WB promotes partnership with Vietnam

The World Bank (WB) is keen to boost its partnership with Vietnam and pledges to support the country’s development programs.

Vice President of the World Bank for East Asia and the Pacific, Axel van Trotsenburg, made this affirmation at a WB press briefing in Hanoi on May 8 during his working visit to Vietnam from May 9-5.

In his speech, the WB official said he aims to learn more about Vietnam and its people on his visit in order to find better ways to support the restructuring of preferential credit loans.

“Vietnam has been a global leader in reducing poverty over the last two decades, making effective use of concessional official development assistance including from IDA.  We are glad that our partnership with Vietnam has contributed to this success. We’d like to support Vietnam’s efforts to further reduce poverty with special focus on ethnic minorities.” said Trotsenburg.

Trotsenburg praised Vietnam’s impressive achievements in poverty reduction, recording one of the fastest poverty alleviation rates in the world, and appreciated its efforts to utilize ODA funding appropriately, including capital from the WB’s International Development Association (IDA).

He said he hopes his organization will coordinate closely with the Vietnamese Government to disburse IDA capital effectively and pledged his best efforts to make the upcoming 17th IDA negotiations a success.

The WB will continue providing Vietnam with as much financial resources as possible to help it fulfill its socio-economic targets. Both sides need to work hand in hand at the highest levels to disburse the WB capital efficiently.

The WB is also willing to provide policy consultancy for Vietnam, particularly for stabilizing the macroeconomy, maintaining growth, and accessing capital resources.

During his visit, Trotsenburg met with Prime Minister Nguyen Tan Dung, Minister of Planning and Investment Bui Quang Vinh, and State Bank of Vietnam Governor Nguyen Van Binh, as well as Minister of Agriculture and Rural Development Cao Duc Phat and representatives from other ministries and sectors to discuss various development issues in Vietnam and how it can deal with future challenges.

Steel imports top US$2 billion

Viet Nam's steel industry saw imports of more than US$2 billion in the first four months of this year.

An imbalance in the steel industry's development strategy led to an increase in the import of high-value steel, while the domestic supply mostly included popular products, according to the Viet Nam Steel Association (VSA).

Steel export earnings in the past four months were estimated at $500 million.

Second commodity exchange opens

The Ministry of Industry and Trade on Friday issued a licence to the INFO Commodity Exchange owned by Ocean Group.

The INFO exchange, the second of its kind in the country, will trade in steel, rubber, coffee and agricultural goods. It will provide a direct channel between manufacturers and the market to end speculation in the prices of goods. It will regulate commodity standards, link the domestic and international markets, and integrate the Vietnamese goods market globally.

It will help Vietnamese businesses, in particular farmers, boost production and their competitiveness in the global market.

Binh Duong reports good progress in environment

The environmental protection programme for the 2011-2015 period in the southern province of Binh Duong is making good progress and expects to fulfill all targets by 2015, according to the province’s People’s Committee.

By the end of last year, 87 percent of solid wastes were collected and treated, while the figure for solid hospital wastes was 97 percent; 97 percent of urban people have access to hygienic water and for rural people, the rate is 96.2 percent.

Meanwhile, more than 96 percent of industrial zones and industrial clusters in the province have been equipped with standard waste-water treatment systems.

The Chairman of the People’s Committee has requested that inspection be intensified on serious polluters and strict punishment applied. He also instructed that the relocation of polluting production establishments and projects on building waste treatment facilities be accelerated, while encouraging all sectors to invest in environmental protection.

Import tax on used cars to increase

The import tax on used cars of nine seats and more will be increased since June 20, according to the Prime Minister’s Decision 24/2013/QD-TTg.

Accordingly, for cars under 1,000 cc, the tax rate will be 5,000 USD while cars from 1,000 cc to 1,500 cc will be subjected to the tax rate of 10,000 USD.

The current tax rates are 4,200 USD and 9,600 USD, respectively, according to the Ministry of Finance’s Circular 28/2013/TT-BTC which took effect since April 29, 2013.-

Power assured during dry season

Power supply will meet the anticipated surge in demand during the dry season this year, said Dang Huy Cuong, Director of the Electricity Regulatory Authority of Vietnam.

