Ministry proposes publicizing State budget reports

The State Budget Department at the Ministry of Finance has proposed publicizing all State budget reports, except for those related to defense and security and the foreign exchange reserves.

According to a draft circular guiding the provision of State budget reports that is posted on the ministry’s website to collect comments from relevant agencies, the ministry is responsible for publicizing State budget and central budget reports.

The reports include the Government’s State budget projections submitted to the National Assembly (NA); State budget estimates and central budget allocations approved by the NA, statistics about budget spending and State budget reports approved by the NA.

The ministry proposed either publicizing all State budget reports (except for those on defense and security and Vietnam’s foreign exchange reserves) or providing some basic information in these reports.

The basic information is about State budget collections, expenditures, budget deficit and sources used to offset budget deficit, central and local budget overspending, the ratios of State budget overspending to gross domestic product (GDP), public debt, Government debt and Vietnam’s foreign debt.         

The State Budget Department petitioned the Government to publicize more information instead of basic one only. 

The Ministry of Finance will announce related information on its website and send print reports to other ministries, agencies, provinces and centrally-governed cities. 

At present, the ministry only publicizes State and central budget estimates and final figures with 19 contents.

The circular guiding the provision of State budget reports for the public is expected to come into force in fiscal 2017.

VCCI calls for road toll collection transparency

Toll collections on build-operate-transfer (BOT) roads should be better monitored to ensure transparency, the Vietnam Chamber of Commerce and Industry (VCCI) said in its comment on a draft Ministry of Transport circular on road toll collection stations.

VCCI said the monitoring of road toll collections as planned in the draft would not be as effective as expected, so it should be changed.

VCCI suggested the inspection and monitoring of vehicle counts must be done every three months with government agencies, investors, transport enterprises, tax agencies, media, organizations and the public attending.

Toll collection reports should provide daily numbers of vehicles which should be made public, instead of being sent to competent authorities only as mentioned in the draft. The objective is to allow people and transport companies to monitor road toll collections.

VCCI said investors of BOT road projects charge high tolls and their toll collection durations are long, placing pressure on transport enterprises. Though people and transport firms must pay high tolls, they cannot supervise the toll collection process.

Dau Anh Tuan, head of the Legal Department at VCCI, said the best way to protect the interests of investors, the Government and road users is to ensure transparency.

As of July, the Ministry of Transport had mobilized a combined VND212.4 trillion (US$9.5 billion) for 79 projects, mainly on National Highway 1 and Ho Chi Minh Road (National Highway 14).

The State Bank of Vietnam reported that banks have provided transport infrastructure projects with huge loans which account for 85-90% of total investment costs of BOT and build-transfer (BT) projects.

By June, commercial banks had pledged a total of up to VND159.2 trillion (US$7.1 billion) in loans for BOT and BT transport projects.

Furniture exports must meet int'l standards

Furniture exporters should become more aware of import market regulations and standards in various countries, delegates said at a seminar held in HCM City on September 28.

Huynh Van Hanh, deputy chairman of the Handicrafts and Wood Industry Association of HCM City, said that after removal of tariff barriers under free trade agreements, technical barriers would increase in many importing countries.

In addition to complying with legal sources of timber, furniture producers need to pay more attention to social responsibility during production and trading and improve the safety of their products, she said.

Producers must ensure that formaldehyde content on surface finishing, resins and wood and finishing products does not exceed the permitted level.

"Each market has its own requirements, so we must understand what we sell to markets and their requirements," he said.

Scott Steady, product manager for chemical emissions testing and certification at UL Environment, said the US had strict safety regulations and standards to protect against risk of consumer products.

In July 2010, the Formaldehyde Standards for Composite Wood Products Act became part of the law of the Toxic Substance Control Act (TSCA) Title VI, he said.

In July, the US Environmental Protection Agency released a pre-publication of their rule that is consistent with TSCA, he said.

Formaldehyde is a colourless, flammable gas at room temperature and has a strong odour. Exposure to formaldehyde can cause irritation of the skin, eyes, noses and throat.

High levels of exposure may cause some types of cancer.

One of the primary uses of formaldehyde is in industrial resins and adhesives, including those used to make composite wood products, he said.

In addition, the US also has strict safety regulations and standards. Failure to meet either a CPSC regulation or an industry consensus standard can result in a recall.

