Investment needed in livestock breeding
 
Over 60 per cent of Ha Noi's livestocks reared by small-scale households are causing environmental pollution and difficulties in epidemic control. However, lack of funds is preventing farmers from raising the scale of production.

Nguyen Van Minh, deputy head of the Animal Husbandry Unit under the Agriculture and Rural Development Department, said most of the 1.5 million cattle and 18 million hens were bred in households with an area of less than 10,000sq m, many located in residential areas.

These small-scale production systems had inferior production practices and did not adopt bio-security measures to protect the environment and mitigate the risks of animal disease outbreaks.

The city's People's Committee has offered financial assistance to households to remove their farms from residential areas, to hire land for animal production and apply waste treatment systems and new breeding techniques.

However, the conditions require their farms to be 500m from schools, hospital, residential areas and industrial areas; having an area of more than 1,000sq m; housing 100 commercial pigs, 2,000 chickens or 10 cows and buffaloes.

Hoang Van Tham, an official of Chuong My District's People's Committee, said most farmers failed to meet these conditions so the district had set up a 15-ha collective farm for farmers to lease to raise poultry and cattle.

However, no road, electricity and waste treatment system had reached this farm yet as the district was waiting for funds from the City, Tham said.

Collective breeding farms costing VND110-120 billion (US$5.2-5.7 million) in other districts had suffered the same fate, such as in Thanh Oai, Ung Hoa or Hoai Duc.

Minh said the city planned to give partial support to districts to set up basic infrastructure systems of collective farms, including roads, electricity and water appliances and waste treatment systems.

The districts should also check farmers wanting a place in such farms.

However, Deputy Chairman of the city's People's Committee Tran Xuan Viet said the city planned to reduce the number of small-scale breeding households to 40 per cent by 2015 so the city would give more financial support for farmers to raise their production scale.

Rice-shrimp farming model proves successful in Ca Mau

More than 2,500 families in the southernmost province of Ca Mau are benefiting from a new rice-shrimp farming model, according to the province's Department of Agriculture and Rural Development.

The department said that more than 4,600 ha of land used to grow rice and raise shrimp have yielded a bumper crop this year, with 4.5 tonnes of rice per hectare and 500 kg of shrimp per hectare.

On average, each household earned a profit of at least VND100 million (US$4,784).

An additional 6,000ha of rice-shrimp farming land is expected to be harvested soon, resulting in a doubling of agricultural productivity compared to the corresponding period last year.

Local agricultural experts have been conducting research on how to best combine rice cultivation and shrimp breeding on the same land.

According to experts, farmers can raise shrimp on their rice fields during rice cultivation if the water in the fields is either brackish or freshwater.

Land used to grow rice is less polluted, and thus good for raising shrimp. In addition, shrimp raised on the rice fields are less likely to catch diseases.

Because of the doubling of profits for farmers via the rice-shrimp model, the local authorities have decided to expand the project from 12,000ha to 20,000ha by 2015.

Nguyen Quoc Viet of the Ca Mau Province's Department of Science and Technology said that, of the 270,000ha of land available in the province to raise shrimp, not all of it could be used for that purpose.

Only 40,000ha of that total figure has fresh or brackish waters, which is needed to raise shrimp. Salty-water areas cannot be used.

For this reason, farmers should talk to local experts and the authorities before they begin breeding shrimp, Viet said

Dragonfruit proves lucrative

A pilot project to grow red-flesh dragonfruit, a sweeter version of the white-fleshed fruit, has yielded big profits for farmers in the central province of Ninh Thuan.

Since planting the fruit trees in April 2010, farmer Tran Cam has total sales of more than VND20 million (US$950) and a profit of VND10 million from two harvests from his 1,000 sq.m, 500-tree dragonfruit orchard.

Cam and five other farming households in Ninh Hai District were chosen to participate in the pilot project, which comprised a total of 5,000sq.m.

The red-flesh dragonfruit suits the area's hot climate and dry, pebbly soil, according to Tran Huu Nhan, head of the district's Agriculture and Rural Development Bureau.

The bureau, which implemented the pilot project, provided 60 per cent of investment capital to the farmers, and taught them cultivation techniques.

In addition, the district bought 1,500 dragonfruit stem cuttings from neighbouring Binh Thuan Province to provide to participating farmers.

Ha Thi Hoa said she and many farmers were worried that they would not have enough money to create support poles for the dragonfruit plants, and were concerned about the yield in their less-than-nutritious soil.

