Industrial zones see rise in investment

 

Industrial parks and export processing zones in HCM City ar expecting investment to quadruple in the first half of the year, according to the HCM City Export Processing and Industrial Zones Authority.

 

HEPZA has forecast a figure of US$1.352 billion while the comparable figure for last year was $319.5 million. This includes nine new foreign-invested projects worth $1.023 billion besides fresh capital infusion into 14 existing ones.

 

In the first five months of the year, the city's 14 IPs and EPZs attracted investment of $1.3 billion.

 

Nearly 70 per cent of the 1,763 ha of land in IPs and EPZs is occupied.

 

More than 256,000 Vietnamese and 2,180 foreign workers are employed.

 

FDI, which last year was worth a mere $94 million in the first half, is expected to surge to $1.18 billion in the same period this year.

 

Firms from Singapore, South Korea, Japan, the US, the Netherlands and Malaysia are among those getting licences so far this year to invest in high technology, packaging, plastic, engineering and other areas.

 

In terms of cumulative investment, Singapore leads with $1.08 billion in IPs and EPZs, followed by Japan with $833 million, Taiwan with $468 million, and South Korea with $179 million.

 

Vu Van Hoa, head of HEPZA, said migrant workers from other provinces and cities accounted for 70 per cent of the total workforce in the city's IPs and EPZs.

 

However, low salaries, pressure to work overtime and poor infrastructure for housing, healthcare, education, shopping and entertainment had driven workers away, he said.

 

Only five IPs and EPZs have housing for workers and they can accommodate only 6,000 people.

 

By the end of this year nine more housing projects are expected to be completed with a capacity to house 12,000 workers.

 

Investors in new industrial parks would be required to set aside enough land for social infrastructure and housing, Hoa said.

 

By 2020 the city will have 22 IPs and EPZs.

 

City economy continues to hum along

 

HCM City again achieved a high growth rate in May but its economy also continued to face several difficulties and inflation remained high, a review meeting held by the People's Committee on Thursday heard.

 

Thai Van Re, director of the Department of Planning and Investment, said industrial production in the first five months rose by just 12.4 per cent compared to 13.8 per cent in the same period last year.

 

In May this increased 4.2 per cent month-on-month while retail sales and services expanded by 2.7 per cent.

 

The inflation rate slowed in May from 3.16 per cent in April to 2.38 per cent though it remained higher than in the rest of the country's cities and provinces.

 

This year the city has also implemented several measures to curb inflation, stabilise the economy, and ensure social security – like the programme to stabilise the prices of essential goods, including food, medicine, and school supplies.

 

City officials also reported on other difficulties like a shortage of skilled labour, shortage of funds for transport projects, the rise in fatalities caused by road accidents, and outbreaks of disease.

 

The shortage of labour has been caused by workers from other provinces returning home from HCM City to work there.

 

High lending interest rates had forced businesses to hike the prices of their products, the Department of Industry and Trade said.

 

Le Hoang Quan, chairman of the People's Committee, said the main task now was to stabilise and maintain production, create jobs, and ensure basic social security.

 

The city was determined to fix the difficulties faced by businesses and improve the task of stabilising prices.

 

Remote areas get wired

 

Households in 69 disadvantaged districts and remote island communes as well as 32 communes without internet services will receive strong support from 2011-15 as part of a draft programme to provide public telecommunications services.

 

According to the draft, 100 per cent of those communes will have access to broadband internet services by 2015, while the remote and disadvantaged communes will be provided with public telecom services. The draft also said that more than 5 per cent of the households in poor communes involved in the programme would be able to access broadband internet services.

 

In addition, all Party units, authorities, healthcare services and education centres would have phone and internet services.

 

The programme would also be carried out at local cultural centres, communal post offices, border posts, hospitals and schools.

 

The draft was complied on the basis of the results of a previous programme that ran from 2006-10, following discussions between the Ministry of Information and Communications and the Viet Nam Public Utility Telecommunications Service Fund.

 

Another to be indicted in first stock manipulation

 

Vietnamese police are seeking charges against a broker from Sacombank Securities Company for allegedly manipulating stock prices in Vietnam’s first busted stock manipulation fraud.