Giuseppe Barisan, Global Operations director at UL Furniture and Furnishings Division, said more than 37 million residential products, including chairs, outdoor furniture and case goods, were recalled in the past two years in the US and EU markets due to a top-over or instability risk.

The consequences of a recall can damage a brand reputation and bear high costs, lawsuits and settlements.

Producers should thoroughly understand such regulations and standards and keep a close eye on changes to avoid risks when exporting their products, he said.

To reduce risk, companies need to strengthen their protocol, implement risk-based testing, and use third parties to conduct testing, he said.

Pham Thi Thu Hang, general secretary of the Viet Nam Chamber of Commerce and Industry, said that because of the country's participation in many free trade agreements, the wooden industry was expected to develop strongly.

She urged local furniture firms to pay more attention to meeting consumer demand for environmentally friendly products, obtaining certificates such as GreenGuard, as well as conducting market research and building brands for their products.

According to Hanh, Viet Nam ranked fifth in the world in wooden product exports.

Last year the country earned US$6.9 million from wood and wooden product exports, with the figure expected to reach $7.5 billion this year.

Global trade of wooden products was worth $467.7 billion a year, with exports from Viet Nam accounting for only 1.65 per cent. Thus, there is still more room for local wooden firms to expand their exports.

However, firms must focus more on improving their technologies and obtaining quality certificates to enable their products to penetrate more export markets, he said. 

Genetically modified corn’s high financial potential

Genetically-modified (GM) maize can benefit the national economy greatly and aid environmental protection, according to Tran Xuan Dinh, deputy head of Vietnam’s Department of Crop Production.

Dinh said at a recent conference on biotechnological crop production that GM maize yields are 25% higher than their traditional counterparts, offer higher financial reward.

“Featuring a resistance to pests, meaning that less pesticide is used, the GM variants also contribute to environmental protection,” he added.

According to Dinh, there are 16 varieties of genetically-engineered corn permitted for cultivation in Vietnam by the Ministry of Agriculture and Rural Development.

But the cultivation of the GM varieties is limited due to the seed’s price, which is more expensive than the F1 hybrids, and the current price of corn products is low.

Currently, about 200 metric tons of GM corn seeds are available in the Vietnamese domestic market.

VNDirect Securities: Economic policies to be loosened

VNDirect Securities expects a loosening of economic policies by the government from the beginning of October in a bid to achieve the annual GDP target of 6.7 per cent, according to its report released on September 28.

To achieve the target the government will loosen monetary policy by lowering interest rates and increasing crude oil exploitation.  

“Some commercial banks have cut their interest rates and PetroVietnam has been directed to increase its crude oil exploitation,” VNDirect’s analysts wrote.

PetroVietnam was directed to exploit 1 million more tons of crude oil this year, which will add 0.3 per cent to national GDP.

The policy space for loosening fiscal policy is limited due to the State budget deficit and public debt being high.     

The State budget deficit has stayed at a high 5 per cent or more annually over the last five years, resulting in it inching towards the ceiling of 65 per cent of GDP. With the current situation the possibility of using fiscal policy to increase economic growth is therefore limited.  

In order to secure financial capacity in the medium term the government is making some initial moves to balance the State budget. According to its plan approved recently by the National Assembly, the budget deficit is to be cut to 4.95 per cent of GDP annually.

“Normally, in order to balance the State budget the government will cut spending or increase revenue,” the report noted. “It is unlikely, however, that Vietnam would cut spending at the moment as it would negatively affect economic growth. Moreover, operational spending and repaying public debt account for 85 per cent of total spending, and with this structure it is hard to cut spending.”

The government will not have much space to loosen fiscal policy to any great extent. An example of that is Circular No. 06 having lower risk indicators for commercial banks compared to the draft of Circular No. 36.

On the other hand, the State Bank of Vietnam (SBV) has longer maturities on government bonds, of five to ten years. The interbank interest rate also remains low.

The pressure to increase interest rates on government bond has eased as Vietnam has reached its target for 2016. Therefore, the report said, from now to the end of the year the SBV’s interest rate management will be easier.

An important factor for the government in loosening economic policies is that the US Fed may only increase interest rates by 0.1 per cent this year, from 0.5 per cent to 0.6 per cent.

BUV's first phase in final stage

The main items in the $25 million first phase of the British University Vietnam (BUV)’s $70 million campus at the Ecopark urban area in northern Hung Yen province are expected to be completed in late 2017.