The authority under the Ministry of Industry and Trade was prepared to tackle the falling output at hydropower plants due to prolonged drought in the Central Highlands and southern regions, he said. Gas-fuelled thermal power plants would operate at full capacity until July, which would provide over 4 billion kWh per month, in addition to over 3 billion kWh per month from coal-fueled thermal power plants.

According to Electricity of Vietnam (EVN), hydropower makes up about 40 percent of the country's electricity output. The water shortage at hydropower plants' reservoirs is currently almost 5.3 trillion cubic metres – meaning reduced output of 1.43 billion kWh.

This is critical as the dry season (April-June) is usually a peak time for power consumption.

The EVN calculated that total electricity output across the country during this period would be about 34.35 billion kWh, 11 percent higher than the same period last year.

In emergencies, the company plans to make use of more expensive power generating sources such as oil-fuelled power plants and imported electricity.

The EVN planned to mobilise over 1.1 billion kWh of power from FO or DO oils, which would substantially raise production costs: each kWh generated from oil costs 5,000-6,000 VND, while the current average power price is about 1,400 VND per kWh.

The southern region with major economic hubs such as HCM City, Dong Nai and Binh Duong provinces would face more serious shortages, as no new power plants become operational there this year.

Director Cuong noted that since the beginning of this year, electricity supply has met demand for production and daily consumption.

A representative from EVN Hanoi told Kinh te & Do Thi (Economy and Urban Affairs) newspaper that the recent power cut in the capital was part of scheduled maintenance, rather than due to power shortages as in previous years.

The company does not yet have any plan to cut power this year, according to the representative.

Vietinbank to support SMEs

The Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank) will allocate up to 5,000 billion VND (approximately 23.9 million USD) to help small and medium-sized enterprises (SMEs) through a preferential lending programme titled “Accompany SMEs’ development 2013”.

Under the programme, which started on May 1, SMEs have the opportunity to borrow short-term loans at preferential interest rates which are three-percent lower than the normal annual rate, for a term of up to six months.

Additionally, the bank will create favourable conditions for enterprises to access capital more easily and quickly to meet their production and business demand; as well as give attractive special offers for businesses using Internet Banking services.

Both new and current customers with effective operation, secured finance and meeting the bank’s requirements will be eligible for participating in the programme.

The activity aims to help enterprises overcome difficulties during an unstable period of global economy.

Vietnamese firms to go to int’l ICT exhibitions

Vietnamese businesses will enjoy an opportunity to showcase their products and gain visibility into foreign markets at three international IT exhibitions to be held in Singapore in June.

The CommunicAsia, EnterpriseIT and Broadcast Asia exhibitions will feature a wide array of the latest technology innovations and business updates across the ICT and broadcast industries on June 18-21.

Organised by the Singapore Exhibition Services Pte. Ltd., the event allows business leaders to gain insights into the latest issues and challenges facing the international ICT industry.

Last year's event attracted nearly 2,000 exhibitors and more than 50,000 professional attendees from around the globe.

According to the Vietnam 2012 ICT White Book issued by the Ministry of Information and Communications, the country's ICT sector saw total turnover of 13.7 billion USD in 2011. The figure was a year-on-year increase of 79 percent.

By the end of 2011, mobile phone subscribers reached 127.3 million and internet users 30.5 million.

In 2011, more than 16 million people used 3G mobile networks in Vietnam, accounting for more than 80 percent of all broadband internet users.

NTUC Fair Price to open grand supermarkets in Vietnam

A license to form a trade joint venture in Vietnam between Singaporean retailer NTUC Fair Price and Vietnamese partner Sai Gon Co.op was granted on May 4th.

Under the license, the trade joint venture has $ 6 million as its initial investment capital, of which the Vietnamese partner contributes 64 percent.

The joint venture aims to build two chains of supermarkets named Co.opXtra and Co.opXtraPlus.

According to President of Saigon Co.op, the joint venture is expected to open one or two grand supermarkets in large Vietnamese cities and that the first Co.opXtra Plus will be inaugurated in mid May in Thu Duc district, Ho Chi Minh City.

