World Bank joins $600m delta upgrade talks

The Ministry of Construction and the World Bank yesterday held a meeting to discuss a US$600 million project to upgrade six urban areas in the Cuu Long (Mekong) Delta region.

The project involves upgrading the water supply and sewerage systems in Can Tho, My Tho, Ca Mau, Tra Vinh, Cao Lanh and Rach Gia.

"The programme is part of the national urban area upgrade strategy that runs until 2020", pointed out Do Tu Lan, deputy head of the ministry's Urban Development Department.

The World Bank provides 65 per cent of the project's investment, worth $390 million. The Vietnamese Government covers the remaining 35 per cent.

It is estimated that the project will directly benefit 142,000 people and indirectly boost the living conditions of a further 1.4 million.

In addition, loans worth VND20-30 million ($952-1,428) will be made available to 12,000 households to renovate their homes.

Investment in upgrading roads and sewerage systems will be given priority.

About $112.7 million has been earmarked for projects to improve Can Tho City's irrigation system, clean up Bung Xang Lake, dredge Ngong and Nhieu cannals and renovate a number of roads in Ninh Kieu District.

Loans totalling VND73 billion ($3.4 million) will be made available to 3,000 families to upgrade their houses.

The ministry and World Bank officials plan to meet again in June and September and approve the programme in December. It is expected that the project will be implemented early next year.

The wider national infrastructure upgrade progamme was launched in 2007 in HCM City, northern Nam Dinh Province, Hai Phong and Can Tho. About 2.2 million people in the four localities have so far benefited from the programme.

Dollar loan demand expected to rise: bankers

Vietnamese banks have pushed longer-term dollar deposit rates over 6 percent in the past week, anticipating more demand from firms for dollar loans in coming months at a time of high dong rates, bankers said on Monday.

Small and medium-sized banks have pushed rates on deposits of 12 months or more to around 6 percent from 5 percent, with partly private Navibank leading the race with 6.24 percent, lenders said on their websites.

State-owned lenders and other major banks including BIDV, Agribank and Techcombank were paying less, at between 4.7 percent and 5.05 percent.

Lenders are stepping up efforts to secure liquidity and prepare for credit demand in the early months of the year after the central bank tightened prudential rules, bankers said.

Bankers said lenders would try to boost dollar lending to make up for their shrinking capacity to offer dong loans due to new central bank requirements that allow them to use only about 65 percent of total deposits for lending.

"Businesses' demand for dollar loans may rise after Tet," said a treasury manager at a partly private bank.

Lenders have taken defensive moves over the past month, with several major banks withdrawing long-term dong loans from the interbank market to secure liquidity.

Cash demand traditionally rises before the Lunar New Year, or Tet, the largest festival of the year in Vietnam.

High dong lending rates at between 18 percent and 20 percent have discouraged businesses from borrowing in the past couple of months, bankers said.

Dollar lending rates of around 8 percent have proved more interesting for borrowers, despite foreign exchange risks.

"Firms have shifted to dollar loans, then turned them into dong cash, just like early last year," the manager said.

Dollar loans surged 14.07 percent in the first quarter of last year, versus a rise of 0.57 percent in dong lending,, as businesses rushed to borrow dollars to take advantage of the gap between dollar and dong loan rates.

Dollar cash demand has been stable in the past few weeks. "There have been just a few interbank transactions in which several joint-stock banks borrow from state-owned lenders," a trader at a major Hanoi-based bank said.

Overnight interbank rates have stuck at between 0.43 percent and 0.46 percent in the past 22 days, Reuters data showed.

Vinacomin still aims to sell $500 mln bond
 

Vietnam's Coal and Mineral Industry Group plans to issue international bonds worth US$500 million this year, after delaying the sale last year due to unfavorable conditions, a state-run newspaper said on Monday.

The group will apply for government approval to issue bonds to raise funds for major coal, power and bauxite projects this year, the Vietnam Investment Review said, quoting an unnamed official at the firm.