Mr. Graeme Davies, President of BUV, told a media gathering on September 27 that upon completion the Ecopark campus will welcome 5,000 to 7,000 Vietnamese and international students.

BUV was established in 2009 and is considered a symbol of Vietnam-UK educational cooperation. It has now graduated four groups of students.

Its long-term plan is to expand into postgraduate training and short-term training programs for individuals and enterprises.

“7,000 students is BUV’s long-term goal and will take time to reach,” Mr. Davies said. “We want sustainable development so we should not be too focused on increasing quantity without quality.”

On September 27 BUV also held a graduation ceremony for students in Course 4. The number of students at the university is on the increase, with 20 students in the first years and 100 new students this year.

BUV is the first and only university in the country fully licensed to deliver undergraduate degree programs of the University of London and Staffordshire University. Earlier this year it became the first international university in Vietnam to be permitted by the Ministry of Education and Training to conduct full-time Finance and Economics studies.

In a previous interview with VET, Mr. Jesse David Boone, General Director of BUV, said that Vietnam’s leadership, education system, and population in general have always held education in the highest regard. This fundamental support to develop the leaders of the future is the perfect foundation for investment in education in the country.

“Ho Chi Minh City and Da Nang are both very interesting markets that could be considered in the future,” he said. “The key for us is to set up where there is the need and support for a top university like BUV, and we will keep our options and our eyes open for future opportunities to bring world-class British education to Vietnamese students throughout the country.”

Techmart Hanoi 2016 opens

The 2016 Hanoi Technology and Equipment Fair (Techmart Hanoi 2016) officially opened on September 28, attracting the participation of 390 groups, including 50 foreign enterprises.

The opening ceremony saw the presence of Politburo member and President of the Vietnam Fatherland Front Central Committee Nguyen Thien Nhan and a number of representatives from central agencies, ministries and sectors.

In his opening speech, Chairman of the Hanoi City People’s Committee Nguyen Duc Chung said Techmart Hanoi 2016 offered a good chance for enterprises to uncover innovations through scientific research, especially in the field of technology, while new equipment that would have a tremendous impact on the economy would be introduced and transferred to the relevant industries.

Under the theme “Connectivity for Mutual Integration and Sustainable Development,” Techmart Hanoi 2016 will focus on the fields of information technology, electronics, mechanical engineering and technologies for the preservation and processing of farming products, among others.

The major activities at the fair include the showcasing of science and technology products, the signing of contracts and memoranda of understanding, consultations on science and technology and presentations on new technologies and equipment.

The annual event, coorganised by the Hanoi City People’s Committee and the Ministry of Science and Technology, is aimed at developing the technology market and strengthening the association between research and training, and business and production.

It also seeks to honour Hanoi’s science and technology professionals and boost research cooperation and technology transfers with other countries in the region and around the world.

Customs procedures still irritate business

Customs procedures remain a source of irritation for domestic firms though the customs authority claimed it has implemented reforms to make life easy for importers and exporters, heard a conference in Hanoi on Monday.

The conference was held by the General Department of Customs to collect comments from businesses on a plan to reform and develop the customs sector in 2016-2020.

A representative of the Vietnam Automobile Manufacturers Association (VAMA) said a requirement that importers must present certificates of origin (C/O) to customs agencies in a short period of time has made life tough for importers.

He said customs agencies ask firms to submit C/O within two days after the date of goods arriving at ports but sellers normally issue C/O within seven days or longer.  

Phan Thong, general secretary of the Vietnam Shippers’ Council, said at the conference that it now takes firms 12 days to get customs clearance done, compared to 14 or 21 days earlier. Thong spoke highly of the customs’ efforts but stressed that the time needed for customs clearance must be further reduced.

However, he noted costs of keeping goods at warehouses and ports are prohibitively high. Therefore, cutting the customs clearance time will help enterprises save time and money and thus improve their competitiveness.  

According to a survey of 500 major export-import companies conducted by the General Department of Customs in July-August, 85% of respondents hail customs reforms while the remainder wants customs procedures to be streamlined further.

Vu Ngoc Anh, deputy head of the General Department of Customs, said 54 businesses have become partners of customs agencies. Anh said the figure is too small compared to 4,000 that file 80% of customs declaration forms.

He noted of these firms 3,000 contribute 80% of export-import tax revenues and that the customs will enhance cooperation with businesses in the coming time.