 

Le Minh Truyen, 27, is accused of helping Le Van Dung, former chairman of Vien Dong Pharma JSC, to illegally control stock prices between May and August 2010.

 

According to police, Truyen used ten different accounts to buy and sell a large amount of shares in the Ha Tay Pharmaceutical Joint-Stock Company.

 

It is the mastermind Dung who had set up 11 different accounts under family’s and friends’ names to ‘purchase’ the Ha Tay stocks, leading uninformed investors to rush in to buy the stocks at inflated prices. Ha Tay’s share prices subsequently increased more than threefold, from VND30,000 ($15) to VND100,000 (US$50) per share.

 

When Dung’s group began to unload their shares in late July, the share prices of Ha Tay company plunged dramatically, resulting in huge losses for the investors who had been misled.

 

Last November, Dung and three associates were arrested.

 

Truyen has not been arrested but been suspended from his brokering job.

 

Sacombank shares lost VND300, or 3.4 percent, to close at VND8,600 on Friday, though the VN-Index increased 3.2 percent to 410.82, the most since December 13.

 

Brokers fight to stay afloat in flat market

 

Stock brokerages are struggling to survive during the prolonged stagnation of the nation's stock markets.

 

Unofficial data suggests that 10 out of 105 listed securities companies were in danger of insolvency, which would trigger a Ministry of Finance regulation that a securities company be placed under control if losses amount to 120-150 per cent of capital for three consecutive months.

 

Meanwhile, a rumour has been raging since mid-April that securities companies are awash in as much as VND11.2 trillion (US$533.3 million) worth of bad debt due to the financing of stock buy backs when prices were higher.

 

The head of marketing for International Royal Securities Co, Nguyen Tien Hoang, denies the rumour, however.

 

"Stock markets have been gloomy for a year, and securities firms have found ways to survive," Hoang said.

 

Just a few small-scaled companies suffered a financing crisis as they were greedy to offer high lending rates but careless to control risk, Hoang said.

 

Phan Minh Tuan, deputy director of the Dragon Capital fund, said that stagnant markets had presented challenges to securities companies but that at least one brokerage in which Dragon Capital had invested was still performing well, with a profitable second quarter.

 

The head of market development for the State Securities Commission, Nguyen Son, said that the commission would inspect securities companies, especially unlisted firms, in an effort to prevent another case such as the one involving Ha Thanh Securities Co.

 

The former chairman of Ha Thanh Securities absconded and left the company with debts of VND100 billion ($4.8 million).

 

"We will focus on corporate governance in securities companies and force them to strictly comply with regulations on financial aquadacy ratios," Son said.

 

In case the companies fell into insolvency and were unable to recover, the commission would encourage a merger with or acquisition by another firm, Son said, noticing that about 15 domestic commercial banks and 20 finance institutions already hold stakes in securities companies.

 

Vietnam mulls taxing owners for not using houses

 

The Ministry of Finance is considering imposing new taxes on houses that are left vacant and unused.

 

Under the proposal, if homes are left abandoned for more three months, they could be subject to a tax of 5% of the property’s total value, according to Dan Tri.

 

If left unused for more than a year, that fee would increase to 10%.

 

Vacant homes, especially villas whose constructions have not been finished, are easily seen in Hanoi.

 

According to the Ministry of Construction, nearly 700 luxury homes in Hanoi remain empty, Dan Tri reported.

 

The ministry is also considering additional fines of between VND10 and VND20 million (up to US$1,000).

 

This is aimed at minimizing wastes in the real estate market.

 

An Sinh apartment block in My Dinh 2 urban area, Tu Liem District, is a typical example, with large homes that have been left abandoned for as much as five years.

 

Others, including Co Nhue, Van Quan and Phap Van-Tu Hiep urban areas, are in the same condition.

 

Vietnam, US to bolster trade cooperation

 

Industry and Trade Minster Vu Huy Hoang paid a working visit to Washington from May 23-25, where he met with US officials, MPs and businessmen.

