4.3 10-15000 1192 3 3.5 10-15000 Belongs to National Defense
Ministry
62 VI 290 0.6 0.8 20000 580 1.4 1.5 20000
63 SW 300 10000 10000 May be join venture with VICT
64 TT 420 1 1 20000 600 2 2 20000 Serving for Tan Thuan process
industrial zone
65 VG 225 0.4 0.5 15000 225 0.4 0.5 15000 Belongs to Vegetable General Co.
66 LT 140 0.2 0.3 10000 140 0.2 0.3 10000
67 OIL 170+ 1tru 0.5 0.6 15000 275 & 1 1.2 20000 Serving for land oil vessels &

.. general cargo
68 GS 1 port 5000 1 port 10000 Provincial management
69 OIL 10 ports 3 3 25000 13 ports 4.5 4.5 25000
70 PE 2 ports 0.6 0.6 25000 2 ports 1 1 25000 Provincial management
71 PC 0.5 0.6 25000 4.5 4.5 25000
72 PT 1 port 0.4 0.4 25000 1 port 1 1 25000
73 VT 1 port 0.2 0.3 25000 1 port 0.3 0.4 25000
74 VH 1 port 0.2 0.2 25000 1 port 0.5 0.5 25000
75 CM 280 1.7 1.7 15000 280 2.2 2.2 15000
76 HP 790 2 2.5 20000 2000 6 7 25000 Serving for Hiep Phuoc Industrial
zone

(35-40)
(4-5)

A-4
(Table A.1continued)
Present status Development Planning
Classification Investment Form
Vessels
No. Name Upgrade New
Operating Size General Specialized
(DWT) Improve- Cons-
Port Port
ment truction
77 TV Thi Vai general port THC x
78 DN Dong Nai port X 1000- x
79 VD Vedan port X 5000 x x
80 GD Go Dau A port X 3000 THC x
81 LT Long Thanh supe port X 3000 x x
82 GDG Go Dau gas port (Dong Nai) X 7000 x x
83 GD Go Dau B port THC x
84 PM Phu My general + container port x x
85 OIL Oil seaport of Phu My Power Station x x
86 GP General, join venture port (VSC + V.Tau ship + Koei + other join x x
venture ports)
87 BS Ba Ria Serece (general & bulk cargo) X 30000 x x
88 GP General & bulk cargo ports x
89 CM Cement port (Chinfon - Hai Phong
) x x
* Cai Mep River
90/91 FD Food & foodstuff port (included Vinaflour x x
& Vinafood)
92 CP Container port (join venture with Belgium) x x
93 OIL Oil port (LGP, Saigon Petrol) x
94 LS Long Son port (specialized port for oil, gas, x x
oil product & exploiting oil base)
* Vung Tau Region
95 VT Vung Tau International port x x
96 CL Cat Lo general port (Vung Tau) X 5000 x x
97 OIL Oil service port (PTSC) X 10000 x x
98 VP VietsoPetrol port X 5-10000 x x
99 K2 K2 oil port X 3000 x x
Potential ports
+ Go Dau C general port
+ Phuoc An Port
+ Cai Mep river mouth ports
VI PORT GROUP IN MEKONG DELTA
100 TN Can Tho port (included Hoang Dieu, X 3-5000 THC x
..
existing Tra Noc & newly built Cai Cui)
101 OIL Can Tho oil & gas port
102 CL Cao Lanh (Dong Thap) X 2000 x x
103 VT Vinh Thai (Vinh Long) X 2500 x x
104 MTI My Thoi (Long Xuyen) X 3000 x x
105 MT My Tho (Tien Giang) X 2500 x x
106 VN Viet Nguyen (My Tho) x x
107 HC Hon Chong (Kien Giang) X 1000 x x
108 NC Nam Can X <2000 x x
109 LA Long An x x
110 DN Dai Ngai x x
111 TC Tra Cu x x
112 CM Binh Dinh cement x x
VII PORT GROUP IN WEST-SOUTHERN
ISLANDS
113 AT An Thoi & Duong Dong floating port
VIII PORT GROUP IN CON DAO
114 BD Ben Dam port x x
Potential ports
+ Hon Thom port
+ Con Dao port