According to the department, by early August 1 as many as 150,000 documents had been handled under the one-stop-shop mechanism and the time to complete administrative customs procedures had fallen by 15-30%.

The department pledges to provide over 70% of customs public services online by the end of this year with 50% being common customs declaration ones.

HCMC customs sees year’s tax target as obtainable

The HCMC Department of Customs is pinning high hopes that import-export tax revenues will meet or even beat the full-year target as the agency has already collected big sums this year.

The department said tax revenues from import and export activities are estimated at VND74 trillion (US$3.34 billion) in January-September and that the VND102.5 trillion target set by the Ministry of Finance for 2016 could be met. 

Speaking to the Daily, Nguyen Quoc Toan, deputy head of the import-export tax division under the department, said tax revenues in the nine-month period are equivalent to 72.2% of the year’s target.

In September alone, import-export tax collections have amounted to VND8.7 trillion, a sharp increase from a year earlier thanks to stronger imports and exports.

As of September 15, exports had neared US$27.5 billion, a 10.5% year-on-year pickup. Meanwhile, imports had reached some US$31.5 billion, up 9.6%.

Imports of steel products stood at US$1.45 billion, up 10.5% year-on-year, and those of autos had totaled US$552 million, surging 30% and electronic devices US$4.48 billion, up 20%. Notably, imports of computers and household electrical appliances had soared 44.5% to US$4.83 billion. 

Toan noted that except for autos, other imported items were for local production. This indicates that manufacturing has improved. 

He said import-export tax revenues had met just 30% of the target by end-April, so the department worried it could not be able to realize the 2016 target set by the finance ministry.

At a meeting in June, a leader of the HCMC Tax Department said the municipal Department of Customs would unlikely achieve its target, so the tax department is tasked with collecting an extra VND23 trillion from domestic sources. 

Toan said thanks to increasing export-import tax revenues last month, the HCMC Department of Customs expected it could see export-import tax revenues higher than assigned.

He said import tax revenues from fuels have edged up as well.

PVN to step up oil extraction

The Government has told Vietnam National Oil and Gas Group (PVN) to increase crude oil extraction by one million tons in 2016 compared to the target set earlier to offset a shortfall for the State budget.

According to the revised target, PVN will extract 17 million tons of crude oil this year. The additional oil volume is expected to contribute US$350 million to the State budget.

In the year to September, PVN has posted revenue of VND318 trillion (US$14.25 billion) from pumping nearly 13 million tons of oil, meeting 62% of the full-year target. The group has reached 81% of its goal of contribution to the State budget in the nine-month period.

The global oil price has averaged US$42 per barrel in the January-September period, far below US$60 per barrel the group projected in its business plan for this year.

The lower-than-expected oil price on global markets since 2014 has affected PVN’s production and business plans. The group has had to cut investment and production costs to avoid losses.

Last year, PVN was assigned to extract 16 million tons of crude oil but the actual volume was 2.1 million tons higher than targeted, with most of it extracted from domestic oil fields.

Rice exports down 16% in first nine months

Vietnam’s rice export volume in the January-September period has fallen 16.4% year-on-year to an estimated 3.67 million tons, according to a report released on September 27 by the Ministry of Agriculture and Rural Development.

Revenue from rice exports in the period has dropped 12.5% against a year ago to US$1.69 billion as local firms have had difficulty exporting the staple food to China.

China, Vietnam’s biggest rice importer, made up 35% of Vietnam’s total rice export volume in January-August, or 1.18 million tons worth US$538 million, down 21.4% in volume and 12.3% in value over the same period last year.

China’s tight controls on rice border trade over smuggling fears have affected Vietnam’s rice exports to this northern market, according to local enterprises.

China has not applied a protocol on quarantine against rice and rice bran from Vietnam, which is expected to create a legal corridor for such products of Vietnam to enter the northern market, as China has yet to recognize any Vietnamese firms as being eligible to sterilize rice for export to the market in line with the protocol.

However, Hoang Trung, head of the ministry’s Plant Protection Department, said so far Vietnamese rice has been able to enter China through temporary technical measures and the protocol is not the main reason for the decrease in rice exports.

This November, a group of experts from China will come to Vietnam and inspect rice farming areas, production facilities, capacity of exporters, and sterilization facilities in accordance with the protocol.