 

As Co-President of the Vietnam-US Trade and Investment Framework Agreement (TIFA) Council, the Minister held a working session with US trade representative Ron Kirk, reviewing cooperation between the two countries and agreeing on future cooperative measures.

 

Through the TIFA cooperation, the two sides were implementing the Bilateral Investment Treaty (BIT) and the Trans-Pacific Partnership Agreement (TPP). Different viewpoints were discussed at the meeting.

 

Meeting with Agriculture Secretary Tom Vilsack, the two sides agreed that trade in farm produce between the two countries had recently surged.

 

In 2010, the US earned US$630 million from exports of farm produce to Vietnam , 200 percent more than the previous year, while Vietnam ’s farm produce exports to the US were valued at $1.6 billion.

 

They agreed that agriculture was a high-potential field for increased trade and the two sides should boost exports in the near future.

 

Firstly, Vietnam and the US will open their markets for fruit that they cannot produce in their own country due to geographical conditions.

 

On the question of US beef imports into Vietnam , the two sides agreed to promptly solve technical obstacles.

 

Relating to the redefinition of pangasius or tra fish products, Vilsack said that the US would ask for public opinions and require Vietnam to give opinion on this process while the US side would ensure that the process was open and clear.

 

Meeting with the Vietnamese Minister, Senators Jim Webb and John McCain praised Vietnam ’s socio-economic achievements. They said that economic relations would continue to provide momentum to boost relations between the two countries, stressing that the two sides needed to exert efforts to step up the current ties, especially in raising the effectiveness of economic relations.

 

The senators also hailed Vietnam and other ASEAN member countries for actively taking part in the Mekong sub-region initiative of US Secretary of State Hillary Clinton in 2009.

 

During meetings in Washington , Minister Hoang affirmed that Vietnam was an active and responsible partner. However, Vietnam needed a process to conduct the TPP at very high standards.

 

The US side discussed difficulties with Vietnam and said they were ready to help Vietnam with techniques to improve capacity and meet the demands of negotiations, as well as to implement the TPP agreement in the future.

 

During the visit, Minister Hoang also met with representatives of US businesses, answering their questions relating to Vietnamese policies on the macro-economy, the investment environment, custom procedures and import and export issues.

 

He affirmed that implementing those policies was aimed at stabilizing the macro economy, to benefit Vietnam and also to assist foreign businesses operating in Vietnam.

 

French superbank lends $178 mln for power plant

 

French lender Credit Agricole Corp. and Investment Bank has signed a deal to lend US$178 million to help finance Dakdrinh Hydropower Joint Stock Co.’s hydropower project.

 

The amount, which accounts for 80% of the project’s capital, is a 13-year loan guaranteed by Vietnam’s Finance Ministry.

 

The hydropower project is under construction in Quang Ngai Province’s Son Tay District and KongPlong District in Kon Tum Province.

 

The 125-megawatt power plant, which is the biggest one on Tra Khuc River, is expected to generate electricity as of late 2013.

 

Brewers eye franchise business model

 

Increasing numbers of Vietnamese businesses will open franchises of popular international brands as the country opens up its market further following its accession to the World Trade Organization four years ago, a senior official said Thursday.

 

Addressing a seminar entitled Top Franchise Asia 2011-Vietnam Edition, Le Quoc Trung, deputy director of the Ministry of Industry and Trade's Southern Representative Office, noted that franchising is a business model that benefits both sides in a transaction.

 

A franchise offers an entrepreneur a quicker entry into the market at less risk, he said. It offered the advantages of having a recognized brand name, a professional training system and benefiting from technology transfer, he said.

 

However, both the franchise and the franchisee need to identify the right time and map out strategies to ensure success in the market, he said. They should pay special attention to environmentally friendly products and corporate social responsibility, he added.

 

Trung said the franchising model was highly valued all over the world because of its high effectiveness and low business failure.

 

For instance, 5 percent of businesses in the franchising sector face business failures compared to 30-65 percent with other models, he said.

 

The country's rapid economic development, plus its young and dynamic consumers are the main reasons foreign firms seek franchisees in the Vietnamese market.

