Transport sector

An Expert's View about Warehousing and Storage in Vietnam

Last updated: 26 Sep 2011

With Vietnam’s growing integration into the world economy, marking by the accession to WTO in 2007, the country has been in urgent need of investing in its transport infrastructure and services to meet increasing demand.

Sector briefing Transport sector in Vietnam Why Vietnam? Vietnam covers a surface of 128,000 square miles and has an ideal location to penetrate South East Asia, China and beyond. A growing population of 87 million with high literacy rate of 95% is an important gear for country?s economic development. Over the past decade, Vietnam has become one of the fastest- growing economies in Asia with consistent GDP growth of around 8% in recent years (6.78% in 2010). With Vietnam?s growing integration into the world economy, marking by the accession to See the UKTI website for general information WTO in 2007, the country has been in urgent about Vietnam. The ?Doing business? guide need of investing in its transport infrastructure includes an overview of the economy, business and services to meet increasing demand. culture, potential opportunities and other relevant issues. Being aware of the fact, the Vietnamese Government has made transport infrastructure a priority area. During the 2001-2008 periods, investment capital for transport infrastructure in Vietnam was approximately US$7 billion. It is estimated up to US$120 billion by the year 2020. UK Trade & Investment Sector briefing: Transport opportunities in Vietnam This is one of the biggest projects in Vietnam?s The Vietnam transport sector offers vast expressway construction sector. The US$1 opportunities for international businesses. billion valued project has been approved by the Government in the Expressway Development Strategy until the year 2020 and vision after Aviation the year 2030. Ha Long-Mong Cai Expressway project is a part of Greater Mekong Sub-region Aviation is one of the top priority sectors for (GMS) to improve infrastructure for five the Vietnamese Government who has an countries (Laos, Cambodia, Thailand, Myanmar ambitious development plan. US$20.5 billion and Vietnam) as well as two provinces of China has been earmarked for investment to meet (Guangxi and Yunnan). The project targets to surging demands for air transport by the year connect Halong, a famous tourist destination to 2030. Of this, approximate 40% will be spent Mong Cai, the border region between Vietnam on infrastructure. and China. This ADB partly-funded project is developed by Vietnam Expressway Corporation According to the development plan, there are 3 (VEC) and expected to be carried out between key international airport projects to be the years 2012-2016. developed, i.e. Long Thanh International Airport, Phu Quoc International Airport in the Ben Luc ? Long Thanh expressway Project South and Quang Ninh International Airport in Ben Luc ? Long Thanh expressway will run the North. Investment capital for these is from the west to east in the South of Vietnam. around US$11 billion. These offer great This is almost the new alignment from existing opportunities for British companies to bring in roads, passing through Nha Be, Ho Chi Minh their expertise and capabilities. City to Dong Nai province. The project has been identified as Class A highway, with design Long Thanh International Airport (LTIA) speed of 120km/h, four-lanes-width and two This is a newly-developed international airport emergency stopping lanes (for 1st phase). that will replace the current Tan Son Nhat Total length of the expressway is about 58 km airport to serve Hochiminh city?s growing travel and construction bidding will start in 2012. requirements. LTIA will be built in the area of 5,000ha in Long Thanh, Dong Nai province, approximately 40m northeast of Ho Chi Minh Railway city. The project is expected to start construction between 2015-2018 and divided With the network of 2,700 km, the railway into two phases: phase one to be completed by system is the least developed mode of 2020 and phase two by 2035. When fully transport as it accounted for just 5% of the completed, the airport will have four runways, passenger transport and 4% of goods five terminals and concourses with a maximum transportation in 2008. To increase railway capacity of up to 80 to 100 million passengers transport capacity, Vietnam has set several a year. The cargo terminal will be able to development objectives until 2030 with handle up to 5 million metric tonnes of cargo proposal of several important railway projects per annum. The total cost of construction is such as upgrading the current North-South estimated around US $6 billion, making it one railway, building up new railway lines and new of the world's most expensive single projects, North-South express train system. which will be invested from the government's investment budget, private and foreign funds. North-South Express Train System This system connects the North and the South with the speed