State-run Vinacomin postponed a plan to raise between $500 million and $700 million last November, with reports citing the problems of debt-laden state shipbuilder Vinashin and market uncertainty as factors.

The newspaper quoted the Vinacomin official as saying the Vinashin case had seriously affected the image of Vietnam in general and state-run groups in particular, and that some investors were demanding unacceptably high yields.

In December Standard & Poor's Ratings Services became the third major rating agency after Fitch and Moody's to downgrade Vietnam, potentially raising the cost of capital for the country and its companies.

Another Vietnamese state-run group, Vietnam Electricity, plans to issue overseas bonds worth $1 billion this year. Oil and gas group Petrovietnam has delayed plans for a bond of a similar size.

Locals to manage Hue‘s forests

The central province of Thua Thien-Hue has decided to expand allocation of forest management to local residents, following the success of a pilot project initiated in 2000.

The provincial People's Committee said it would expand its forest management and protection project from a single village managing 405ha to several communities managing nearly 11,000ha of forest.

In 2000, to prevent residents in Thuy Yen Thuong Village in Phu Loc District's Loc Thuy Commune from illegal logging, the Phu Loc District Forest Protection Bureau in consultation with the provincial People's Committee allocated 404.5ha of natural forest in the village for local villagers to manage and protect.

Under the decision, villagers would protect the area in accordance with the law and have certain rights to forest resources as an income source for a period of 50 years. The allocated area consisted of reasonable quality forest that was about a fifth of the village's total forest area.

Thua Thien – Hue was the first province to initiate such a project.

Before 2000, up to 90 per cent of the villagers had been involved in illegal logging activities. Since the project began, they have managed the forest well and no illegal logging has been reported.

Every day, villagers do security and maintenance patrols and harvest non-wood forest products, honey and fish, allowing them to earn an average income of VND20,000-30,000 a day per person.

Huynh Ngoc To, head of the village's Forest Protection Team and a former illegal logger, said the provincial People's Committee recently decided to allow villagers to harvest nearly 100cu.m of wood as part of their income for doing forest management and protection.

"This not only helps 450 households in the village eliminate poverty in a sustainable way but also changes their awareness of responsibility in forest protection," To said.

From now to 2020, the provincial People's Committee plans to continue allocating 30,000ha of natural forest and forestry land for communities to manage, under Government Decision 178/TTg issued in 2001.

Power plant licenses revoked

Central Phu Yen provincial authorities has recently revoked the licenses of two hydroelectricity power projects in Dong Xuan District.

The province’s People’s Committee has decided to cancel the Phu Mo and Ca Ton in Phu Mo Commune as their investor failed to prove their financial capacity to build plants.

The Phu Mo Hydroelectricity Plant and Ca Ton Hydroelectricity Plant are slated to cost VND240 billion (US$12 million).

Phu Yen power development investment joint stock company, the investors, missed the deadline to present investment report.

Saigon shopping mall set for makeover

With many anchor tenants recently vacating, Kumho Asiana Plaza Saigon shopping mall is likely to renew itself by changing the concept of the retail area.

According to Peter Dinning, general director of Colliers International Vietnam - Kumho Asiana Plaza Saigon’s (KAPS) asset management agency - project developer Kumho Asiana Group is expected to approve the new concept in the next two weeks.

“The new concept will enhance the overall development and provide services that will benefit not only the general public but all the users in the office, service apartment and hotel towers,” said Dinning, declining to reveal the concept’s details.

Opened in late December 2009 on Le Duan Street in District 1, the near 7,000sqm KAPS shopping mall has two full floors of premium shopping located in the three-part Kumho Asiana Plaza complex. The retail podium links together the five-star Intercontinental Hotel, luxury serviced residences and an international Grade A office tower.

Tenants had occupied up to 85 per cent of the shopping mall by the time it was inaugurated with the presence of well-known British department store Debenhams on the ground floor and the US Hard Rock Café in the basement, according to Colliers International Vietnam’s statement released at the project’s grand opening ceremony.