A-5
(Table A.1 continued)
Development Planning
Up to 2003 Up to 2010
Low High Low High Note
No. Length of Vessels Length of Vessels
Capacity Capacity Capacity Capacity
Berth Size Berth Size
(million (million (million (million
(m) (DWT) (m) (DWT)
tons) tons) tons) tons)
77 TV 200 0.5 0.6 30000 2000 6.5 10 30000 Belongs to Central Govern.
78 DN 1 port 1-2000 1 port 1-2000 Provincial management
79 VD 100 0.4 0.4 5-10000 100 & 1 1 1.5 10-15000


80 GD 100 0.2 0.3 5-10000 350 0.8 1 10-15000 Provincial management
81 LT 100 0.2 0.3 3-5000 180 0.3 0.3 3-5000
82 GDG 1 port 5-10000 1 port 10000
83 GD 100 5-10000 1000 3 4 10-15000 Provincial management
84 PM 350 0.5 0.6 30000 1960 9 9.5 30000
85 OIL 200 0.2 0.2 30000 1 port 1 1.2 30000
86 GP 1960 0.5 0.6 30000 9 9.5 30000
87 BS 130 0.3 0.4 30000 700 2 3 30000
88 GP 460 30000 460 (3.5-4) 30000 Serving for Power St. &
Factories
89 CM 400 1 1.2 20000 400 (2 3.5 4 20000
ports)

90/91 FD 450 0.3 0.3 30000 500 1 1.5 30000

(2 ports) (2 ports)
92 CP 30-50000 3.5 4 30-5000
93 OIL 500 0.8 1 30-50000 1300 3.5 4.5 50000
94 LS (10-11) 30000

95 VT 1600 8 8.5 55000 2400 22 24 55000

96 CL 250 0.2 0.3 5000 250 0.8 1 10000
97 OIL 400 - - 10000 800 - 10000
98 VP 1500 - - 10000 1500 - 10000
99 K2 1 port 0.2 0.2 3000 1 port 0.3 0.4 7000
30 ports 15-55000

VI 5.5 6.3 8.6 10.3

100 TN 440
.. 2 2.5 5-10000 880 3.5 4.5 10000 Belongs to Central Govern.

101 OIL 1 port 5000 1 seaport (0.5-1) 5000

102 CL 150 0.3 0.3 3000 150 0.3 0.4 5000 Provincial management
103 VT 80 0.2 0.3 2000 160 0.4 0.5 2000 Provincial management
104 MTI 122 0.3 0.3 5000 200 0.5 0.6 5000 Provincial management
105 MT 124 0.3 0.4 3000 224 0.6 0.7 5000 Provincial management
106 VN 5000 5000 Provincial management
107 HC 65 0.1 0.2 1000 130 0.3 0.3 2000 Provincial management
108 NC 65 0.1 0.1 1000 130 0.2 2000 Provincial management
109 LA 150 0.3 0.3 5000 350 0.4 0.5 5000 Provincial management
110 DN 150 0.2 0.2 5000 200 0.4 0.5 5000 Provincial management
111 TC 100 0.2 0.3 5000
112 CM 2 x 150 1.7 1.7 10000 2 x 150 1.8 2 10000
VII
113 AT 60000GR 60000GR Serving for passenger vessels
T T
VIII
114 BD 2000 2000 Aquatic base combined with
general port

(50-55) 20-30000
(55-60) 55000
Notes: 1. At the end of 1997 Vietnam had 70 operating ports with 22 km of berth. Cargo volume
throughput is as follows: 1995 - 34,000,000 tons; 1996 - 39,800,000 tons; 1997 -
45,763,000 tons (not included are offshore ports used in exploiting & exporting oil). The
cargo volume increased 15.95% annually.
2. In the development planning of Vietnam’s seaport system up to 2010, there are plans for
offshore ports where cargo can be loaded/unloaded and will service Vietnamese industrial
shipping industry, specifically- floating ports used in exploiting and exporting oil.
3. At column "General Port" is written THC, referring to main general port of a port group.