Observers believed that the two models of supermarkets will be a potential rival, directly competing with famous foreign retailers operating in the domestic market and that the Vietnamese market will see a fierce competition between retailers.

According to CEO of NTUC Fair Price Tan Kian Chew, the joint venture will provide opportunities for local producers as its supermarkets will attract their goods and they will also have opportunity to participate in the company’s global distribution network.

Many projects may switch to PPP format

The Ministry of Transport is considering changing the investment format for several projects from build-operate-transfer (BOT) to public-private partnership (PPP).

Investors in the project for building Co Chien Bridge linking Vinh Long with Ben Tre have recently proposed turning the project financing form from BOT to PPP because of the changes in capital structure, according to the PPP Project Management Board under the transport ministry.

Due to financial distress, Civil Engineering Construction Joint Stock Company No. 8 (Cienco 8) pulled out of the project and Tuan Loc Investment Construction Corporation took over the job.

The investors have suggested the main bridge should be developed under the PPP format instead of BOT, with State capital accounting for around 40%. The investors will inject some VND1.2 trillion, in which Cienco 1 will contribute 35%, Cienco 4 20%, 577 Joint Stock Company 20% and Tuan Loc 25%.

The Co Chien Bridge project costs a total of more than VND3.79 trillion, with the main bridge demanding over VND2.21 trillion.

In the list of projects with investment priority in HCMC from now to 2020, a lot of projects were suggested for development under the BOT format, including the belt roads no. 2, 3 and 4, the elevated roads no. 1 and 3 and the Provincial Road 15 expansion.

However, after reconsidering the planning for toll stations, the municipal authorities are calling for investment under the PPP form.

Under the decision on adjustments to the plan for transport development in the Mekong Delta issued by the Government in April, the financing format for many projects will also be revised.

The transport ministry is asked to consider changing the format for development of the fairways for large vessels to enter the Hau River, My Loi Bridge, Long Binh Bridge, the Nam Can-Dat Mui section of Ho Chi Minh Road and expansion of certain sections on National Highway 91 and National Highway 53.

Trung Luong-My Thuan-Can Tho Expressway is also suggested for the PPP format.

Logistics, petroleum firms post low profits

Listed enterprises in the fields of logistics and petroleum saw their profits falling in the first quarter of this year given adverse impacts of economic difficulties.

Materials-Petroleum Company (COM) in its unchecked financial statement posted an after-tax profit of over VND5.6 billion, a 14.5% year-on-year increase.

Its pre-tax profit also declined nearly 12% to over VND7.3 billion. Sale and service provision revenue was nearly VND1.2 trillion, down 8.5% year-on-year.

Explaining these figures, the company blamed low earnings on petrol sales.

In the first three months of this year, the company sharply cut spending such as financial and sale costs and corporate management fees. It engages in oil and gas business, gasoline pumping post installation, warehouse leasing and design and construction.

Saigon Fuel Company (SFC) also saw its after-tax profit plunging by 62% to nearly VND1.4 billion although its revenue surged by 28%.

The enterprise operates in many fields such as fuel business, financial investment and real estate. However, gasoline sales contributed up to VND574 billion to its total revenue of nearly VND577 billion in the first quarter.

In the logistics sector, Sea & Air Freight International Company (SFI) obtained VND48.7 billion in revenue, up 27.7% against the previous year, but its after-tax profit declined by VND1.3 billion to over VND2.4 billion.

According to its financial statement, input costs and corporate management fees increased but financial revenue tumbled from VND573 million to VND143 million. Difficulties of the economy and the export and import industry were causes of the poor results.

South Logistics Company (STG) gained VND6.4 billion in after-tax profit, a slight rise compared to last year’s figure of VND6.1 billion. However, its profit earned from business activities was VND7.7 billion, lower than last year’s VND8 billion.

The company during its annual general meeting this year approved a revenue target of VND578 billion, 4.8% lower than in 2012, while its pre-tax profit is expected to increase 6.5% to VND35 billion.

Meanwhile, some logistics companies posted high profit rises due to revenues earned from financial activities.