of 350km/h. Total investment Expressways capital required for this ambitious plan is estimated of around US$55.85 billion. The By the year 2020 Vietnam plans to develop an development of this project was rejected once expressway network of 22 routes with total by the National Assembly who asked for more length of 5,873 km. Capital needed for these in-depth feasibility study on the project. But it projects was estimated approximately US$40.3 is still on the top development agenda of billion. However, according to a number of Ministry of Transport. foreign experts, the real capital needed would be 50% higher than this figure. Some critical Hanoi?Lao Cai New Railway Line expressways include: New Railway Project connects Hanoi and Lao Cai province with total length of 280 km. This Halong-Mongcai Expressway new double track project is proposed following UK Trade & Investment Sector briefing: Transport opportunities in Vietnam the transport demand and the agreement on the two corridor one belt railway system Ports between China and Vietnam. Presently new double track project is under proceeding from Port Development Strategy by 2020-2030 said Kunming to Lao Cai. The Project costs US$ 5.7 Vietnam targets to develop six regional port billion approximately. groups with a list of 39 ports to be constructed/ expanded. Total investment needed by 2020 for these ambitious targets Urban development ranges from US$18.9 billion to US$23.1 billion. Biggest projects are Van Phong-Khanh Hoa Thu Thiem Project in Ho Chi Minh city International Transhipment Port, Hai Phong This is an ambitious plan to move the financial International Gateway Port, Cai Lan Port and and commercial district to the Thu Thiem Cai Mep-Thi Vai Port. peninsula (across the Saigon River) which covers an area of 657 hectares. The plans also Van Phong-Khanh Hoa International include residential housing for 40,000 people Transhipment Port and an outdoor stadium. The investment Vietnamese Government is seeking for foreign required for this project is estimated to be investors to participate in the financing and around US $200 billion. The Master Plan for development of a major transhipment port in Thu Thiem was approved in 2005 but so far Van Phong Bay. This locates in south east only two projects have been licensed ? Vietnam in the province of Khanh Hoa. The Vietnam-Japan Knowledge Park and Thu Thiem new International Transhipment Port of Van Software Park. The Thu Thiem project has Phong will have 36 to 42 berths and capacity to stalled over the past few years and we believe handle vessels of 9,000-12,000TEUs. that British companies have an opportunity to play a role in the development of this project. Hai Phong International Gateway Port Also called as Lach Huyen Gateway Port-Hai Urban railway Phong, it is planned to serve as an So far there has been no urban railway international gateway port network in Vietnam. To meet the increasing and a commercial focal point to meet urbanization rate, Government urges big cities, import/export demands by large oceangoing Hanoi and Hochiminh city, to quickly develop vessels, and to serve the socio-economic the urban railway networks as the key public development of the Northern provinces. A new transport. The construction of two lines (one in container terminal is planned to develop at the each city) will be started soon with overseas commercial port zone located in the south bank funding. Two more lines are being studied for of Lach Huyen channel. The port development development and called for investment. One of work consists of the 2 berths, 600 meters in these is Metro Line 3 project in Hochiminh city. length and 14 meters in the maximum depth and dredging works of approach channel (Lach Metro Line 3 in Hochiminh city Huyen Channel) and breakwater and sand Line 3 is divided to 2 separated projects ?3A dyke. Project?s value is US$ 450 million (2010- and 3B. Metro Line 3A (Ben Thanh - Tan Kien) 2015). has total investment capital is ?1.3 billion with length of 16.2 km in an area of 25 ha. Project PPP (Public Private Partnerships) is separated into 2 stages: Stage 1 will be Apart from traditional funding method such as carried out during the years 2012-2017. There Government?s fund, Overseas Development will be 10 underground stations with total Assistance (ODA), PPP has been recently seen length of 9.7 km. Stage 2 will start after 2015 as a real instrument for Vietnam to improve its with total length of 6.5km. weak infrastructure, and interest to UK?s Metro Line 3B (Cong Hoa Roundabout ? Hiep expertise in PPP is high. Regulations on Pilot Binh Chanh). This US$1.2 billion valued project PPP Investment has been approved by the will be constructed during the years 2012- Prime Minister and came into effect from 15 2017. There will be 10 stations (8 underground Jan 2011. The Regulations will be implemented and 2 elevated) with total length of 12.1 km for a pilot period from 3 to 5 years until (9.1km go underground and 3km go elevated). replaced by the