A-6
 Table A.2
Investment Capital for Ports up to 2020

(unit: VND billion)

Year2000 Year2010 Year2020 Total
1.1 Major Sea Ports in the North:
(1) Hai Phong Port 330 810 900 2,040
(2) Cai Lan Port: 300 1,100 3,500 4,900
(3) Hoanh Bo Cement Port: 170 180 10 360
(4) Bai Tho Port (Quang Ninh) 5 15 45 65
(5) Cua Cam Port (Hai Phong) 8 10 65 83
(6) Diem Dien Port (Thai Binh) 10 20 45 75
(7) Hai Thinh Port (Nam Dinh) 15 20 50 85
(8) B-12 Oil and Petrol Port (Quang Ninh) 5 30 200 235
(9) Cam Pha Coal Exporting Port (Quang Ninh) 30 200 300 530
(10) Hon Gai Coal Exporting Port (Quang Ninh) 5 100 300 405
(11) Dinh Vu Port (Hai Phong) - 700 900 1,600
Sub Total 878 3,185 6,315 10,378
1.2 Major Sea Ports in the Central Region:
(12) Le Mon Port (Thanh Hoa) 25 45 40 110
(13) Nghi Son Port (Thanh Hoa) - 400 560 960
(14) Cua Lo Port (Nghe An) 80 400 200 680
(15) Ben Thuy Port (Nghe An) 5 8 30 43
(16) Xuan Hai Port (Ha Tinh) 8 20 35 63
(17) Vung Ang Port (Ha Tinh) 70 350 460 880
(18) Gianh Port (Quang Binh) 35 20 40 95
(19) Cua Viet Port (Quang Tri) 18 20 45 83
(20) Thuan An port (Thua Thien Hue) 18 30 60 108
(21) Chan May Port (Thua Thien Hue) - 350 600 950
(22) Lien Chieu Port (Da Nang) - 700 800 1,500
(23) Tien Sa Port (Da Nang) 100 400 550 1,050
(24) Song Han Port (Da Nang) 10 40 40 90
(25) Dung Quat Port (Quang Ngai) 200 1,000 800 2,000
(26) Qui Nhon Port (Binh Dinh) 130 380 300 810
(27) Thi Nai Port (Binh Dinh) 20 25 65 110
(28) Nha Trang Port (Khanh Hoa) 80 120 60 260
(29) Ba Ngoi Port (Khanh Hoa) 20 45 25 90
(30) Van Phong Port (Khanh Hoa) - - - -
Sub Total 819 4,353 4,710 9,882
1.3 Main Ports in the Southern Area
(31) Saigon port 600 400 300 1,300
(32) New Saigon Port: - 600 400 1,000
(33) Ben Nghe Port 100 120 250 470
(34) Singapore-Tan Thuan Joint Veture Port. 170 280 150 600
(35) Go Dau Port. 50 100 160 310
(36) Phu My Port 300 1,500 1,300 3,100
(37) Ben Dinh - Sao Mai Port 1,800 2,800 2,200 6,800
(38) Cat Lo Port (Vung Tau) 60 80 170 310
(39) Nha Be Petroleum Port (HCM City) 70 120 150 340
(40) Cat Lai Cement Port (HCM City) 170 60 150 380
(41) Ching Fong Cement Port (Ba Ria-Vung Tau) 180 150 70 400
(42) Can Tho Port 300 280 300 880
(43) My Tho Port (Tien Giang) 90 50 65 205
(44) My Thoi Port (An Giang) 100 35 75 210
(45) Vinh Thai Port (Vinh Long) 65 80 100 245
(46) Dai Ngai Port (Soc Trang) 40 75 120 235
(47) Cao Lanh Port (Dong Thap) 80 45 120 245
(48) Binh Tri Cement Port (Kien Giang) 220 100 125 445
Sub Total 4,395 6,875 6,205 17,475
Total 6,092 14,413 17,230 37,735