Transimex-Saigon Corporation (TMS) gained VND103 billion in revenue and over VND35.9 billion in after-tax profit, up 72% and 140% year-on-year respectively. The profits were contributed by stronger import-export services and financial activities in the previous quarter.

Masan eyes 30-70% profit growth

Masan Group has set a profit growth target of 30-70% for 2013 given satisfactory performance of its subsidiaries along with the projects to be operational soon.

For example, the Nui Phao polymetallic mining project is in its final stage, with 98% of land recovered and the factory ready for operation in this quarter. The project is expected to generate huge revenues for Masan.

In addition, the group has deeply penetrated the beverages and the consumer goods industries.

Masan has acquired majority stakes in Vinh Hao Mineral Water Company and Phu Yen Beer and Beverage Company in a bid to become the largest private company in the consumer goods sector.

Masan has also opened a representative office in Singapore to enhance its presence in Southeast Asia, says the annual report of the group.

Besides, a new factory of Vinacafe in Long Thanh, Dong Nai is scheduled for operation in the second quarter, raising the production capacity by 2.5 times.

Masan plans to complete expansion of the instant noodle plant in 2013 and then it can produce an additional 60 million units every month.

Therefore, the group targets profit growth of 30-70% in 2013 and aims for US$1 billion in gross earnings in the next few years.

Masan in 2012 recorded total sales of over VND10.38 trillion, up 4.7% against the preceding year, with a net profit of VND2.78 trillion, down 10% year-on-year.

Such a profit decline is ascribed to Techcombank, in which Masan holds 30% of shares. The bank’s profit dropped 75.7% from VND3.15 trillion in 2011 to VND766 billion in 2012 due to lower lending rates, more difficult business environment and greater provisions for loans.

In 2012, Masan Group mobilized around US$130 million from R.F. Chandler and Mount Kellett and VND2.2 trillion via bond issuance. Meanwhile, Masan Resources raised US$80 million from Standard Chartered.

Early this year, KKR Fund poured US$200 million into Masan Consumer, taking the total mobilized capital in recent years to more than US$1.2 billion.

Vinalines fails to sell debt-laden ships

Vietnam National Shipping Lines (Vinalines) in the first quarter was able to sell only three out of 23 ships put up for sale as the firm is still struggling with debts related to those ships.

In a report submitted to the Ministry of Transport, Vinalines said the three ships sold out are Ha Dong of Vinaship, Transco Sun of Transco and New Phoenix of Vinashinlines.

Among companies under Vinalines, Vinashinlines is the enterprise with the most ships put up for sale, at ten units, but the entity has been able to sell only one.

The biggest difficulty facing Vinashinlines is to tackle debts claimed by material suppliers and repairing factories. The local giant is now seeking ways to have the debts restructured after selling ships as well as to unfreeze ships as collaterals at credit institutions.

There are many ships whose debts are much bigger than their selling prices, including the two foreign-flagged vessels Sea Eagle and Hoang Son 28 that have been abandoned at foreign seaports for long.

According to Vinalines, in the context of the current slackened sea transport demand, shipping lines are afraid of purchasing more ships although the prices of old vessels have fallen by as much as 30% in the first quarter against the end of June, 2012. Besides, the oversupply has resulted in slow sales of Vinalines’ vessels.

At present, tackling foreign-flagged ships belonging to Vietnamese entities is facing many difficulties.

Speaking with the Daily, Nguyen Nhat, director of the Vietnam Maritime Administration, said his agency is seeking approval from the Government and the transport ministry to dismantle vessels anchored in Vietnam’s seaports. And owners of ships left overseas might work with their partners to sell the ships as well, he added.

Thai investor nears agreement on USD27 billion oil refinery

Thai PTT Public Company Limited (PTT) plan to borrow 60% of capital for the USD27-billion oil refinery project.

A delegation from the provincial government of Binh Dinh Province, the expected location of the refinery, recently met with leaders of PTT to discuss how to make progress on the project.

The two sides agreed that of the USD27 billion total investment, 40% would come from investor’s equity and the rest would be loans.

PTT pledged to contribute to at least a third of the project’s equity while the remainder would come from its domestic and foreign partners.