 

Bui Le Quan from the Vietnam Chamber of Commerce and Industry Exhibition Services Ltd Co said according to the International Franchising Association, global franchise revenues reaches more than US$1 trillion per year.

 

All sectors can be developed under the franchising business model including hotels, bakery, transportation, advertising and property. All companies, from those newly established to multinational firms, can also participate in the model.

 

Vietnam now has more than 70 foreign franchises now including KFC, Lotteria, Pizza Hut, Gloria Jean's Coffee, and Coffee Bean; as well as Vietnamese brands like Pho 24, Trung Nguyen coffee, Sieu Sach sugarcane juice.

 

Among those knocking at the door are famous Singaporean brands including Country Chicken, Don's Pie, Empire State, Popeyes, Snackz It!, Auito Saver, Kooshi, Mondo and Pazzion, KinderGolf and FMDS.

 

The director of Singapore's Astreem Corporation Pte Ltd, Hsien Naidu, said the seminar was a great opportunity for franchisers and franchisees to come together and develop the Vietnamese franchising market further.

 

Representatives of Vietnamese enterprises at the seminar said that the seminar gave them insights into ways they could expand their business at home as well as in overseas markets.

 

The seminar was organised by Vietcham Expo (under the Vietnam Chamber of Industry and Commerce) in collaboration with Astreem Co, a member of the Singapore Franchising & Licensing Association.

 

PetroVietnam chooses US consulting firm

 

The US-based Black & Veatch will provide project management and design services for the 1,200 MW Long Phu 1 Power Plant in southern Soc Trang Province, its contractor, Petro Vietnam Technical Services Corporation (PTSC), said Thursday.

 

"Apart from engineering and project management consulting experience, Black & Veatch has experience as an EPC (Engineering, Procurement and Construction) contractor in the power sector, which is of great importance in assisting PTSC with the engineering and construction of the [power plant]," Nguyen Tran Toan, deputy general director of PTSC, said.

 

PTSC is a subsidiary of PetroVietnam, the investor, and is the engineering, procurement, and construction contractor for the plant.

 

PetroVietnam Power, another subsidiary, will operate the plant.

 

"PTSC's strong technical capabilities and their leadership in oil and gas combined with Black & Veatch's design and implementation knowledge is an example of how international partnerships can deliver innovative, quality solutions to meet Vietnam's growing power needs”, Gary Morrow, the US firm's senior vice president and director of power generation services, said.

 

Long Phu will be a coal-fueled facility and use the highly efficient super-critical technology.

 

Northern bourse tenders $146.3 mln G-bonds

 

Hanoi Stock Exchange (HNX) Friday holds the tender session for VND3 trillion ($146.3 million) G-bonds issued by the Bank of Social Policies.

 

These bonds, having three different terms of two years, three years and five years, will be officially issued next Tuesday (May 31, 2011) and sold at face value.

 

There will be VND1.3 trillion G-bonds with two-year terms, VND1.2 trillion G-bonds with three-year term and the rest VND5 billion G-bonds of five-year terms.

 

The coupon will be paid periodically every on fixed date similar to the date of issue, while the principal to be paid once at due date.

 

The applied bidding method is the combination of competitive and non-competitive coupon bidding.

 

Vietnam's inflation likely to touch 20pct: HSBC

 

Since the factors that cause inflation still remain tense, Vietnam's inflation may touch 20 percent in coming months, according to a recent HSBC report.

 

Vietnam's inflation In May continued to surge strongly and nearly touch the highest level in 2008.

 

In May, the country's inflation soared 19.8 percent from the same period last year, from 17.5 percent in April 2011 and thus the country's inflation increased for nine consecutive months.

 

If regarding the seasonal factor, in comparison with April 2011, the country's CPI surged 2.1 percent in May from the rise of 3 percent in April 2011.

 

The inflation on food price increased for 12 straight months, till May 2011, it increased 28.3 percent from the same period last year from 24.4 percent of April 2011.

 

If adjusting according to the seasonal factor, the food price in May 2011 increased 3 percent month on month after surging 3.8 percent in April 2011.