A-7
 APPENDIX B
CONSTRUCTION COST AND PRODUCTIVITY IN PORT DEVELOPMENT

Cost Estimation for Standardized Facilities

The unit prices of the construction and the procurement of standardized facilities are
estimated using past construction projects and cost estimations of other feasibility
studies. The construction costs of each standardized facility per unit berth length (m) or
unit wharf are summarized in the following tables:

Table B.1
Transshipment Type Port Terminal (-16 m Deep)

Facilities Unit Dimension US$

I. Infrastructure 30,500,000
Berth Length m 350 17,500,000
Depth m 16
2
Terminal Area Marshalling Yard m 60,000
2
CFS m 4,000,000
2
Others m 40,000
3
Earth Works Dredging m 1,000,000
3
Reclamation m 100,000 9,000,000
2
Slope Protection m 20,000
II. Equipment 28,760,000
Quay Crane 40t units 3
Transfer Crane 40t units 12
Side Lifter 40t units 4
Tractor Head units 20
Chassis units 40
Forklift 5t units 8
III. Management 4,090,000
2
Office m 1,000
Gate units 8
Utilities LS 1
IV. Related Facilities 5,000,000
Access Road LS 1
Pilotage LS 1
Electric and Water Supply LS 1
V. Total 68,350,000

B-1
 Table B.2
Intra-Asia Container Port Terminal (-12 m Deep)

Facilities Unit Dimension US$

I. Infrastructure 21,900,000
Berth Length m 280 9,800,000
Depth m 14
2
Terminal Area Marshalling Yard m 65,000
2
CFS m 5,000 4,450,000
2
Others m 21,250
3
Earth Works Dredging m 800,000
2
Reclamation m 90,000 7,650,000
2
Slope Protection m 15,000
II. Equipment 16,680,000
Quay Crane 40t units 2
Transfer Crane 40t units 8
Side Lifter 40t units 2
Tractor Head units 12
Chassis units 24
Forklift 5t units 3
III. Management 3,385,000
2
Office m 800
Gate units 5
Utilities LS 1
IV. Related Facilities 5,000,000
Access Road LS 1
Pilotage LS 1
Electric and Water Supply LS 1
V. Total 46,965,000

B-2
 Table B.3
Domestic Container Port Terminal (-10 m Deep)

Facilities Unit Dimension US$

I. Infrastructure 15,910,000
Berth Length m 250 7,500,000
Depth m 12
2
Terminal Area Marshalling Yard m 43,000
2
CFS m 3,500 3,160,000
2
Others m 18,500
3
Earth Works Dredging m 500,000
2
Reclamation m 65,000 5,250,000
2
Slope Protection m 10,000
II. Equipment 15,680,000
Quay Crane 40t units 2
Transfer Crane 40t units 8
Side Lifter 40t units 2
Tractor Head units 12
Chassis units 24
Forklift 5t units 3
III. Management 2,250,000
2
Office m 500
Gate units 5
Utilities LS 1
IV. Related Facilities 500,000
Access Road LS 1
Pilotage LS 1
Electric and Water Supply LS 1
V. Total 34,340,000

B-3
 Table B.4
Multipurpose Wharf for Conventional Use (-10 m Deep)
Facilities Unit Dimension US$
I. Infrastructure 7,642,500
Berth Length m 170 3,400,000
Depth m 10
2
Terminal Area Marshalling Yard m 20,000
2
Others m 12,000 1,260,000
2
Shed m 2,000
3
Earth Works Dredging m 300,000
3
Reclamation m 34,000 2,982,500
2
Slope Protection m 5,000
II. Equipment 980,000
Mobile Crane 45t units 2
Forklift 5t units 4
III. Management 525,000
2
Office m 500
Gate Ls
Utilities LS 1
IV. Related Facilities 400,000
Access Road LS 1
Pilotage LS 1
Electric & Water Supply LS 1
V. Total 9,547,500