The provincial government and PTT plan to seek the government’s approval in late May or early June for the investor to implement the project.

If approved, they would continue to complete a feasibility study on the project as well as other related procedures for the implementation.

Even though the project is still at the pre-feasibility study, it has met resistance from rival firms.

While Vietnam Oil and Gas Group (PetroVietnam) opposed the project for fear of diluting their influence over the domestic oil and gas market, the Ministry of Industry and Trade as well as provincial authorities and several experts have supported the implementation.

The investor proposed the project at Nhon Hoi Economic Zone in Binh Dinh Province with a designed capacity of 660,000 barrels per day, a five-fold increase over Dung Quat Oil Refinery’s output.

When approved, it would be the biggest oil refinery project in Vietnam.

Export turnover on year-on-year increase

According to the Ministry of Industry and Trade, export turnover in the first four months of this year reached US$39.46 billion, an increase of nearly 17 percent as against the same period last year.

At a press conference on May 6, the Ministry said that of the above figure, exports from foreign direct investment companies, excluding crude oil, were up 25 percent to hit $23 billion.

In April, export turnover was estimated at $9.7 billion, a reduction of 12 percent over March and an increase of nine percent over the same period last year.

The slow growth in export turnover in April is due to a fall in export value of agro-aqua-forestry products. Vietnamese rice price has been the lowest in the world recently, with the current prices being lower than that of Thailand and India.

Import turnover in April was recorded at $10.7 billion, a reduction of 7.6 percent over March but an increase of nearly 19 percent over the same period last year.

The import turnover touched $40.19 billion in the first four months this year.

Trade deficit was about $1 billion in April and $730 million in the first four months.

According to the Ministry, the trade deficit is because domestic enterprises have increased imports of materials, being seen as a sign of production recovery.

In April the production index in industrial sector moved up by five percent over the same period last year.

MBV launches its bikes to Vietnamese users

With the increasing demand of urban sporty transportation, Mercedes-Benz Vietnam has just launched new selection of bikes. The innovative technology and prestige of Mercedes-Benz are ensuring the quality and image of this selection.

These bikes are developed in co-operation with premium bicycle manufacturer ADP Rotwild at prices ranging from VND14 million to VND161 million.

The Mercedes-Benz Fitness Bike is enjoying growing popularity. Its big wheels offer a host of benefits for novices and experienced cyclists alike they roll over obstacles with greater ease, and retain their momentum more effectively.

Another star of the Mercedes-Benz Bike Selection is the All Mountain model. With Fox Racing suspension fork, 30-speed gear shifter and disc brake, this off-road bike can take on all terrain challenges. The Mercedes-Benz mountainbike weighs just 12.8kg. The Trekking Bike with mudguards, luggage rack and a dynamo light system is a trusty companion both for day-to-day needs and more extensive leisure outings.

The Kids' Bike provides a particularly snazzy means of introducing youngsters to the joys of bike riding.

Industrial production in recovery

Viet Nam saw a slight recovery in industrial production with the return of a US$1 billion trade deficit in April, according to a report from the Ministry of Industry and Trade yesterday.

Statistics showed the industrial production index in April increased by 5.8 per cent over the same month last year and the index of the four-month period rose 5 per cent over the same period last year.

The figures reflected signs of recovery in industrial production and that enterprises were more confident about the economy this year, the ministry said.

However, in the first three months, consumption was estimated to have increased only 4 per cent over the same period last year, proving that the purchasing power in the domestic market had not improved much.

The country was reported to have run a trade deficit of $1 billion in April and $722 million in the first four months of this year.

According to the ministry, the trade deficit last month was attributed to the low growth of exports, especially the decline in the export value of agricultural, forestry and seafood products.

The ministry's report revealed that export turnover in April decreased 12.1 per cent over March, reaching $9.7 billion, while imports also dropped by 7.3 per cent to $10.7 billion.

Nguyen Tien Vy, director of the Planning Department, said that in April, many enterprises enhanced imports of raw materials for their production, resulting in a trade deficit, which could be a sign of the domestic production recovery.