 

Currently, Vietnam's inflation issue still remains very tense. It has been about three months since Vietnamese government decided to switch from economic growth policy to inflation curb and carry out strictly tightening monetary policies.

 

The prices of all commodities in Vietnam increase, especially food and energy items. Although the country's CPI in May slowed down, it still stands at high level.

 

Thus, Vietnam's inflation has not been curbed and may exceed 20 percent in the coming months. HSBC forecasts there will be further tightening moves.

 

Although lawmakers tightened the policies and made many adjustments for some interest rate in 2011, some monitoring measures in the next months are still needed because the fight against inflation is hard to be able to finish soon.

 

Incham hosts seminar on Vietnam’s economic outlook

 

The Indian Business Chamber in Vietnam (Incham) today host a seminar in HCMC to provide an insightful perspective on Vietnam’s overall economic outlook, major challenges facing the economy, and action that must be initiated for this year and beyond.

 

The event, themed Vietnam Economic Outlook 2011,is chaired by an elite speaker panel constituting experts from various sectors of the economy.

 

It includes guest speakers from VinaCapital Group for investment and asset management, Viet Capital Securities for Securities Trading, World Bank Group’s International Finance Corp for corporate finance, CB Richard Ellis Vietnam for Real Estate and HSBC / Standard Chartered Bank for banking.

 

It is a regular event organized by Incham in the southern economic hub of Vietnam.

 

UN recognises Vietnam’s productive expansion

 

The UN Economic and Social Commission for Asia and the Pacific (ESCAP) has recognized Vietnam ’s successful expansion of productive capacity as going beyond global average levels.

 

ESCAP said at an annual meeting in Bangkok, Thailand, from May 19-25, that Vietnam was one of the four regional countries most successful in diversifying export-oriented products and expanding market share for a number of products during the past two decades.

 

It also lauded recent measures taken by the Vietnamese Government in ensuring social welfare, which was of great concern at the meeting in the post-crisis period.

 

Representatives from 62 ESCAP members shared a view that although regional developing economies had managed to keep the growth rate at 8.8 percent on average in 2010 – and an expected 7.3 percent this year – they were still facing numerous challenges such as high inflation and stagnant production.

 

Consequently, social welfare had become an issue of great concern for the region, not only to ensure a reasonable life for people, especially the poor, but also to boost the labour force in the interest of socio-economic development, the meeting was told.

The meeting passed a number of initiatives on ESCAP priorities, ranging from stronger assistance for less developed economies, to the harmony of the environment and development, energy, and closer coordination of action between ESCAP and other international and regional organisations.

 

In this regard, the Vietnamese head delegate Le Hoai Trung, who is Deputy Foreign Minister, called on ESCAP to strengthen cooperation with the Mekong River Commission and other regional organisations, after reiterating the national policy for further reforms in all fields and stronger global integration.

 

Mapletree to launch new property fund in Vietnam

 

Singaporean real estate firm Mapletree Investments is planning to launch three property funds worth $2 billion to invest in commercial and mixed-use properties in Vietnam, Japan and China over the next few years, newswire channelnewsasia.com reported.

 

Mapletree, the real estate arm of Temasek Holdings, hopes to attract institutional investors into its three new Asian property funds. The firm said that investors are looking at annual internal rate of returns of between 12 and 22 percent from these funds.

 

Mapletree will use US$300 million-$500 million for the Vietnam Fund, which focuses on mixed retail, office and serviced apartment projects in major Vietnamese cities. It is expected to be launched in 2013.

 

Mapletree Investments counts a retail and serviced apartment property in Hanoi and an upcoming retail and serviced apartment project in Ho Chi Minh City. It is targeting an annual rate of return of 22 percent.

 

A similar amount will be used for the Japan Fund to buy more office properties in the outskirts of Tokyo city centre as well as Osaka and Nagoya.

 

Three of such properties are already present in the fund as seed assets. The firm is targeting a 12 percent rate of return from the fund and it is expected to launch this year.

 

Mapletree will also use US$500 million to US$1 billion for its new China fund. The fund's assets will be in first and second tier Chinese cities. The fund will acquire mixed developments with residential components in China.