The major cause for the fall in rice exports, Trung said, is mounting competition from other exporting countries including India, Thailand and Cambodia. Compared to those competitors, the capacity of Vietnamese rice exporters is still weak, he said.

Vietnamese rice has lost its market share to competitors in not only China but also other markets such as the U.S., Europe, and Japan.

In addition, demand for rice in traditional markets such as the Philippines and Malaysia has dropped.

The first eight months saw Vietnam’s rice exports to the Philippines falling by 67.4% year-on-year, Malaysia by 43.3%, Singapore by 35.7%, Ivory Coast by 25.3%, and Taiwan by 14.1%.

However, exports to Ghana and Indonesia, the second and third biggest rice importers of Vietnam, have grown strongly in the period with US$165 million worth of rice shipped to Ghana, up 30%, and US$140 million to Indonesia, 25 times higher than in the same period last year.

Exports increase 6.7 per cent

The country’s exports are estimated to reach US$128 billion in the first nine months of this year, up 6.7 per cent year-on-year, according to the latest statistics from the General Statistics Office (GSO).

Of which, the domestic sector contributed $37 billion, up 5 per cent, and the foreign-invested sector (including crude oil) made up $91.1 billion, up 7.4 per cent.

However, in September alone, exports plunged 6.8 per cent to an estimated $15 billion compared to August due to a turnover reduction in several key export items such as telephones and components (down 17.4 per cent to $506 million), footwear (down 18.2 per cent to $200 million) and garments (down 7.1 per cent to $175 million.)

From January to September, the country spent $125.4 billion on imports, surging 1.3 per cent over same period of last year, with the foreign-invested sector making up $74 billion and the domestic sector accounting for $51.4 billion.

A slight increase seen in both sector’s imports in nine months proved that local production was well on track to recover, the GSO said.

In the period, Việt Nam enjoyed a trade surplus of $2.7 billion. Unsurprisingly, the foreign-invested sector obtained a trade surplus of $17.1 billion while the domestic sector suffered a trade deficit of $14.4 billion. 

Việt Nam’s farm exports rise in 9 months

Agro-forestry-fisheries exports fetched an estimated US$2.5 billion in September, lifting the total nine-month turnover to $23.3 billion, up 6 per cent year-on-year.

According to the Ministry of Agriculture and Rural Development, agricultural exports during the reviewed period experienced a yearly rise of 7.2 per cent to $11.1 billion.

Of this, coffee recorded the highest increase of some 40 per cent in volume and 22 per cent in value compared with same period of last year. Up to 1.39 million tonnes of coffee, valued at $2.48 billion, was shipped to overseas markets from January to September.

Pepper came next with 146,000 tonnes for $1.19 billion, up 31.5 per cent in volume and 13.1 per cent in value, respectively.

After suffering a temporary downtrend, tea and rubber bounced back, enjoying positive growth of 0.2 per cent and one per cent, earning $152 million and $1.1 billion, respectively. 

However, the export of rice, which is a key farm produce in the country, dropped 16.4 per cent in volume and 12.5 per cent in value to 3.76 million tonnes and $1.69 billion, respectively. China remained the largest importer of Vietnamese rice with a 35.5 per cent market share, followed by Ghana with 11 per cent and Indonesia with 9.4 per cent. 

In this year’s nine-month period, shipment of seafood products brought home more than $4.9 billion, surging 4.3 per cent year-on-year. The US, Japan, China and South Korea were the four main importers of Vietnamese seafood, making up 53.7 per cent of the total export revenue.

At the same time, forestry exports raked in $5.1 billion, equivalent to the value during the same time last year. 

Gov’t lists top Public-Private Partnership projects

For the first time ever, the list of national Public Private Partnership projects in the 2016-2020 period was submitted to the Government late last week by the Ministry of Planning and Investment.

The list was carefully selected from three ministries and four localities that have great demand for PPP capital, including the ministries of Transport, Health, Agriculture and Rural Development and the cities of Hà Nội, HCM City and Đà Nẵng, in addition to the province of Quảng Ninh.

To be listed, such projects had to meet the requirements of large size, high feasibility, careful preparation, high importance and suitability.

A number of 68 projects have been chosen with total capital of VNĐ335 trillion (US$15 billion), of which the Government needs to prepare total capital of VNĐ115 trillion ($5.2 billion).

The 68 projects were divided into two groups with 26 listed as top priority with total capital of VNĐ255 trillion ($11.5 billion).