Government?s official Total land size for this project is 25 ha. legislation on PPP. According to the PPP The Management Authority for Urban Railways Regulations, the investor?s equity capital must of HCMC (MAUR) is calling for investment for account for at least 30% of the privately- this project (under the forms of ODA, BOT or owned investment in the project. Pilot PPP PPP). projects will cover infrastructure, especially UK Trade & Investment Sector briefing: Transport opportunities in Vietnam transport infrastructure such as expressway, UKTI contacts railway, urban transport, airport, seaport? There will be 2-3 projects in each of the Mrs Le Nguyen Lan Anh priority sectors of transport, water and Trade & Investment Officer electricity, i.e. potentially up to 10 projects all UKTI, British Embassy Hanoi together. It is regulated that the total value of 4 Floor, Central Building, 31 Hai Ba Trung the Government/State contribution in PPP Street, Hanoi, Vietnam projects will not exceed 30% of the total Tel: (84) (4) 39360521 project investment. Ministry of Planning and Fax: (84) (4) 39360561 Investment will take the lead in consulting the E-mail address: Le.Anh@fco.gov.uk relevant ministries, agencies and provincial People?s Committees for project proposal Ms Le Hanh Le assessment. Selection of consultants to Trade & Investment Officer facilitate formulation of feasibility report and UKTI, British Consulate General Hochiminh city project investors will be done through open 25 Le Duan Str., District 1, Ho Chi Minh City, local and international tendering. Vietnam Tel: (84) (8) 3825 1380 ext. 2222 Fax: (84) (8) 3822 1971 If you have any questions about opportunities E-mail address: le.le@fco.gov.uk in the local market, get in touch with the contacts listed at the end of this report. Business opportunities aimed at UK companies are added daily to the UKTI website. These leads are sourced by our staff overseas in British Embassies, High Commissions and Consulates, across all sectors and in over 100 markets. You can search for opportunities by sector or country, or register to receive business opportunity alerts on a regular basis. Major events and activities Viet Transport Contact: Mr David Lim Email: david.lim@iirx.com.sg Time: November 2011 Marine Vietnam Contact: IIR Exhibition Pte Ltd and VINEXAD Email: vinexad@hn.vnn.vn Time: March 2012 For details of events related to this country or sector, use the events search on the UKTI website or register to receive regular updates. New export events are added daily. UKTI?s Tradeshow Access Programme (TAP) provides grant support for eligible Small & Medium Sized Enterprises (SMEs) to attend trade shows overseas. UK Trade & Investment Sector briefing: Transport opportunities in Vietnam Next steps - how UKTI can help British companies wishing to develop their business in the local market are advised to undertake as much market research and planning as possible in the UK. UKTI?s local team, with its wide local knowledge and experience, can provide a range of services to British-based companies wishing to grow their business in global markets. This can include: ? Provision of market information ? Validated lists of agents/distributors ? Key market players or potential customers in the local market ? Establishment of interest of such contacts in working with you ? Arranging appointments ? Organise seminars or other events for you to meet contacts and promote your company in the local market This work is available via our Overseas Market Introduction Service (OMIS) a chargeable service which assists British-based companies wishing to enter or expand their business in overseas markets. To find out more about commissioning this work, or accessing other UKTI services and specialist advice, please visit the UKTI website to find contact details for your local UKTI office. Whereas every effort has been made to ensure that the information given in this document is accurate, neither UK Trade & Investment nor its parent Departments (the Department for Business, Innovation & Skills, and the Foreign & Commonwealth Office), accept liability for any errors, omissions or misleading statements, and no warranty is given or responsibility accepted as to the standing of any individual, firm, company or other organisation mentioned. Published 2011 by UK Trade & Investment. Crown Copyright © You may reuse this information (not including logos, images and case studies) free of charge in any format or medium, under the terms of the Open Government Licence. To view this licence, visit www.nationalarchives.gov.uk/doc/open-government-licence/ or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: psi@nationalarchives.gsi.gov.uk This publication is also available from our website at www.ukti.gov.uk or for more information please telephone +44 (0)20 7215 8000. UK Trade & Investment Sector briefing: Transport opportunities in Vietnam
Posted: 26 September 2011, last updated 26 September 2011

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