VIETNAM's Ministry of Transport is seeking private investment in its ports as it moves to reduce its involvement in free market activities, reports the Saigon Times.
The Vietnam Maritime Administration will open 41 marine infrastructure projects to private investors, including 19 seaports, which are together expected to need US$1.98 billion in private funding, said the report.
Transport Minister Dinh La Thang said the Lach Huyen deepwater port, located in the north and due to be completed in 2016, will be the last port development funded by the state.
Vietnam's troubled port sector has been plagued with failed IPOs because of conditions imposed by the state has resulted in severe terminal overcapacity at Cai Mep's deepwater terminals.
Cai Mep was opened in 2009 and added 4.5 million TEU capacity in less than four years, which was a massive overestimation of demand as utilisation only reached 30 per cent.
Global port operators such as APM Terminals, PSA International, SSA Marine and Hutchison Port Holdings have been frustrated by the lack of cargo, says London's Loadstar.
The World Bank claimed the government's port investment strategy is centred on "quantity over quality".
Given the Cai Mep debacle and failure of recent IPOs, are investors ready to support another Vietnamese port privatisation push, asked Loadstar.
Yes, says Oliver Massmann, general director and partner at Duane Morris Vietnam LLC, and author of the report on Vietnam's new master plan for seaport system development.
"We strongly believe that the government of Vietnam has acknowledged its shortcomings. Evidence is that they have listened and decided to shift focus to development of major ports only," said Mr Massmann.
New laws are now in place that are considered the most liberal and investor-friendly in the region, such as the new Enterprise Law, Investment Law and a decree on Public Private Partnership.
"As a person who has experienced the ups and downs of Vietnam's economy for the last 20 years, I have a strong belief that the economy will witness a stable, not booming, development of port and logistics sectors in the next few years," said Mr Massmann.
WORLD SHIPPING
19 March 2015 - 10:18
Vietnam learns its lesson, distances state from private sector port action
VIETNAM's Ministry of Transport is seeking private investment in its ports as it moves to reduce its involvement in free market activities, reports the Saigon Times.
WORLD SHIPPING
19 March 2015 - 10:18
Vietnam learns its lesson, distances state from private sector port action
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