The Ministry of Planning and Investment has worked with the Ministry of Transport to name all 20 projects of the North–South High-Speed Railway on the list.

The top-priority list includes the Đồng Điền Reservoir, a high-technology solid waste treatment plant in Hà Nội, a waste water treatment plant in Hòa Khánh Industrial Park in central city of Đà Nẵng, the monorail project No 3 in HCM City, and one project of the Ministry of Information and Communications.

“These are projects that basically can recoup their investment and attract concern from investors,” Đào Quang Thu, deputy minister of Planning and Investment, was quoted as saying in Đầu Tư (Việt Nam Investment Review) newspaper.

The Ninh Bình-Thanh Hóa Highway project has attracted the most concern of investors. The four-lane, 107 km long project has five investors waiting approval.

“Due to the limitation of the Government’s capital, it is difficult to encourage private investors to join PPP projects, and therefore, relevant authorities must pay attention to such priority PPP projects,” the deputy minister added.

“To increase attraction for PPP projects, especially with international investors, the Government’s risk share policy should be adjusted and updated soon, including the revenue guarantee,” Nguyễn Nhật, deputy minister of Transport, said.

In addition, the ministry has also published a PPP project list on the locality level including 40 projects (mostly transport) at a total cost of VNĐ40 trillion ($1.8 billion).

Haraco, Vietnam Air join forces to lure tourists

Hanoi Railway Transport Joint Stock Company (Haraco), Vietnam Airlines and the HCMC Tourism Association have inked a cooperation deal to provide train and air services for people to travel between HCMC and northern Vietnam.

The deal is expected to help the railway sector lure more customers amid mounting competition from domestic low-cost carriers.

Nguyen Thi Khanh, vice chairwoman of the association, said the three sides have cooperated in organizing a trip from HCMC to Hanoi by train and a return trip by plane. The tour took in tourist attractions in the northwestern region.

Such a tour is scheduled to be made available on the market late this year.

Long travels and high fares are the major problems of railway services. “Compared to services offered by low-cost carriers, traveling by train is much less competitive, so the three sides have partnered to solve the problems,” Khanh said.

Last year, Saigon Railway Transport Company cooperated with the association to serve tourists from HCMC to destinations in the central region. The company initially cut fares by 20% but later raised the discount rate to 35% for travel firms to launch cheaper tours.

Mainstream Renewable Power, GE to develop wind parks

Global independent developer of wind and solar power Mainstream Renewable Power and GE Energy Financial Services, a GE Capital business unit, said on September 28 that they have signed a term sheet to develop, build and operate large-scale wind parks in Vietnam.

They said in a statement that the projects are expected to go up on both greenfield and partially developed sites, and intended to include cooperation with local and international developers. These projects will get financing through a Mainstream and GE Energy Financial Services joint development agreement.

The aim of the agreement is to help compliment the 1GW initiative that GE and Vietnam’s Ministry of Industry and Trade signed in May 2016 to prop up large-scale Vietnamese wind project buildout.

Andy Kinsella, chief operating officer of Mainstream Renewable Power, described delivering low-cost renewable energy in high-growth markets such as Vietnam as Mainstream’s key strategic focus.

“We have a strong track record as a leading developer in Africa and South America. We look forward to expanding our operations in Asia and working with GE to bring much needed power to Vietnam,” Kinsella said in the statement.

The companies expect that they will better enable Vietnam to reach its 2020 renewable energy target by combining Vietnam’s abundant wind resource with GE technology, know-how and in-country manufacturing capability and Mainstream’s expertise in development, construction and operations.

According to Vietnam’s Power Master Plan VII, output will rise from 194-210 billion kWh last year to 330-362 billion kWh in 2020. Clean and renewable energy development and its growing share in the country’s energy consumption mix are identified as the priorities in the country’s Sustainable Development Strategy 2011-2020 to help attain a sustainable economy.

Pre-feasibility study for Liên Chieu port

The central city of Ðà N?ng in co-operation with experts from the Japan Port Consultants company and the Overseas Coastal Area Development Institute of Japan have begun a pre-feasibility study to make Liên Chi?u Port a cargo port.

Vice chairman of the city’s People’s Committee, Nguy?n Ng?c Tu?n, said the study will run until February with the support from Japan and Yokohama City.

He said Ðà N?ng has been seeking funds of US$200 million from the official development fund for the project and plans to redevelop the port on a public-private partnership model.