Table B.5
Conventional Wharf
Facilities Unit Dimension US$
I. Infrastructure 2,469,500
Berth Length m 130 1,950,000
Depth m 7.5
2
Storage Open m 5,000
2
Others m 2,000 290,000
2
Shed m 1,000
3
Earth Works Dredging m
3
Reclamation m
2
Slope Protection m 3,000 229,500
II. Equipment 440,000
Mobile Crane 25t units 2
Forklift 5t units 2
III. Management 416,000
2
Office m 300
Gate LS 1
Utilities LS 1
IV. Related Facilities 500,000
Access Road LS 1
Pilotage LS 1
Electric & Water Supply LS 1
V. Total 3,825,500

B-4
 Table B.6
Small Port (-5 m Deep)

Facilities Unit Dimension US$

I. Infrastructure 1,025,000
Berth Pile-Deck m 80 480,000
2
m 480
Access Way Trestles m 50 270,000
Courseway m 100
2
Storage Open m 2,000 275,000
2
Shed m 500
II. Equipment 0
III. Management 75,000
Office LS 1
Gate LS 1
Utilities LS 1
IV. Related Facilities 100,000
Access Road LS 1
Pilotage LS 1
Electric and Water Supply LS 1
V. Total 1,200,000

Table B.7
Dry Bulk Wharf (12 m Deep)

Facilities Unit Dimension US$

I. Infrastructure 5,750,000
Berth Pier m 300 4,500,000
Depth m 12
Access Way Trestles m 100 750,000
2
Courseway m 300
3
Earth Works Dredging m 100,000 500,000
3
Reclamation m
2
Slope Protection m
II. Equipment 2,000,000
Loading/Unloading Ls 1
III. Management 100,000
Office LS 1
Gate LS 1
Utilities LS 1
IV. Related Facilities 1,000,000
Access Road LS 1
Pilotage LS 1
Electric and Water Supply LS 1
V. Total 8,850,000

B-5
 Table B.8
Liquid Bulk Wharf (-10 m Deep)

Facilities Unit Dimension US$

I. Infrastructure 3,390,000
Berth Platform m 50
Breast Dolphin units 6 1,540,000
Mooring Dolphin units 2
Access Way Trestles m 200 1,350,000
Courseway m 300
3
Earth Works Dredging m 100,000 500,000
3
Reclamation m
2
Slope Protection m
II. Equipment 0
III. Management 100,000
Office LS 1
Gate LS 1
Utilities LS 1
IV. Related Facilities 500,000
Access Road LS 1
Pilotage LS 1
Electric & Water Supply LS 1
V. Total 3,990,000

Required Investment for the Development of Public Port

Based on the required quantity of facilities and estimated costs, the total investment for
the development of public ports is calculated by using productivity. Estimated port
handling productivity by port type is assumed in the following table:

Table B.9
Standard Productivity by Port Type

Planned Capacity for

Berth Size Planned Capacity for Standard
Type Initial Operation (TEU or
(Length/Depth: m) Operation (TEU or Ton/Year)
Ton/Year)
I 350/16 TEU 360,000 144,000
Ton 4,320,000 1,728,000
II 280/12 TEU 240,000 96,000
Ton 2,880,000 1,152,000
III 250/10 TEU 192,000 76,800
Ton 2,304,000 921,600
IV 170/10 Ton 340,000 136,000

V 130/7.5 Ton 130,000 52,000

VI 80/5 Ton 80,000 32,000

VII -/12 Ton 3,000,000 1,200,000

VIII -/10 Ton 1,500,000 600,000

Notes: Planning base year is 2020. 1 TEU = 12 tons.

B-6