But their anxiety proved to be unfounded.

"Profits from red-flesh dragon fruit have been higher than that from other plants or trees," she said. "Because it is a new fruit on the market, traders come to my orchard to buy it at a high price."

Although the price sold at orchards is VND15,000-20,000 a kilo, the initial investment to plant 800-1,000 dragonfruit trees is nearly VND100 million, according to Hoa.

Early this month, participants at a meeting with the bureau said the project should be expanded because it could provide a stable income for local farmers.

When mature (two years after planting), the red-flesh dragonfruit plant yields seven to eight harvests a year for up to 20 years.

Nation lags behind in theme parks
 
Viet Nam had many advantages to develop entertainment real estate but the country hadn't done enough to promote this potential, Viet Nam National Administration of Tourism official Pham Trung Luong said at a recent conference in HCM City.

A population of nearly 90 million together with long coast lines, diversified culture and beauty were major advantages, he said.

Well-known entertainment complexes having been built in the country include Dam Sen and Suoi Tien in HCM City, Thuy Cung in Nha Trang, Dai Nam in Binh Duong and Thien Duong Bao Son in Ha Noi.

Property experts said these complexes had initially succeeded in combining landscapes, traditional values and some modern entertainment technologies to meet visitors' demand.

But they said the parks still proved unattractive as they were trying to provide multiple services without targeting specific visitors.

"The majority of entertainment complexes in Viet Nam fail to show their own character; they lack authentic local products and many service models are copied from other places," Luong said.

Experts said that although tourism projects had been strongly developed over the last few years, few projects provided entertainment services.

According to the Ministry of Planning and Investment, during 1998-2008, the country lured 431 foreign direct investment projects involved in tourism with a total capital of US$18.6 billion, but most of them concentrated on hotel and resort development.

The fact was attributed to a lack of specific policies for entertainment property development, and the Government had assigned the ministry to study such policies.

Luong said current entertainment parks were located mainly in northern and southern areas of the country, while the central region with great potential — especially nice beaches — was being ignored.

In order to promote this region's potential, more skilled human resources and adequate infrastructure were needed, he said, noting that only Da Nang and Cam Ranh international airports weren't enough to meet demand here.

Luong said the Administration of Tourism had worked out a plan for over 40 potential tourism complexes nation-wide, which would receive preferential policies for attracting investment and developing infrastructure.

US-based Goddard Group chairman Gary Goddard told local press that Viet Nam could build entertainment parks for specific subjects such as history, education, science, ecology, ocean or agriculture. He said his company intended to visit several localities in Viet Nam to survey the potential.

Outlook still gloomy for property market

The Ministry of Construction said that difficulties in the domestic economy would have a negative impact on the production and business of construction enterprises and property traders.

Many construction and property trading companies had already gone bankrupt because people simply aren't buying houses, so the real estate market had little chance of recovery before the end of this year, said economist Bui Kien Thanh.

The Government had plans to pump capital into some property projects and housing for low-income earners, Thanh said, but that was unlikely to affect the market as a whole.

The market would only really recover when people had money again to buy houses, he said.

To solve this stagnancy, property companies needed to switch from luxury high-end apartments, and concentrate on affordable housing, Thanh said.

If the companies could start selling properties, then banks may consider providing loans for future projects, he said.

Savills Viet Nam, a property consulting firm, said according to its survey on Ha Noi's real estate market in the second quarter released on Tuesday, one in five people asked said they were still interested in purchasing a property.

Most investors said they had no plans to lend capital for property development, according to the survey.

Savills Viet Nam expected property prices to continue to fall, especially villas and houses.

The Ministry of Construction reported that in the first half of the year, the real estate market had fallen.

Banks had reduced interest rates and increased credit for the real estate sector and those involved in the sector had taken note, the ministry said.

But this had failed to stimulate the market, and most buyers were waiting for prices to fall even further, it said.

The situation has had a knock on effect on building material producers and construction firms.

Foreign acquisitions raise fears of hostile takeovers

Several foreign investment funds have recently announced intentions to become major shareholders of some listed companies, raising fears that these funds were positioning themselves to carry out hostile takeovers during the market downturn and resulting period of depressed share prices.

Refrigeration Electrical Engineering Corp (REE) earlier this month reported that Singapore-based Platinum Victory Ptl Ltd had became its largest shareholder, accumulating a 10.2-per-cent interest in the company.

In the second quarter, Chile's CFR International Spa bought a 46-per-cent stake in healthcare equipment company Domesco Medical Import-Export Co (DMC).