Liên Chi?u port will be designed as a deep sea cargo port in the ASEAN region, serving Thailand, Myanmar and Laos in the East-West Economic Corridor No 2. Liên Chi?u port, which currently can handle 50,000 deadweight tonnage container ships, will be able to handlle 100,000-tonne ships and cargo ships with a loading capacity of 8,000 twenty-foot equivalent unit (TEUs) from 2025.

According to the ministry of transport, Ðà N?ng will handle 29 million tonnes of cargo by 2030. 

Vi?t Nam’s seaport system development plan to 2020 designates Ðà N?ng Port as a major commercial port and one of the key gateways to the East Sea from the sub-Mekong region.

In March, Ðà N?ng and Japan’s Yokohama agreed on an extension of the Memorandum of Understanding on technical co-operation in urban development to 2016-19, boosting co-operation between the two cities in investment promotion, urban management, eco-city development, sustainable urban development.

Government might lift milk price cap

The State should eliminate price ceilings for milk products and control milk prices via input materials instead, experts said. 

Price ceilings were put in place in May 2014 by the Ministry of Finance. At the end of the second quarter of 2015, the ministry extended the price ceiling through the end of this year. 

The Ministry of Finance’s Pricing Management Department said after stabilising milk prices, the prices dropped by between 0.1 percent and 34 percent for milk products for under six year-olds. 

Nguyen Anh Tuan, Director of Ministry of Finance’s Price Management Department, told Tin tuc (News) newspaper early this week that the price ceiling would be effective until the end of this year and then the ministry would review the price ceilings. 

Nguyen Thi Xuan, a Hanoi resident, said the current price for a 900g can of Nan milk is 340,000 VND , while it was 400,000 VND before the price ceiling was enforced. 

She worried that if the State eliminated the price ceiling the price of milk products for children would increase again. 

Meanwhile, Phuong Thao, owner of a milk shop in HCM City said before the price ceilings, milk producers and distributors had adjusted their prices according to supply and demand on the market and explained the reasons for the adjustments. 

Since the price ceiling was enacted, companies had offered less discounts and promotions for agencies and customers when they adjusted milk prices, she said. 

Vu Ngoc Quynh, General Secretary of the Vietnam Dairy Association, said in the short term, buyers have enjoyed lower prices thanks to the price ceiling. 

But in the mid and long term, the mechanism would hinder the development of milk products and reduce competition among producers, said Quynh. 

Price expert Ngo Tri Long said the mechanism discouraged companies from investing in production of new products and gave no incentive to improve product quality. That also made the companies unable to compete at home and abroad. 

The State should abolish the price ceilings and let the market decide the prices, Long said. To control milk prices without the price ceiling, the State should manage the import of materials for the production of milk products by using the tax and customs policies. 

He also said that it would be difficult to increase the prices of milk products for under six year-olds after eliminating the price ceiling because dairy companies must register the new prices and get approval from the State to adjust their prices. 

Nutrition and Food Group under Eurocham represented six foreign multi-national dairy companies in Vietnam proposing that the State should remove the price ceiling and use the market to determine prices. 

To ensure cheap milk powder products, the State should reduce import tax and value-added tax for the components of these products. The import tax for milk is 5 percent for products from ASEAN and 10 percent for products from other countries.

Industrial production expands by 7.4 percent in 9 months

The Index of Industrial Production (IIP) rose by 7.4 percent in the first nine months of 2016, according to the General Statistics Office (GSO).

The increase is lower than that of the same period last year (9.9 percent) due to strong reduction in ores mining (4.1 percent).

Growth was seen in processing and manufacturing (10.4 percent), electricity production and distribution (12.1 percent), and water supply and waste treatment (6.9 percent).

Several industrial products registered higher growth than the previous year include TV (86 percent), rolled steel (24.3 percent), automobiles (21 percent), cattle feed (20.3 percent), crude steel and iron (17.2 percent), and cement (15.2 percent).

The central province of Quang Nam led nationwide with remarkable increase of 30.7 percent, followed by northern Thai Nguyen province (28.5 percent) and Hai Phong city (16.5 percent).

IIP in major cities such as Ho Chi Minh City and Hanoi increased by 7.3 percent and 7.1 percent, respectively.

According to the GSO, the inventory level of the processing and manufacturing industries as of September 1, 2016 hiked up 9 percent over the same period last year.