The largest tenant in KAPS, Viet Thai International Joint Stock Company (VTI) – Vietnam’s Debenhams franchisee - has, however, lately decided to move its department store to Vincom Shopping Centre on Le Thanh Ton Street, which is located within a walking distance from KAPS.

Munish Rishi, manager of Debenhams in Vietnam said that VTI planned to re-launch the brand at Vincom before the lunar New Year holidays. “The new venue is expected to bring more value and shopping experiences to consumers of Debenhams in Vietnam as it fits well with Debenhams’s brand code, which offers complete fashion themes within a community and family entertainment atmosphere,” Rishi said, adding that “KAPS’s retail area is not a 100 per cent shopping mall with just two floors, and it is also going to have a new concept, so we decided to move out”.

Traders making a killing on small banknotes

The unofficial market of money exchange is currently enjoying a brisk trade because banks cannot meet the seasonal demand for newly minted small-denomination banknotes for use during Vietnamese Tet holidays, or the Lunar New Year, that falls in early February this year.

During the Tet period, Vietnamese usually put small-denomination notes in red envelopes and present them as lì xì (lucky money) to relatives, especially children, together with all their best wishes.

Despite their claims of adequate supply of small-denomination notes, most of the banks just give them to their loyal, corporate, and VIP clients. The underground market is therefore cashing in on this once-upon-a-year opportunity to charge exorbitant fees for the service.

For the 5,000 dong, 10,000 dong, and 20,000 dong notes, they charge a 20 percent commission. The smaller the note is, the higher the commission will be.

Online money exchanging also springs up this year. Service charges vary and can be as high as 45 percent.

One website quotes their fees as follows: 45 percent for the 200 dong note, 25 percent for the 500 dong note, 12 percent for the 1,000 dong and 2,000 dong notes, and 1-9 percent for notes of 5,000 to 100,000 dong denominational value.

Traders are also selling one-dollar and two-dollar bills at the moment. Depending on the uniqueness and serial numbers of the notes, those can be exchanged at various prices. For example, one trader sells a 1 dollar bill at VND25,000 and a 2 dollar bill at VND49,000 or 50,000.

The official exchange rate at present is VND19,500 to the dollar.

US firm 'sues' Vietnam government for scrapping project

An international arbitrator has taken legal actions to settle a dispute between US developer South Fork and the Binh Thuan provincial government as the latter is set to scrap the former’s $1 billion tourism project.

The above information is provided by US-based Dardenne & Boyd, LLP that represents South Fork whose South Fork Twin Capes project in Binh Thuan’s Phan Thiet resort is set to be scrapped.

The Binh Thuan People’s Committee has announced it will withdraw the project’s investment certificate unless the developer starts construction before December 25.

Local authorities said South Fork had failed to meet a construction timeline it pledged in developing the huge theme-park project.

They also maintained that South Fork did not have sufficient financial capability but registered the project only to transfer it for profits.

South Fork was committed to start the project’s construction within five months of receiving 333 hectares of land in December 2009. But Vietnamese authorities said the developer had done nothing.

The South Fork Twin Capes, licensed in November, 2004 by the Ministry of Planning and Investment, is supposed to comprise first class ‘theme resorts’, two 18-hole golf courses, villas, and a 6,000 seat conference centre.

The project covers an area of 600ha and has registered investment capital of around $50 million.

But the total investment inflows into the project, with an aim to attract ‘five-star visitors around the world by transforming Phan Thiet into a world-class resort’, was said to amount to $1 billion.

In the past, the project was delayed due to difficulties in site clearance and disputes over the local government’s plan to exploit black sand in the project site.

Tan Cang - Cai Mep opens second-phase facilities

The Tan Cang - Cai Mep Deepwater Terminal Area in Ba Ria-Vung Tau Province inaugurated the second phase on Saturday, said Tan Cang-Cai Mep International Terminal Joint-stock Co. as the operator of this phase.

The second phase, marking the completion of the entire project, is comprised of a container yard covering 40 hectares and a berth section extending 590 meters.

In the first phase that was completed and put to service in June 2009 by another operator, facilities include a berth section of 300 meters and a container yard of 20 hectares.