 

It has also announced a 90 percent increase in its profit after tax to S$747 million for the full year ended March 31, driven by higher rental contributions from its assets.

 

As of 31 March 2011, the total real estate assets owned and managed by Mapletree reached S$15.4 billion, up 19 percent from S$12.9 billion a year ago.

 

Seven new imports face price controls

 

The Customs Department will add seven imported items to its price risk control list from June.

 

Document 2334/TCHQ-TXNK adds frozen meat, frozen and fresh fish, fresh fruit, bricks, sanitary equipment, electric appliances and electric bikes to the list.

 

The document also adjusts the price of cars under 16 seats, trucks and motorbikes, which are under price risk control in Document 348/TCHQ-TXNK issued earlier this year.

 

Citibank to finance electrical lines

 

Citibank Viet Nam has arranged a US$200 million loan to build four electricity transmission lines to industrial zones in HCM City and neighbouring provinces.

 

The 13-year loan to the National Power Transmission Corporation, through two Japanese banks, will also help diversify the corporation's funding sources away from traditional commercial loans and official development assistance.

 

Oil giant sets up new insurance units

 

PetroVietnam Insurance JS Corp (PVI) is to set up two subsidiaries: PVI Insurance and PVI Reinsurance.

 

PVI Insurance will have a charter capital of VND800 billion (US$37.2 million) and operate in non-life insurance. PVI Reinsurance will have a charter capital of VND460 billion ($21.4 million) to specialise in receiving and ceding reinsurance.

 

PVI will also make 50 per cent capital contribution to establish Petroleum Hospital JSC, which will had a total registered capital of VND50 billion ($2.3 million).

 

CFO summit to be held in Ha Noi

 

The Viet Nam CFO Summit 2011 will be held in Ha Noi in June 10 in order to provide an overview of capital raising and management strategies amongst large and fast-growing enterprises.

 

The summit, organised by the VietnamNet news website and the Viet Nam Report, will take place as part of the annual activities of senior executives from leading Vietnamese enterprises.

 

Chief executive officers and chief financial officers from Vietnamese enterprises will gather with financial experts from leading domestic and international institutions to discuss solutions to optimise capital restructuring and capital mobilisation efficiency during the summit.

 

PetroVietnam Insurance sells stake

 

The PetroVietnam Insurance Company (PVI) conducted a private sale of share to its foreign strategic partner, the Oman Investment Fund.

 

Share prices are expected to be no lower than the book value of December 31, 2010 (around VND22,000 a piece).

 

Selling its shares will help PetroVietnam Insurance raise its charter capital to VND1.8 trillion (US$85.7 million) during the 2011-12 period. Singaporean Rothschild Ltd and Horizon Capital Advisers will be the sole consultants advising the insurer on extending its charter capital.

 

PetroVietnam Insurance has targeted a premium of VND1.5 trillion ($71.4 million) and a pre-tax of VND109.8 billion during the second quarter.

 

Koreans to invest in coffee firm

 

Listed coffee producer Thai Hoa Corp (TVH) will conduct a shareholders' meeting today in order to discuss plans to raise its charter capital from VND550 billion (US$26.2 million) to VND1 trillion during 2011, a 5-per-cent dividend payment, and an extra share issue of 2:1.

 

The corporation has scheduled an auction of 12 million of its shares currently listed on the Ha Noi Stock Exchange at VND10,000 a piece.

 

The corporation's chairman, Nguyen Van An, revealed that two Korean companies had promised to buy all VND1.5 trillion worth of convertible bonds it had planned to issue during the 2011-12 period at a price no lower than VND110,000 per note.

 

Habubank plans bond issue

 

Habubank (HBB) has applied to the State Securities Commission to issue 9.6 million convertible bonds in order to raise capital. The 1-year note will have a face value of VND100,000. Issuing bonds is part of the bank's target to increase its charter capital to VND5 trillion (US$238.1 million) by 2012.

 

In related news, bank subsidiary Habubank Securities brought core securities software into operation yesterday. The software, in collaboration with Transaction Technologies Limited, will allow brokerage to develop automatic money advance service and other products to support investors.

 

Infrastructure deficiencies remain a hurdle to domestic development

 

Improving physical infrastructure, governance and financial regulations remain key areas of concern at the mid-term Viet Nam Business Forum (VBF) entitled "Beyond 2011 - Viet Nam's Longterm Ambitions" held in Ha Noi yesterday.

 

While acknowledging certain improvements and Viet Nam's potential for growth, foreign business members have grown increasingly cautious and uncertain as to future economic policies.

 

"Today we note that there are still crippling deficiencies and delays in the development of key infrastructure projects," National Chairman of the American Chamber of Commerce (AmCham) Christopher Twomey said.

 

The state of Viet Nam's physical infrastructure and its negative impact on investment in the export and manufacturing sectors has been mentioned at previous VBFs, ahead of the meeting of the Consultative Group (CG), a platform for discussion between the Government and donor agencies on development policies and donor pledges.

 

"Reliable energy supply remains an area of concern for foreign investors that have experienced severe power cuts throughout the last months," Alain Cany, Chairman of the European Chamber of Commerce in Viet Nam, said.

 

On average, electricity outage hours for each firm nearly doubled from 50 hours in 2009 to 89 hours in 2010, Alain confirmed.

 

Although the consumption of electricity is projected at 12 per cent minimum per annum, power plant capacity is unable to keep up, which has resulted in a shortfall in power supply.

 

The VBF believed that a reduction in the Electricity of Viet Nam (EVN)'s dominance in the sector was needed in order to solve out-of-market retail price issues. The group additionally called for the effective implementation of laws on renewable energy sources.

 

The VBF additionally expressed strong concerns regarding the development of roads, small and scattered ports and related land-side infrastructure projects necessary to ensure the timely and efficient movement of cargo.

 

"A significant increase in passenger and freight traffic in and around HCM City and the poor connectivity of the Hai Phong Port has fuelled this concern," said Tony Foster, head of infrastructure working group.

 

Responding to these concerns, a representative from the Ministry of Industry and Trade calmed investor fears, saying that enterprises would not have to worry about electricity supply this year because of favourable weather conditions and the implementation of competitive price mechanisms from July 1. The Son La Hydro-electricity plant is set to be supported by new generators in order to keep it operational at all times.

 

With three power plants, including Mong Duong, Hai Duong and Phu My (with a combined capacity of 3,600MW), future electricity supplies in Viet Nam are set to look good.

 

An official from the Ministry of Transport stated that work was in progress on enabling the ports of Hai Phong - Quang Ninh and Van Phong - Dung Quat to handle 100,000 tonne vessels and over.

 

"Over the next five to 10 years, Viet Nam will have a better port system for transport," the official said.

 

The VBF yesterday stressed its concerns regarding stagnated investment licensing, transparent governance and financial regulations during 2010.

 

AmCham said that this year's Provincial Competitiveness Index (PCI) revealed that 70 per cent of companies that regularly ship goods feel that they must pay bribes in order to expedite customs procedures.

 

The Singapore Business Group agreed that customs clearance remained a challenging experience, with unofficial payments to compel customs officers to perform their duties or else risk delays in the formalities of clearing and releasing goods.

 

EuroCham member companies reported their experience of long approval times and numerous delays in business registration and investment licensing, especially in HCM City and Ha Noi.

 

Banking and capital market working groups urged the State Bank of Viet Nam and the Ministry of Finance to use the current economic environment as a stimulus to move ahead with tough structural reforms.

 

Dominic Scriven, head of capital markets working groups, suggested that the ministry and the State Securities Commission establish a legal framework for credit rating agencies, facilities for repo activities, derivative instruments while adjusting requirements for account opening by foreign entities.

 

VBF's banking working group suggested the central bank draft a forward-looking roadmap rather than implement administrative restrictions in order to reduce the cost of delivering banking products and services and to clear major impediments for consumer banking and consumer finance industries.

 

The Minister of Planning and Investment, Vo Hong Phuc, welcomed investor feedback and committed to considering suggestions at the forum.