Thailand's Nawaplastic Industries (Saraburi) Co also announced in March plans to become a major stakeholder in Binh Minh Plastics (BMP) and Tien Phong Plastics (NTP). Analysts of Bao Viet Securities Co said the Thai company, which holds about 50 per cent of the PVC pipe market in Thailand, wanted to stake out Viet Nam's market through acquisition of major stakes in these two leading Vietnamese plastics companies.

Analysts worried that a hostile takeover was likely since most of MBP's and NTP's shareholders were organisations and investment funds that would likely sell their shares if the price were right.

However, most of the recent large deals were aimed at financial investment purposes or at forging strategic partnerships within the same industry and were unlikely to result in takeovers, said the director of Viet Capital Securities Co's financial consulting division, Dinh Quang Hoan.

Current law still only allowed foreign investors to buy up to 49 per cent of the total shares of a listed company, with the remaining 51-per-cent seen as a shield to protect domestic investors, Hoan said

Nevertheless, other M&A experts have said that in such key sectors as pharmaceuticals and foodstuffs, foreign investors can get around the 49-per-cent barrier by encouraging their "backyard" domestic investors to increase their stakes.

After spending more than US$60 million to acquire a 10-per-cent stake in software giant FPT last year, Singapore-based Orchid Fund increased its holdings to over 11 per cent this month through the purchase of another 2.7 million shares.

As one of the top 10 leading shares by market capitalisation on the HCM City Stock Exchange, FPT shares often sought by foreign investors. In addition to the Orchid Fund, US-based Red River Holdings now holds a 5.5-per-cent interest in FPT and has been trying to increase its holdings since early this year.

Both funds are also major stakeholders in other major listed companies. Orchid Fund owns a 3.9-per-cent stake in food processor Masan Group (MSN), while Red River Holdings currently maintains a 3.6-per-cent interest in steelmaker Hoa Phat Group (HPG) as well as 10-per-cent stakes in real estate and food and beverage companies.

Exporters may fall short of targets
 
Exporters are expected to earn an average of roughly US$9.4 billion monthly in the second half of the year to be able to meet the annual target of $109.5 billion. However, it would not be easy as export growth rates to several markets recently slowed down, according to the Ministry of Industry and Trade.

The ministry said that it could be difficult for prices of agricultural and aquatic products to increase in H2. Nevertheless, it expected that the products will earn $10.7 billion from exports thanks to exporters' efforts to promote markets and the Government's credit supports, bringing the total annual export turnover to $21.1 billion.

For the group of raw materials and minerals, the ministry forecast the group to fetch roughly $6 billion in H2, bringing the total annual turnover to $11.6 billion.

The annual export value of processing products could reach $68 billion as the turnover in H2 is expected to be $34.8 billion.

To meet the target, the ministry has instructed relevant authorities to keep a close eye on export markets to have an accurate forecast. Viet Nam's trade counsellors in foreign countries, especially key export markets, are also required to timely report changes to the ministry related to changes in policies to help local exporters adapt.

The ministry will also work closely with the Ministry of Finance to effectively implement the Government's credit support policies to help exporters access credit sources, promote credit guarantee for small- and medium-sized enterprises, adjust flexible import and export taxes, and further facilitate customs procedures.

To boost seafood exports, general secretary of the Viet Nam Association of Seafood Exporters and Producers (VASEP) Truong Dinh Hoe said that trade barriers in major importing markets were big challenges facing the local fishery enterprises.

VASEP asked relevant authorities to take measures to rebound seafood exports to Japan. Seafood exports to Japan decreased sharply in the first six months of the year due to Japanese strict regulations. The contamination index in shrimp imposed by Japan is much lower than the current rules of the World Trade Organisation. For example, Europe and the US regulate the impurity content of 150 parts per billion (ppb) and 75 ppb, respectively, while the figure of Japan is only 10 ppb.

Hoe also recommended relevant agencies regulate certain criteria for local seafood exporters and reduce the number of the exporters from the more than 100 as of now to 60-70 in a move to increase quality.

Chairman of the Viet Nam Leather and Footwear Association Nguyen Duc Thuan proposed that the Government should create favourable conditions to improve the competitiveness of export sectors.

Thuan said under the current Import and Export Tax Law, enterprises, which import supplies and raw materials for production of exported goods, would receive a 275-day grace period of duty payment for their imports. However, the draft of the revised Import and Export Tax Law eliminates the tax payment deferment and requires the enterprises to pay the tax before importing.