High levels of inventory were recorded in electronic and optical products and computers (125 percent), motor vehicle (40.6 percent), and paper and paper-made products (32.9 percent).

The number of workers in industrial businesses saw a year-on-year increase of 4.2 percent, mainly in centrally-run cities and provinces such as Thai Nguyen, Hai Phong, Vinh Phuc, Binh Duong, Dong Nai, Bac Ninh, Da Nang, Hai Duong, Hanoi, and Ho Chi Minh City.

Housing stimulus package disbursement exceeds 86 percent

More than 28 trillion VND (1.25 billion USD) was disbursed from the 30 trillion VND housing stimulus package up till the end of August, according to the Ministry of Construction. 

The disbursed amount accounted for more than 86 per cent of the total amount that banks had committed to lend, or 32.8 billion (VNA). 

Banks committed to provide cheap loans from the housing stimulus package to 56,181 households and individuals, worth 27.48 trillion VND. Till date, 51,235 households have received disbursements worth 22.98 billion VND in total. 

For social housing developers, banks signed contracts to provide loans to 51 projects, all of which received the disbursement of cheap loans. 

The construction ministry said social housing supply mainly came from projects which started construction at the beginning of this year. Supply was, however, still below demand.

Launched in June 2013, the credit package offers loans with a maximum interest rate of 5 percent to individual borrowers for no longer than 15 years.

Bac Giang seeks to facilitate foreign investment

Authorities from the northern province of Bac Giang and foreign investors gathered at a meeting to seek ways to promote investment on September 29. 

Deputy Director General of New Hope Company Lam Khoa Dat highlighted the potential of the province, such as favourable location, numerous land and tax incentives, and a large workforce. 

Nguyen Thi Thu Trang from the China-funded Cam Lam Viet Nam JSC in Dai Lam Industrial Park in Lam Giang district complained of a lack of infrastructure and administrative procedures for foreign workers residing in the province. 

Participants suggested Bac Giang upgrade the power grid and roads to aid enterprises and simplify administrative procedures for foreign workers. 

Areas should be zoned off for agricultural and industrial development, according to local enterprises. 

Chairman of the provincial People’s Committee Nguyen Van Linh said the province has assigned management boards of local industrial parks to grant licenses for foreign workers. 

A hotline at 19006118 and an email address at duongdaynong@bacgiang.gov.vn have been launched from August 1 to better communicate with local firms. 

A provincial centre for public administration began operation in early September to support local investors, Linh said. 

He also called on enterprises to cooperate with local vocational training institutions in training as well as job placement. 

He expressed his hope that they will use logistic services provided by the International Logistics Centre to be set up in Bac Giang city. 

He urged local investors to work with the locality to protect the environment. 

Bac Giang is home to 250 valid foreign direct investment (FDI) projects, with a total capital exceeding 2.94 billion USD. 

In the first half of this year, they earned 22.58 trillion VND (1.01 billion USD) and exported 1.12 billion USD worth of products, accounting for 71.9 percent and 80.1 percent of the province’s industrial production value, and export value, respectively. 

They contributed 210 billion VND (9.45 million USD) to the State budget. 

During the conference, the local leader presented a certificate of investment license to build the International Logistics Centre on 71 hectares, worth nearly 4.2 trillion VND (188.73 million USD).

Medium-term public investment plan reviewed

Deputy Prime Minister Vuong Dinh Hue ordered the restructuring of capital sources in the medium-term public investment plan in 2016-2020 at a recent meeting in Hanoi.

He asked the Ministry of Planning and Investment to clarify the investment mechanism and capital arrangement for key national projects in transport, climate change adaptation, drought and saltwater intrusion prevention, and social infrastructure in health, education, communication information and science technology.

The Deputy PM requested the ministry wisely use 2 trillion VND (90 million USD) – part of money for medium-term public investment plan in 2016-2020 to carry out major projects like the North-South Expressway, the border patrol road in the southwestern region, and national target programmes on climate change, drought and saltwater intrusion.

The ministry needs to work with the Ministry of Finance to review local budget overspending, added capital for public investment, and the use of money collected from the lottery to implement projects in transport, irrigation, and other necessary fields in 2017-2020.

The two ministries were urged to propose uses for the 10 trillion VND (450 million USD) sourced from selling shares in State businesses in 2015 to supplement capital for public investment in 2017.

VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR