VN ups forex reserve ratio, forces forex sales

 

Vietnam's central bank said on Wednesday it had raised the compulsory reserves banks must set aside for foreign currency deposits and it was forcing state-owned companies to sell their currency holdings to banks from July.

 

The moves will buttress efforts by the authorities to support the dong, although the Vietnamese currency has been more stable in recent weeks after a devaluation in February.

 

The State Bank of Vietnam raised the reserve ratio on non-term foreign currency deposits and on those with terms of up to 12 months to 7 percent from 6 percent, it said in a statement.

 

The rate for compulsory reserves on foreign currency deposits with terms longer than 12 months was raised to 5 percent from 4 percent, and the ruling came into effect for deposits from June, it said.

 

The U.S. dollar dominates banks' foreign exchange deposits but the higher reserve requirement may discourage them to some extent.

 

In a separate statement, the central bank said Vietnamese state-run companies will have to sell the foreign exchange from their deposit accounts and any other legitimate income to banks from July.

 

The currency in corporate term and non-term deposits as well as that arriving from July 1 will have to be sold to banks, the State Bank of Vietnam said in a statement on its website (www.sbv.gov.vn).

 

The move was aimed at preventing state owned companies from hoarding foreign currencies, especially during a "difficult" situation, a senior central bank official who declined to be named told Reuters.

 

"Currently, the dong is appreciating so companies are still selling dollars without this circular. But it aims to apply when the foreign currency market is in difficulty and the companies have an interest in holding dollars for higher rates," he said.

 

"This circular doesn't mean to make things tough for state companies, but it's the first step to prevent them from hoarding and manipulating foreign currencies," he said, indicating there could be further moves to stop such hoarding by companies.

 

UK-owned consulting firm honored

 

Grant Thornton Vietnam Co has been honored with the Certificate of Merit from the Prime Minister of Vietnam and the Ministry of Finance (MoF) for its contribution to the development and progress of the auditing profession in Vietnam in 2006-2010.

 

The UK-owned company is among 3 auditing firms and 12 other individuals awarded with the prestigious award, according to Decision No 656 /QD- TTg signed by Nguyen Tan Dung, Prime Minister of Vietnam.

 

Its senior audit partner, Nguyen Thi Vinh Ha, is one of the 12 individuals to be recognized.

 

These awards have also been presented at the 20th Anniversary Ceremony of the independent auditing profession in Vietnam jointly organized by Vietnam Association of Certified Public Accountants (VACPA) and the MOF in Hanoi.

 

Grant Thornton Vietnam is a member firm within Grant Thornton International Ltd which was established in 1993 with offices in Ho Chi Minh City and Hanoi and has enjoyed growth and success since its establishment.

 

It have comprising six partners and around 140 professional staff providing quality services in assurance, consulting and development services, corporate finance and tax services, designed to help clients in various industries achieve their business objectives.

 

Electricity prices will not rise in June

 

The Electricity of Vietnam Group (EVN) said it would not increase electricity prices in June, despite taking losses.

 

“The group has suffered losses, but we cannot increase power prices as the country’s economic conditions remain difficult,” EVN deputy general director Dinh Quang Tri told VnExpress.

 

Meanwhile, the Electricity Moderation Department under the Ministry of Industry and Trade said it would soon finish a fact sheet outlining the implementation of Decision 24 by the prime minister about the adjustment of power prices based on market conditions from June 1.

 

Under the Decision, if market changes cause electricity production costs to increase by 5 percent, EVN will raise power prices at the same rate, subject to approval from the Ministry of Industry and Trade.

 

Within five business days, the Finance Ministry will give its feedback to the Ministry of Industry and Trade, which will then perfect the plan and submit it to the prime minister.

 

Within 15 days of receiving the plan, if the prime minister has no opinion about it, EVN has the right to increase electricity prices by 5 percent.

 

The average price of power has increased by 15.28 percent since March 1, but both the ministries of Finance, and Industry and Trade said the rate was too low and the electricity sector still suffers losses.

 

VietinBank to sell 15 pct to Canadian bank

 

Vietnam Commercial Bank for Industry and Trade, or Vietinbank, will complete the sale of 15 percent stake to Canada’s Bank of Nova Scotia in the second half of this year, it said Tuesday.

 

Pham Huy Hung, chairman of VietinBank, said procedures will be completed in the third quarter, and Bank of Nova Scotia will become VietinBank’s strategic shareholder by the end of this year.

 

The stake transfer is part of a plan to raise the bank’s registered capital by 41 percent to VND23.8 trillion this year.

 

In October, the International Finance Corp bought 10 percent of VietinBank for $177 million.

 

Hanoi-based bank set VND5.1 trillion ($255 million) in pre-tax profits, rising 11 percent from earlier this year.

 

Singapore’s CapitaLand buys into Vietnam firm

 

CapitaValue Homes Limited, a subsidiary of the Singapore-based CapitaLand Group focusing on building value homes in Asia, has acquired 65 percent of Quoc Cuong Sai Gon Company for VND121.2 billion (US$5.8 million).

 

The Ho Chi Minh City-based QCSG has a 9,000-square meter piece of land in the city’s Binh Chanh District and a license to develop the land.

 

QCSG intends to build 800 value-for-money homes with investment mainly by CapitaValue Homes.

 

The VND906-billion ($45.3 million) development, CapitaLand’s third in the value category and seventh overall in Vietnam.

 

It will take the total number of value homes in Asia for the Singapore housing company to 4,200.

 

CapitaLand has built more than 6,400 houses across seven residential developments in Ho Chi Minh City and Hanoi.

 

$4-bln export target hard, wood industry concedes

 

Vietnam is unlikely to meet the wood-products export target of US$4 billion this year due to high production costs and a timber shortage, the Vietnam Timber and Forest Product Association (Vietfores) said.

 

Exporters can only source 20 percent of their wood needs domestically. Meanwhile, Laos and Cambodia are running out of timber while prices of timber from Africa, South America, and Malaysia are rising rapidly.

 

Higher fuel and machinery costs are hitting transportation and production costs for the wood industry.

 

In addition, tougher quality and origin conditions imposed by the two biggest buyers, the US and Europe, are also having an impact, Vietfores said.

 

Vietfores had set an export target of $4 billion for 2011, up 30 percent from last year.

So far exports have been worth $1.5 billion.

 

Vietnam to raise iron ore export duty in July: govt

 

Vietnam will raise the export duty on iron ore to 40 percent in early July from 30 percent now to ensure raw material for its domestic steel industry, the government said last Wednesday.

 

The new rate will come into effect on July 2 following a Finance Ministry circular, the government said in a statement.

 

"The export of iron ore in recent years has led many domestic steel manufacturing enterprises to face shortages of the raw material and forced them to import," the government statement said.

 

The Vietnam Steel Association and several domestic steel producers had sought a government ban on the export of processed iron ore, the statement said.

 

Much of Vietnam's exports of raw minerals such as iron ore go to China.

 

Vietnam had to spend $6.16 billion last year to import steel and steel products, a rise of 15 percent from 2009, government statistics show.

 

Between January and May this year, the cost of importing the products rose an estimated 15.6 percent from a year earlier to $2.6 billion, the government said last Wednesday.

 

Cooking gas prices down slightly

 

Retail prices of cooking gas in Vietnam will be down by VND15-19,000(US$0.75-0.95) per 12kg cylinder as of today, driven by a downturn in the global market.

 

Many local gas distributors, such Saigon Petro and Petrolimex, Tuesday announced the price reduction after Saudi Arabian Oil Company announced a fall of $80 per ton of gas for June delivery.

 

It means that the contract gas price reduces from $970 to $ 890 per ton. The drop in local gas prices is, however, modest compared with strong fall in the global market.

 

Last month, all local retailers increased their gas prices by VND30,000 to VND385,000 per 12kg cylinder, hitting a record high in Vietnam.

 

FDI pledges, disbursement plunge in May

 

Foreign direct investment (FDI) plunged in May, with actual disbursement by falling 80 percent and new commitments by 25 percent, the Foreign Investment Agency said.

 

They were down respectively to $900 million and $322 million. The country also allowed an infusion of $343 million in 11 existing ones, a year-on-year rise of 50 percent in value but decrease 53 percent in the number of projects.

 

Disbursement slowed down for a 3rd month in a row since topping $1.4 billion in March while commitments have fallen every month this year.

 

May’s figure takes extended this year’s disbursement figure to $4.52 billion and commitment to $4.7 billion, down 76.5 percent year on year.

 

The FDI data is preliminary, compiled by the agency on the 24th of each month.

 

Vietnam expects disbursements of between $11 billion and $11.5 billion this year, unchanged or slightly higher than in 2010, while new pledges are expected to rise 16 percent to $20 billion, the government had said last December.

 

Despite the country's gloomy FDI picture, inflows into Ho Chi Minh City still increased by 67.5 per cent to $1.52 billion in the first five months, the city Department of Planning and Investment said.

 

It licensed 123 new projects worth $1.33 billion, a 61 per cent rise year on year.

 

It also approved capital addition worth $193 million for 42 projects, a 126 percent jump.

 

Singaporeans buy 65% stake in HCMC firm

 

Joint-stock property development company Quoc Cuong Sai Gon has sold a 65 per cent stake to CapitaValue Homes Limited, Singapore-based CapitaLand Group's strategic business unit that focuses on building value homes in Asia.

 

CapitaValue Homes' wholly-owned subsidiary CVH Sparkle Pte Ltd bought the stakes for VND121.2 billion (US$6 million).

 

The deal values QCSG at VND186.5 billion as of 30 May, according to Chen Lian Pang, CEO of CapitaValue Homes.

 

The remaining stake in QCSG is held by the HCM Stock Exchange-listed Quoc Cuong Gia Lai JSC (30 per cent) and Gach Do Co Ltd (5 per cent).

 

QCSG owns around 9,000sq.m of land in HCM City's Binh Chanh District, and has already received the green light from the Department of Planning and Investment to develop it.

 

QCSG intends to build around 800 value-for-money houses and CapitaValue Homes will lead the development.

 

The project is estimated to cost VND906 billion (US$4.4 million).

 

It will be CapitaLand's third value-home and seventh residential development in Viet Nam. Overall in this country, CapitaLand has a residential portfolio of more than 6,400 units in HCM City and Ha Noi.

 

Australia promotes food and wine in Vietnam

 

Six wine exporters and three food producers will visit Vietnam to promote their products at a trade show slated to start this Friday.

 

The two-day Food and Wine Show 2011 is expected to bring opportunities for local importers of Australian wine and food and Australian exporters to meet and build business links.

 

The event at the Caravelle Hotel in downtown HCMC provides an opportunity for both commercial buyers and the public to sample a broad range of Australian produce, including 200 Australian wine labels, mostly available in Vietnam’s market.

 

Australian food products, such as seafood, truffle and chocolate, will be also be served with wines from the country and introduced to Vietnamese visitors at the annual event that debuted in 2008.

 

Jim Cawood, the event co-coordinator, told local media at a news conference on Monday that Australian wine exports to Vietnam had been increasing in the past few years, with about 300 Australian different wine labels already making their way to Vietnam. However, France and Italy are still the biggest wine exporters to Vietnam.

 

Rice companies need certificates to export

 

Rice exporters would need certificates from the Ministry of Industry and Trade (MoIT) in order to export as of October 1 this year, according to the Viet Nam Food Association (Vietfood).

 

Currently, any business is allowed to export rice without having to adhere to industry regulations.

 

Vietfood Chairman Truong Thanh Phong said that his association had asked rice exporters, who met MoIT storage and husking requirements (regulated by Decree ND109/2010/ND-CP issued in November last year), to register early in order to meet the MoIT deadline.

 

Under Decree ND109/2010/ND-CP, rice exporters are required to have a storage capacity of at least 5,000 tonnes and husking facilities with an output of at least 10 tonnes per hour.

 

Storage and husking facilities have to be located in cities and provinces home to rice granaries or international ports to serve rice exports.

 

According to the Ministry of Agriculture and Rural Development (MARD), the country exported 3.5 million tonnes of rice, worth US$1.7 billion, during the first five months of the year, a decrease of 18.6 per cent and 13.3 per cent in terms of volume and value compared to the same period last year.

 

In the first five months of 2011, Indonesia, followed by Cuba, Malaysia and Hong Kong, remained Viet Nam's largest rice importer, accounting for 25.5 per cent of total rice export volume.

 

Domestic rice exporters currently face tough challenges in trading in the South Korean and Japanese markets.

 

The Vietnamese Commercial Counselor for South Korea, Le An Hai, said that, although South Korea planned to import 347,658 tonnes of rice this year, Vietnamese rice exporters had to gain experience in exporting rice through electronic auction in order to win South Korean contracts.

 

The Deputy General Director of the Southern Food Corp, Cao Thi Ngoc Hoa, admitted that local exporters were still unfamiliar with electronic auctions.

 

Although Japan had planned to import 250,000 tonnes of rice from Viet Nam, local rice exporters struggled to win Japanese orders because of poor market research and knowledge regarding modern market trading methods, said Ho Xuan Hung, MARD deputy minister.

 

Due to the challenges local exporters are currently facing, Vietfood forecast that the country's rice exports would decrease to 6.5 million tonnes this year compared to 6.88 million tonnes last year.

 

Jan-May mobilization in HCM city falls 1.75%

 

Mobilized funds among credit institutions in HCMC as of end-May have shrunk 1.75% from end-2010 to VND792.2 trillion, the central bank’s HCMC Branch said in a report.

 

In May alone, however, mobilization at the city’s credit institutions has increased by a mere 0.3% month-on-month, lower than the 0.5% growth in April. Mobilization in Vietnam dong by late May has fallen by 7.2% from late last year while mobilization in the U.S. dollar has increased 14.6%.

 

The figures show mobilization in Vietnam dong has been so difficult, making interest rate cuts impossible in the near future.

 

The central bank’s HCMC Branch explained that although mobilization from the public had increased, deposits of institutions had declined as they tried to make use of all their own capital for business given high lending rates.

 

While mobilization is down from late 2010, outstanding loans have increased by 5.62% from late last year to VND748.9 trillion. In May alone, the credit growth of credit institutions in HCMC was 1% compared to only 0.3% in April.

 

Credit growth in both Vietnam dong and the dollar has increased with outstanding loans in dong rising by 2.4% from late last year, while the credit growth in dollars has increased by 14.3%. There has been a strong rise in dollar loans in May as at the end of April they had grown only 8.44% from late 2010.

 

The deputy general director of a joint-stock bank said that almost all exporters chose to borrow money in U.S. dollars to enjoy low lending rates, at about 5.5% to 7% per year while the lending rate in dong now is 20%-21% per year.

 

Meanwhile, importers also prefer loans in dollar and they tend to use forward contracts on the U.S. dollar to ensure the dollar amount in the future as a condition to borrow dollars at banks, he said.

 

Many banks like the Vietnam International Bank and ANZ have tried to introduce this  product to corporate clients, especially importers.

 

Two steel projects face the axe due to others’ mistake

 

The Ministry of Industry and Trade has just told the southern province of Ba Ria – Vung Tau to revoke the licenses of two large steel projects in Phu My 1 Industrial Park as they have been wrongly approved by provincial authorities.

 

The two projects, one by Fuco that has been 90% completed and the other by Thep Viet Corporation that is still in the preparatory phase, are among numerous steel projects that have been rampantly licensed nationwide beyond central supervision. Therefore, it could be easily seen that the licensing agency is to blame if these two projects were canceled out.

 

Bui Quang Chuyen, deputy director of the ministry’s Heavy Industry Department, told the Daily on Monday that both projects had been licensed by the provincial industry zones authority, but they were not listed in the country’s master plan for steel industry development.

 

The steel project of Fuco Company has total investment capital of some US$180 million to produce construction steel and steel ingots, while the steel project of Thep Viet Corporation is designed to produce 1.2 million tons each year.

 

Pham My Trang, an official of Ba Ria-Vung Tau Industry Zone Authority, admitted that after recent checks, the authority found five steel projects outside the national master plan for the steel industry.

 

Trang told the Daily on Monday that after considering the capacity of investors, the province has proposed to supplement three out of these five steel projects into the national steel plan, except the two projects of Fuco and Thep Viet.

 

However, she said, the province has still had no final decision for revoking these two projects after the requirement from the ministry.

 

To ensure harmonious development of the steel industry, Chuyen of the ministry said that in the coming time, the ministry would ask provincial governments around the country to carefully appraise steel projects before granting investment certificates.

 

“The ministry will also require the provinces to axe more steel projects outside the national master plan for steel development in the coming time,” he said.

 

Nguyen Tien Nghi, vice chairman of the Vietnam Steel Association, told the Daily that since 2009, related ministries and provinces around the country had sorted out 33 steel projects that were not listed in the country’s steel development plan.

 

Nghi said the number of steel projects outside the master plan could have increased more by this time. “However, I can see that few of these projects have been revoked by the moment,” he said.

 

According to the association, the steel industry would witness an extreme redundancy of steel output by this year’s due to the operation of five more large steel projects between now and the end of this year.

 

At the moment, the total output of construction steel in the country is nearly nine million tons a year, while the consumption is only about 6.3 million tons, leaving the surplus of nearly three million tons.

 

While the steel output in the country is redundant, the association’s vice chairman said domestic trading companies continued importing a large amount of steel products into the country in the first five months of the year.

 

In the first five months, the country imported over two million tons of steel of all kinds. The imported steel amount included 155,000 tons of construction steel, 1.4 million tons of steel sheets, 130,000 tons of steel plates and other products.

 

ACDL signs agreement for resort development in Vung Tau

 

Canadian firm Asian Coast Development Ltd. (ACDL) last week signed an agreement with Pinnacle Entertainment Inc. to jointly manage and develop its integrated resort Ho Tram Strip project which is underway in Ba Ria-Vung Tau Province.

 

The deal allows Pinnacle to acquire a 26% equity interest in ACDL in exchange for a US$95 million investment.  In addition, Pinnacle has entered into a management contract for the second integrated resort of the multi-phase Ho Tram Strip destination resorts project, which is located some 127 kilometers southeast of HCMC.

 

Developed by ACDL, the first resort of the Ho Tram Strip, MGM Grand Ho Tram, is currently under construction and will be managed by MGM Hospitality, a subsidiary of MGM Resorts International.

 

The first phase will feature 541 luxury guest rooms and suites, a full spectrum of world-class restaurants and amenities, a conference center, and a spectacular entertainment area featuring expansive gambling facilities for foreigners.

 

“This transaction is another major milestone for ACDL and accelerates the development of our second resort and the entire Ho Tram site. Importantly, it builds critical mass at Ho Tram, brings a second highly respected operator into close partnership with ACDL, and enhances our plans for further growth and expansion,” Lloyd Nathan, chief executive officer of ACDL, said.

 

The second phase of the Ho Tram Strip will be jointly developed by ACDL and Pinnacle and managed by Pinnacle.

 

The developer says the integrated resort and gaming complex Ho Tram Strip is scheduled to open in multiple phases, beginning in 2013.

 

Good governance helps attract investment: expert

 

Good corporate governance is a good way to improve a company’s performance and to attract more investment from overseas investors, but this issue has not been adequately attended to in Vietnam, said an expert at a seminar held in HCMC on Thursday.

 

Vietnamese companies with good governance would be better positioned to attract external financing and increase profitability, said David Gerald, President and CEO of the Singapore Securities Investors Association, at the seminar “Corporate Governance – The Way to Create Company Value.”

 

Gerald explained that investors are willing to pay more for the shares of well-governed companies, and are taking the initiative to evaluate the presence or absence of corporate governance safeguards, as well as corporate cultures, at the companies in which they invest.

 

“A study shows that best-governed companies have returns on investment and equity better than those of poorly-governed companies,” he told the seminar organized by Kim Eng Vietnam Security Stock Company and the HCMC Stock Exchange.

 

According to Gerald, in Asian countries, companies are mostly formed by the family where corporate governance is lacking for they just care about the profit of their own.

 

“But when they move out into the market, they have to improve their governance to meet the global and local standards,” he said.

 

He explained that good corporate governance provides a climate conductive to the orderly development of the capital markets and meet the increasing expectation of investors.

 

Gerald highlighted Singapore as the number one in corporate governance because it attracted more overseas investment than the second one, Hong Kong, for “investors know that they will be accountable.”

 

In 2010, the International Finance Corporation launched a Corporate Governance Scorecard for Vietnam, reviewing the corporate governance practices by exploring compliance with laws and regulations of the best 100 largest companies listed on the Hanoi and HCMC stock exchanges. The result showed that 80 of them were found below average.

 

Vietinbank provides electronic tolling on Highway 51

 

Vietnam Commercial Bank for Industry and Trade (VietinBank) on Tuesday signed a deal with Bien Hoa-Vung Tau Expressway Development Joint Stock Co. (BVEC) to apply electronic toll collection on the National Highway 51.

 

The model will be applied at T1 and T3 stations on the road. Cars are required to attach an on-board-unit (OBU), an account at VietinBank to use the service, for which tolls will be automatically deducted when cars go through the stations.

 

VietinBank general deputy director Pham Anh Tuan said this is the third automatic toll station of the bank in the southern region, which can help drivers save time, fuel and reduce traffic congestion during rush hours. Vietinbank has plans to expand the service throughout the nation in the future.

 

The bank has earlier begun electronic tolling at Phu My and Can Tho bridges.

 

BVEC is the investor of the project upgrading the highway on the total length of 72.7 kilometers. The VND3.3-trillion project is being implemented under BOT (build, operate, transfer) form.

 

The investor will recoup capital for the project with the T1 and T3 toll stations in Dong Nai and Ba Ria-Vung Tau provinces. The road is expected to be completed in 2012.

 

C.T Group introduces hi-end apartments

 

C.T Phuong Nam Joint Stock Co., a member of the HCMC-based C.T Group, on Saturday launched the second sales campaign of hi-end apartments of the multi-purpose C.T Plaza Nguyen Dinh Chieu building project under progress in the city’s District 3.

 

The company will sell 28 hi-end apartment units from 72 to 118 square meters at floors 19 and 20 for US$4,600 per square meter.

 

Earlier, customers at the groundbreaking ceremony in early March registered to buy all of the 28 units at floors 17 and 18 for US$4,600 per square meter, according to the company. There are in total 200 units on floors 17 to 24.

 

The VND1.8-trillion project at 117 Nguyen Dinh Chieu Street covering 50,000 square meters will include three basements and 24 floors for a luxury commercial area, hi-end apartments and a five-star-hotel. The project will be completed in early 2013.

 

C.T Group, a privately held fashion and cosmetics brands distributor and property developer, said the new project would be a state-of-the-art structure in the city.

 

Established in 1992, C.T Group has 36 members active in real estate, financial investment, high-end retail, cuisine, entertainment, education, healthcare, construction, natural resources, tourism, and import-export, among others.

 

Vincom markets mammoth property project in Hanoi

 

Sai Dong Urban Development and Investment JSC, an affiliate of Vincom Corporation, on Tuesday started marketing its Vincom Village multipurpose project underway in Long Bien District in the capital city of Hanoi.

 

The developer says some VND10,000 billion, or nearly US$500 million, will be set aside to develop the project on 183,5 hectares including 60 hectares of water surface east of Hanoi, some 6.5 km from Ho Guom (Sword Lake).

 

The project is envisioned including a 38-hectare section for French-style villas, a section for Grade A office buildings and high-end apartments, and a commercial services section named Vincom Center Long Bien.

 

Besides a sport center and an outdoor food court, an international hospital, two schools and a kindergarten will be built to serve the project’s future communities.

 

Mai Huong Noi, general director of Vincom Corporation, says the company wants to set a record in the project development speed. The project got off the ground on May 12 this year.

 

As planned, villas will be handed over to buyers from September and the shopping center, Vincom Center Long Bien, will be opened by December 24 this year. The second phase with the remaining facilities will be finished by 2013.

 

In related residential market news in the region, the property services provider Savills Vietnam said that prices of villas and townhouses in the capital city continued to increase in the first quarter of this year, 20% for villas and 15% for townhouses.

 

Average secondary asking prices recorded in Tu Liem, Cau Giay and Tay Ho districts were around US$6,400 per square meter. For districts far from the central business quarter such as Me Linh and Quoc Oai had the lowest price from US$800 to US$1,200 per square meter.

 

According Savills, 103 projects across 14 districts provide the market some 34,600 villas and townhouses. The demand for the properties is identified among mainly wealthy Vietnamese.

 

In the office building sector, the overall market recorded a slight increase in occupancy performance to 90% in the first quarter of this year. Average rent remained unchanged compared with the previous quarter, at US$26 per square meter.

 

The office market in Hanoi currently has 760,000 square meters, but there will have some 1.2 million square meters of office space to enter the market in the next three years.

 

Meanwhile the retail market saw a slight decrease in the average occupancy rate to 92% in the first quarter. Some retail buildings launched promotions and discounts in order to attract more tenants.

 

The market observer says the total retail space of 440,000 square meters in the market will be increased significantly as 100 projects will supply some 1.2 million square meters in the next four years.

 

KfW to provide 212.75 mln EUR for metro project

 

The German Reconstruction Bank (KfW) plans to provide a second loan worth 212.75 million euro to fund the construction of metro line No 2 in Ho Chi Minh City.

 

Prime Minister Nguyen Tan Dung on June 1 approved the content of the draft loan agreement and entrusted the Ministry of Finance, on behalf of the government, to sign the deal with KfW.

 

On January 3, 2011, the first credit contract worth 28 million euros for the project was inked.

 

The project is divided into two stages, with the first designed to build a 12-km section, which will run through districts 1, 3, 10, Tan Binh, and Tan Phu with 11 stations.

 

Launched on August 24, 2010, the project is scheduled for completion in 2016.

 

Four fields get soft interest rates from ODA

 

Prime Minister Nguyen Tan Dung has endorsed a list of sectors and fields that are enabled to enjoy preferential interest rates when re-borrow ODA capital from the government.

 

Under the decision, signed on June 1, preferential interest rates will be given to the fields of economic, technical and social infrastructure development; industry, finance and credit; and projects benefiting disadvantaged regions.

 

In the area of economic, technical and social infrastructure, projects to build safe water supply systems, education-training and healthcare establishments, railways, highways and deepwater ports, and solid waste and waste water treatment plants will be prioritised to use this source of capital.

 

In regard to the industrial sector, projects to build new and renewable energy plants; rural electrical transmission and distribution networks; information technology and telecoms infrastructure facilities are eligible for the soft interest rates.

 

Credit programmes and components targeting beneficiaries of social policies and providing loans through policy banks will also receive priority as part of the decision.

 

The decision will take effect as from July 20, 2011.