"This reduces the competition for exporters, particularly in the context of difficulties in the world market," Thuan said.

Online banking now more popular

Although 77 per cent of Vietnamese still physically visit banks to make transactions, 64 per cent also make on-line banking transactions.

According to a recent Nielsen survey, consumers look for "safe" high-interest returns in dong, particularly at State-owned banks.

Forty-one per cent of respondents to the survey now use State-owned banks, a five-point increase from the last quarter of last year.

However, the use of saving services at joint-stock banks fell from 64 per cent from the last quarter of 2011 to 58 per cent in the first quarter of this year.

According to a Personal Finance Monitor Survey held in the first half of this year, the intent to invest in real estate and securities in the next 12 months dropped to 6 per cent in the first quarter of this year, four times lower than a year ago.

More than a third of respondents (36 per cent) wanted to invest money in their own business, compared to 63 per cent a year ago.

Gold, silver and other precious metals topped investment choices for more than half (54 per cent) of consumers surveyed, followed by stock (52 per cent), foreign currency (41 per cent) and secured investments (30 per cent).

The survey's report was conducted face-to-face among 600 respondents from 18 to 50 years old on a monthly basis in HCM City and Ha Noi.

According to a global survey by the same company, most Vietnamese consumers (88 per cent) make decisions on personal finance or wealth matters without the help of a financial planner.

Up to 24 per cent said they relied on tips from friends, relatives and colleagues.

The survey also found that 40 per cent of Vietnamese on-line respondents use credit cards as well as cash for dining, shopping and entertainment activities, while 97 per cent use cash only.

When it comes to credit card repayment, 24 per cent of card users repay only the minimum required each month.

The global survey, which contacted 7,000 consumers in Asia and the Pacific on-line, found that while 85 per cent used cash for general shopping, dining, travel or entertainment expenses.

Works starts soon on North-South railway

The 370km HCM City-Nha Trang high-speed railway will be the first section of the north-South Railway built to link up with Long Thanh International Airport in southern Dong Nai Province. Work is expected to start this year.

This would create better conditions for passengers and goods transportation, said Deputy Chairman of the provincial People's Committee, Tran Van Vinh, at a conference on the development of the north-south railway held today.

Long Thanh International Airport will replace Tan Son Nhat International Airport in HCM City. It will cost about US$10 billion.

The railway section from HCM City to Nha Trang will carry trains at a speed of up to 300km per hour.

The route will pass many major urban areas, including HCM City, Phan Thiet and Thap Cham. Six stations will mark the route.

The airport is planned to come operational by 2020.

VN Airlines has more summer flights

High summer demand has pushed Viet Nam Airlines (VNA) to add 20 extra flights a day on 16 domestic routes within a month.

VNA reported the extra flights will be available until early next month.

There will now be up to 68 flights a day to Da Nang and 28 to Nha Trang. About 20 planes a day will depart for the tourist island of Phu Quoc – and 16 flights from and to Da Lat.

VNA said that the flights from Ha Noi to Da Nang amounted to a 30 per cent increase compared to the same period last year. Similar increases are reported to the other destinations.

Listed firms pay big dividends in Q1

Nearly 70 per cent of listed companies suffered losses in the first quarter of this year, yet listed companies as a whole have managed to pay dividends in the first half of the year totalling a combined VND23 trillion (over US$1 billion), according to a report in the publication Dau tu Chung khoan (Securities Investment).

This number is even higher than the total value of shares offered for public sale in the first six months, which was just nearly VND5.47 trillion ($260.5 million), the report stated.

A number of firms have even paid dividends up to three times on profits posted in fiscal 2011, amounting to up to 40-50 per cent of their charter capital. These companies included Tay Ninh Rubber Co (TRC), healthcare equipment maker MEINFA Co (MEF), gas trading company CNG Viet Nam Co (CNG) and Yen Bai Forest Agricultural and Foodstuffs Co (CAP).

Commercial banks were also among the most generous in paying dividends. Vietcombank (VCB) paid a rate of 12 per cent, worth over VND2.78 trillion ($132.4 million); Eximbank (EIB) spent over VND2.38 trillion ($113.5 million) to fund a 19.3-per-cent rate; and Asia Commercial Bank (ACB) paid 20 per cent, worth over VND1.87 trillion ($89.3 million).

Many blue chips, such as PetroVietnam Gas (GAS), dairy producer Vinamilk (VNM), Phu My Fertiliser (DPM) and insurer Bao Viet Holdings (BVH), also paid healthy dividends totalling VND800 billion ($38 million) to over VND2 trillion ($95 million).

At the other end of spectrum, real estate, coffee and seafood firms were experiencing hard times, and those that managed any dividends at all paid them in shares and not in cash. Others delayed planned payments, with up to 20 companies postponing their dividend payouts due to the lack of funds on hand.

According to analysts, efforts by listed companies to pay dividends in this difficult economic climate should be hailed as it helps improve investor confidence in the stock market. However, companies are advised not to try to raise money to pay cash dividends on the other as it puts them at risk of default.

Big push for electronic bidding

Viet Nam plans to strongly develop and expand its e-bidding system from now to 2015, building on lessons learnt during a three-year trial period.

The Ministry of Planning and Investment is currently implementing a real e-bidding project, not on trial basis as was done earlier, said Le Van Tang, head of the ministry's Bidding Management Department.

The new project would facilitate expansion of the system in the country, adding new functions like e-shopping, e-contracting and e-payments, he said.

The department would upgrade technological infrastructure to support and improve the e-bidding system, and a strong domestic technology company would be chosen to manage and support the project.

"We will boost announcements of bidding information to contractors. Initially, we will tender projects of small value, which we think will be more effective. High value projects cannot be bid for on the Internet at this time" said Pham Thy Hung, another senior official from the department.

Several officials said at a conference recently that e-bidding was an inevitable trend with many advantages, especially in limiting illegal bidding cases.

They said it has been applied in many countries in the world, helping the Government and concerned companies save money and time. In Viet Nam, however, not many companies were ready to use it, they added.

The lack of adequate technology infrastructure and an imperfect legal framework are cited as the main reasons.

"Low Internet speed and capacity is a worry for contractors. We are still nervous using e-bidding. The nervousness goes only after our bid has been successful" said Ngo Dinh Luyen, managing director of the ADT Application and Development Electronic Technology Co.

The company's marketing executive, Ha Thi Thuy Hai, confirmed that they had successfully deployed e-bidding for four to five projects, but these did not involve big sums of money.

She said the process was much faster and easier to use than normal bidding, but suspected that transparency it required might evoke resistance to apply it on the part of big players.

Nguyen Hong Anh, head of the Bidding Section of Vinaphone, said e-bidding was new in Viet Nam and contractors felt like a fish out of water at first. But this would improve over time, he felt.

The trial e-bidding programme began in 2009 at http://muasamcong.mpi.gov.vn with support from the South Korean Government.

After three years of trial, about 1,700 tenders and 600 contractors have used the system. More than 30,000 bidding announcements have been published on the website, and 200 bids successfully executed.

The Planning and Investment Ministry has estimated that the Government can save billions of dollars if e-bidding becomes the norm in Viet Nam.

GE signs local-equipment supply contracts

US energy giant General Electric (GE) signed contracts with Vietnamese partners on Tuesday to supply electrical equipment to the local industry.

One of the contracts signed was worth US$16.5 million with the Power Transmission Company No 4, a subsidiary of the National Power Transmission Corporation (NPT), to double Viet Nam's existing power capacity by upgrading the national grid.

GE's six series capacitor banks will be installed as part of the upgrade of the 500kV Pleiku – Phu Lam transmission line to increase power capacity from 1,000 amps to 2,000 amps.

US Secretary of State Hillary Clinton witnessed the signing of the contract in Ha Noi.

"The 500kV Pleiku-Phu Lam transmission line, which is 500-km in length, is the backbone of Viet Nam's North-to-South power transmission. Increasing the capacity of the line to transmit power across the country more efficiently will enable Electricity of Viet Nam (EVN) to mobilise generation sources to more effectively meet power demand, which varies from region to region," said Dang Phan Tuong, chairman of the NPT Board of Management.

"When it comes into operation in 2013, the project is expected to supply approximately 800MW to the southern region," Tuong said.

"We are delighted with this opportunity to assist Viet Nam meet its power needs. A healthy power infrastructure is vital to supporting economic growth," GE Energy Asia Pacific President Kenji Uenishi said.

The US Export-Import Bank is financing the project. Shipping and installation of the capacitors at the three locations will begin in the second quarter of 2013, with commercial operation set to begin in the third quarter of the year.

GE signed a memorandum of understanding in March 2011 with the NPT for both companies to work together in an effort to increase Viet Nam's power transmission efficiency and expertise, while reducing the risk of power shortages.

GE's capacitor technology is effective in Viet Nam, with the first GE banks installed in the 1990s. This is the second time GE has signed a contract directly with NPT. The first involved a similar capacitor banks installation in the 500-kV Da Nang – Ha Tinh transmission line.

Mobile payments on rise in Mekong region

The latest developments in mobile payments in the increasingly affluent markets of Thailand, Laos, Cambodia, Myanmar, and Viet Nam are being showcased at the two-day Greater Mekong Mobile Payments and Banking Summit, which ends today in HCM City.

"Non-cash commerce in Viet Nam is facing challenges currently, but it will have great opportunity in the future," Than Trong Phuc, managing director of DFJ VinaCapital, predicted confidently.

He listed the disadvantages faced by the market: the benefits are still unclear and/or not compelling, customers do not feel secure, infrastructure is still evolving, directions are fragmented, networks are still in their early stages, and the regulatory system is primitive.

In a recent survey of people buying online in HCM City, Ha Noi, Hai Phong, and Da Nang, 64 per cent said they would not buy anything online in the future and the rest said "maybe."

But of the latter, only 17 per cent said they would pay using ATM, credit, or debit cards, with the rest preferring to pay by cash.

"To improve the situation, changing consumer habit and regulatory support are the most important tasks," Phuc said.

But he did mention the Government's major plan to boost non-cash payment by 2015 by paying salaries to 80 per cent of State workers through banks, accepting non-cash payment at all public utilities, doubling banking penetration to 30–40 per cent, increasing the number of merchants accepting cards from 70,000 to 250,000, and reducing taxes on non-cash transactions.

Through all this it hopes to reduce cash payments to below 11 per cent of the total.

Singapore, Salil Bhuv-anadasan, mobile financial services – Asia of BICS company reported that 2.5 billion people around the world do not use banking services while there are 1.7 billion mobile phone users.

Last year global remittances were worth US$350 billion and the figure would rise to $404 billion next year, he said.

"I assume that around $65 billion will be transferred through mobile phones in 2014 due to the speed, economy, and easy access and tracking," he said.

Viet Nam was the ninth biggest beneficiary of remittances last year with $9 billion.

Participants will discuss how to roll out these services to customers and educate them and how operators and banks need to support this innovation through collaboration.

Commercialising mobile payments, ensuring transaction security, and leveraging mobile messag-ing technology for financial inclusion are also on the agenda.

Travelmob launches Viet Nam site

Travelmob, an online marketplace where property owners in the Asia Pacific region can list spaces for visitors for short-term stays, announced the launch of its Vietnamese site (vn.travelmob.com) on Tuesday.

Founded jointly by Turochas Fuad, ex managing director of Skype Asia Pacific and Prashant Kirtane, formerly head of engineering at Yahoo! India, the company's vision is to enable travellers around the world experience Asia like a local.

Property owners can list as many properties as they like for free on travelmob and a service fee is collected only when an actual booking is made.

"Renting out your spare room or apartment to foreign guests visiting the country is a great way to help boost local tourism and meet new people from all around the world, it said.

HCM City to host VN goods fair

The HCM City Investment and Trade Promotion Centre and the People's Committee of District 2 will organise a fair of Vietnamese high-quality products from July 18 to 22 following the success of similar fairs in Cu Chi, Nha Be, Can Gio, Thu Duc, and Binh Tan Districts.

It will be the 21st fair organised in response to a campaign titled "Vietnamese people give priority to Vietnamese goods."

Together with major players like Coop-Mart supermarket, Vissan, Acecook Viet Nam, small and medium-sized enterprises will also take part in the event.

The exhibition will have 60 booths where more than 40 businesses will display a range of products like garments and textiles, footwear, handicrafts, food, and household and electrical goods.

Bid to raise price of hydropower
 
Small hydro-electric plants propose their generated power be bought at a higher price as one of the measures to save them from losses and to tackle a capital shortage which has long been a headache.

The Viet Nam Chamber of Commerce and Industry yesterday held a forum to discuss the difficulties of small hydroelectric plants and suggested proposals to be made to the Government for better development.

Vice president of Lao Cai Enterprises Association Vu Ngoc Cu pointed out that electricity of small hydroelectric plants was currently sold to the Electricity of Viet Nam (EVN) at VND800-900 (US$0.038) per kWh.

Meanwhile, EVN bought it from China at about VND1,300 ($0.061) per kWh. "The difference in the prices is really unreasonable," Cu said.

Agreeing with Cu, Ha Sy Dinh, deputy director of Son Vu Energy Development, said that due to the low electricity price, the turnover of small plants hardly made up for the input costs, resulting in shortage of capital accumulation for reproduction or new investments.

Difficult access to loans with high interest rates (despite being decreased from more than 20 per cent to 15 per cent recently), were other matters of concern, Dinh added, saying that his company could not find any loans for hydroelectric plants in the past three years.

"Power prices paid to small hydroelectric plants should be increased at least to ensure their survival," stressed president of the Viet Nam Energy Association Tran Viet Ngai.

General secretary of the Viet Nam Electrical Engineering Association Dam Xuan Hiep agreed, stressing that "increasing the electricity price is the only solution to the capital shortage hitting not only small hydroelectric plants but also the whole power sector."

Investors of small hydroelectric plants also called for preferential loans to help them overcome financial difficulties.

According to Ngai, small and medium-sized hydroelectric plants should be allowed to participate in the competitive power generation market, which was launched at the beginning of this July.

Currently, only electric plants with a capacity of more than 30 megawatt can join the competitive power generation market.

Plants generating more than 10 megawatts should be eligible to join, he said.

"Or else, it would be very difficult for small and medium-sized hydroelectric plants to find buyers or they would be forced to sell electricity at a low price."

However, not all small hydroelectric plants' investors agreed. President of Lao Cai Enterprises Association Hoang Minh Tuan said private investors currently did not want to join in the competitive power generation market as the procedures might be complicated, saying that they preferred to be offered a fixed price by EVN.

At the forum, small hydroelectric plants also expressed their concerns over the high water resource use tax.

Under the Decision 284 of the Ministry of Finance which came in force in February, the water resource use tax this year would be based on the electricity price of VND1,304 per kWh. However, the fact was that no plants could sell electricity to EVN at that high price.

Ngai said that enterprises which sell electricity at less than VND1,000 per kWh should be exempted from water resource use tax.

Nguyen Duc Dat from Viet Nam Energy Association said that in the past, small hydroelectric plants did not do well in terms of environmental protection. He emphasised that investors of small hydroelectric plants must now pay more attention to protecting the environment. There should be restrictions on the areas of forest cut down to build a hydroelectric plant.

In 2011, small hydroelectric plants generated about 3 per cent of the country's total electricity output. There are more than 200 small and medium hydroelectricity plants throughout the country.

Inspectors say $73m in State funds misspent

Government inspectors successfully recovered VND1.5 trillion ($73.3 million) of wrongfully-spent State funds in the second quarter of this year, and they have asked relevant authorities to review an additional VND2 trillion ($96.5 million) in questionable expenditures.

The figures were reported at a meeting here yesterday to review inspector activities over the past quarter.

Inspectors during the period also requested the return of 48ha of misused land and further investigation into the use of another 155ha.

During the past quarter, inspectors reported at the meeting, they submitted to the Prime Minister conclusions on their inspections of land planning management and land use; their inspection of troubled State-owned shipping company Vinalines; and audits of Ha Noi National University, infrastructure construction projects in Ninh Binh Province, a Project undertaken by Brigade 16 in Ea Sup in the Central Highlands province of Dak Lak, and various forestry and rubber plantation projects in Dak Lak.

Regarding the inspection of Ha Noi National University's joint venture with foreign universities in offering under graduate and graduate training courses during 2006-10, Nguyen Van San, Deputy Chief of the Government Inspectorate, said a final report would be submited to the Prime Minister by the end of this month.

Nguyen Van Kim, director of the Inspectorate's judicial department, said his department would submit to the Government a revised draft of the Law Against Corruption for cabinet members to consider in their monthly meeting slated for July 21-27.

In the first half of 2012, government inspectors nationwide conducted some 6,000 inspections, of which nearly2,000 missions have produced final reports. They detected VND3 trillion ($145.5 million) in wrongful expenditures and recovered 1,400ha of misused land.

VNPT, Viettel asked to delay price hike that will hurt smaller telcoms

The Ministry of Information and Communications (MIC) has asked the country's two biggest telecom firms VNPT and Viettel to delay implementing new rental tariffs on use of infrastructure by smaller telecom companies.

The ministry told VNPT and Viettel to temporary keep the old tariffs until the end of this month while negotiating with other telecom firms on more appropriate tariff adjustments.

Head of MIC's telecom department Phan Hong Hai said the ministry has already sent a letter to VNPT and Viettel, also asking for an explanation of price hikes for rental of backbone transmission lines - which smaller telecom firms must rent if they want to realistically compete in the market.

The move follows a series of proposals to the ministry from mobile operators such as Vietnamobile and Beeline bemoaning the sizeable hike in backbone transmission rental prices from VNPT and Viettel.

VNPT, which owns Vinaphone and MobiFone, and Viettel, are the sole owners of the country's backbone transmission route, a core network that provides paths for exchange of information between different sub-networks.

According to Trinh Ngoc Lam, chairman of Ha Noi Telecom which is the operator of the fledgling Vietnamobile, VNPT and Viettel had sent a letter to Vietnamobile informing them about a raise of approximately 300 per cent for the core network rental fee.

Lam said the hike will severely impact the operations of Vietnamobile, which is currently struggling to boost its base of about 10 million subscriptions.

Concerning speculation about price fixing between VNPT and Viettel, a VNPT representative said there is no under-the-table agreement between the two firms on the price hike.

Luong Manh Hoang, director of Viet Nam Telecom National (VTN), a subsidiary of VNPT, said the two firms raised the rental price at the same time and his company had to do it to keep the business profitable.

Meanwhile, Viettel said that as it had acquired the bankrupt telco EVN Telecom – one of the country's biggest owners of a core network with 40,000 optical telecom cables, it has to raise the tariff because the previous price set by EVN Telecom was too low.

Vietnamobile last month planned to seek a bailout from the Government to stave off bankruptcy as the operator was struggling to compete in a telecom market dominated by three major players.

Meanwhile, Gtel Mobile on April spent US$45 million to acquire a 49 per cent stake in the Beeline network, a brand currently owned by Russia's second-largest telecom operator VimpelCom.

Even before Beeline announced its withdrawal, others mobile networks were already experiencing major problems.

The S-Fone firm was said to be slowly withdrawing from the market while analysts claimed the company was seeking investment from two foreign partners.

The Vietnamese telecom market, which has 135 million phone subscriptions, is dominated by the three major players of VinaPhone, MobiFone and Viettel, which hold a combined 95 per cent market share, while Beeline, Vietnamobile, and S-Fone share a minuscule 5 per cent.

Ministry speeds up work to stimulate production
 
Helping enterprises clear inventories and maintain production would be a focus of the Ministry of Industry and Trade's action plans in the coming months, said Minister Vu Huy Hoang at a meeting in Ha Noi yesterday.

The ministry was considering the application of bartering among enterprises, in addition to stimulating demand by speeding up disbursement of projects financed by the State budget in such industries as building materials, cement, iron and steel, sanitary ware and electric devices.

It would possibly support the automobile industry with a 10-per-cent cut in registration fees in several major cities.

The ministry said it was asking the Government to assist farmers who bought machinery and small means of transport for agricultural production and produce processing by covering full interest rates for their loans, slashing value-added taxes (VATs) or allowing them to pay for machinery in instalments.

Reforming administrative procedures to boost exports would be an important measure in addition to limiting imports of consumer goods to stimulate domestic manufacturing, Hoang said.

The ‘Buy Vietnamese goods' campaign would be widely promoted, especially in localities inviting bids for State-financed projects.

The ministry would also help companies hold exchanges and develop distribution systems to border economic zones and neighbouring countries, he said.

A representative of the Heavy Industry Department suggested the Ministry of Finance should cut export taxes to zero per cent for articles which the country had been able to manufacture such as mechanical products, and firms should carry out synchronised measures including cutting costs and changing markets.

He noted that recent Government actions had only concentrated on stimulating corporate demand and public investment and purchase but did not encourage consumer demand, urging the ministry to soon reduce the VAT for consumer goods which were amassing high inventories.

Hoang urged the Ministry of Finance to soon supplement money for promoting trade on both domestic and foreign markets, stressing that with this year's finances for trade promotion representing less than half of last year's figure, efficiency wouldn't be up to expectations.

An official from the Import-Export Department said trade promotion financing should now be prioritised for particular goods in the country's major export markets, including the US, the European Union and Japan, which were all showing signs of decline.

Assuring concerns over reserves of farm produce exports, especially rice, he said the coming winter-spring crop would be vital to facilitate export contracts as well as stabilise prices of these products on the domestic market.

He added that local firms should take full advantages of trade agreements between Viet Nam and other nations, noting that export values through free trade areas accounted for 15 per cent of the country's total exports in the first half of the year alone.