The operator of the second-phase facilities, which is a joint venture between Saigon Newport Corp. and three shipping lines of Mitsui OSK Line from Japan, Hanjin from Korea, and Wanhai from Taiwan, also welcomed the maiden call of The New World Alliance’s direct service that links up the container terminal to their Eastern Asia-North Europe sea route coded JEX.

Akira Kurita, general director of the operator, said Cai Mep was the sixteenth port of this sea route operated by The New World Alliance.

This 21-day direct service that uses the deepwater port of Cai Mep will help both importers and exporters in Vietnam to cut costs of transshipment in Singapore, he added.

The entire terminal, with the berth now stretching a total 890 meters and container yard covering a combined 60 hectares, has a designed throughput of 1.8 million TEUs or 25.3 million tons of cargo per year.

It is also equipped with modern facilities and equipment for its cargo handling. These include six ship-to-shore gantries, 20 rubber-tyred gantries, 30 container trucks and 600 sockets for fridge containers.

Saigon Newport Corp. said the container terminal is now the most advanced and fully-done deepwater terminal in Vietnam.

Diplomat warns against Cambodia-investing tricks

Fraudsters are trying to lure gullible Vietnamese investors into projects in Cambodia to steal their money amounting to US$100,000 per case, Vietnam’s commercial counselor in Cambodia, told Tuoi Tre.

Vu Thinh Cuong warned Vietnamese businesses wanting to invest in Cambodia against the tricksters who often use infrastructure projects related to bridges, roads, or hospitals as baits.

They would invite Vietnamese investors to invest in such dubious projects by advancing from US$50,000 to $100,000 as ‘diplomatic fees.’

After the fees have been collected, they will keep demanding more money and then break off their contact with the victims.

To earn trust from the Vietnamese, those guys claim they have connections with the Cambodian government and even offer to arrange meetings with high-ranking officials.

However, such meetings, if arranged, would just be for social purposes only rather than for any serious business discussions.

Even worse, the swindlers have Cambodian interpreters distort the conversations between Vietnamese businesses and these officials to help them control the situation.

These hoaxers will not provide any evidence of the Cambodian partners’ finance if requested by Vietnamese investors.

They even resort to intimidation if the investors determinedly ask their advance back.

For land purchase deals, they will demand a $20,000-50,000 fee to set up relationships with local authorities.

After that, they tend to request more money until the investors lose their patience and forfeit the advancement.

All the businesses that have been cheated so far have one thing in common: they did not gather enough information on the projects and were so hasty to pay the ‘fees’, Cuong said.

They should have consulted Vietnamese representative agencies in Cambodia like the Embassy or Trade Office first.

The diplomat complained that most businessmen that visited these agencies have already been cheated.

Deadline given to canal cleanup project

The HCMC government has set a deadline for completion of a foot-dragging project to rehabilitate the Nhieu Loc-Thi Nghe Canal basin.

Speaking at a meeting on Wednesday with the HCMC Environmental Sanitation Project management unit, city vice chairman Nguyen Thanh Tai urged the project to be completed before the year-end though some packages had fallen behind schedule.

A report on the project’s progress, Package 10 for improving the Nhieu Loc-Thi Nghe Canal is 66% complete due to the incompetence of the main contractor China State Construction Engineering Corporation (CSCEC). Meanwhile, most other construction packages are almost finished.

The project management unit is seeking other contractors and preparing legal procedures to terminate the contract with CSCEC to speed up work on Package 10.

As for Package 10C for dredging the canal, which is also moving at a snail’s pace, a leader of the project management unit said only 80,000 cubic meters of sledge out of a total of 781,600 cubic meters has been dredged.

This package can only be put on fast track after another contractor is chosen to replace the existing one.

Funded by the World Bank, the project is designed to control flooding in the canal basin, collect wastewater to treatment plants through a new sewer system and improve the ecological environment along the canal.

The project’s total capital is US$316.8 million, with ODA capital accounting for US$294 million. Signed on July 5, 2001, the credit agreement between the WB and the city will expire by the year-end.