For the four-month period, export turnover was estimated to total $39.46 billion, representing a rise of 16.9 per cent over the same period last year, and the import turnover was nearly $40.19 billion, 18 per cent higher.

The foreign direct investment (FDI) sector accounted for around 65 per cent of the country's total export turnover and 71.5 per cent of the import turnover.

Regarding power supply, Dang Huy Cuong, director of the Electricity Regulatory Department, said that there would be enough power for production and daily life this month, citing Electricity of Viet Nam's plan to generate 11.8 billion kWh.

The Market Watch Department said the ministry would enhance market management to prevent the flow of smuggled or low-quality products into the country to product consumers.

Inspection focus would be placed on price management, food hygiene and safety as well as the quality of products such as milk, helmets and electric bicycles.

In the first four month of this year, the market watch handled more than 6,545 violations which were mainly related to smuggling, selling of fake and low-quality products and price violations, and collected total fines of more than VND18 billion ($857.200).

Regarding the refinery project in Nhon Hoi Economic Zone, worth $27 billion, Deputy Minister Ho Thi Kim Thoa, at yesterday's press conference, said the ministry's viewpoint was to support the project.

She said more investment in oil refining was needed because Viet Nam had only one oil refinery. However, there were still a lot of work to do for the feasibility of the project, she said.

The ministry also said that investment projects would be put under close supervision, especially key projects making slow progress, and those which were to be finished this year would be hurried up.

Budget revenue reaches $3.6 billion

Government revenue hit VND76 trillion (US$3.62 billion) in April, raising the total revenue in the first four months of this year to VND244.1 trillion ($11.62 billion), the Ministry of Finance said on its website.

This figure represented an increase of 2 per cent year-on-year, equivalent to 29.9 per cent of the estimate for 2013.

In the January-April period, revenue from domestic economic activities was estimated at VND164.29 trillion ($7.89 billion), up 2.9 per cent over the same period last year, while income from oil exports reached VND40.27 trillion ($1.93 billion), up 4.6 per cent.

After VND18 trillion ($864 million) in value-added tax was refunded, revenue from international trade was estimated at VND38.29 trillion ($1.84 billion), or 4.3 per cent year-on-year decrease.

In the four months ending in April, Government spending rose 12.3 per cent to reach VND303.4 trillion ($14.56 billion), resulting in a budget deficit of VND59.3 trillion ($2.85 billion).

Vietnamese CEO wins IT prize

Chairman and CEO of software giant FPT Corporation Truong Gia Binh has become the first Vietnamese businessman to be awarded the Nikkei Asia Prize 2013 in recognition of his contributions to the development of information technology (IT) in Viet Nam.

Binh, 56, received the award in the category of regional growth. He has not only contributed to the development of his own company but also to the development of the IT sector in Viet Nam, Nikkei Inc said on its website. He set up a software industry organisation and a university to foster IT experts, it said.

Nikkei Asia Prizes have also been awarded to Indian professor Tejraj Aminabhavi and Cambodian architect Vann Molyvann. Awarded annually, the prize recognises the achievements of people and organisations that have improved the lives of people throughout Asia.

Banks enjoy growth but stay below target

The banking industry witnessed a positive increase in credit growth over the past four months, with commercial banks reporting higher profits, according to the State Bank of Viet Nam (SBV).

The central bank said credit growth rose 1.4 per cent in the period compared to late 2012, and 0.2 per cent more than in the first four months of last year.

Despite the improvement, growth was still lower than targeted due to low borrowing demands from enterprises and the production sector.

SBV had previously set the growth target to ensure credit quality and liquidity among credit institutions.

Last week, BIDV and Vietcombank officially released their Q1 results for this year.

BIDV posted an after-tax profit of VND1.087 trillion (US$51.7 million) and Vietcombank reached an after-tax profit of VND1.086 trillion ($51 million).

SBV Governor Nguyen Van Binh said that capital mobilisation starting from January this year had been bounced back compared to the same period in 2011 and 2012. Up to April 23 this year, capital mobilisation rose 5.34 per cent against late 2012.

Capital mobilisation in Vietnamese dong was higher than foreign currencies, said

Binh, noting that depositor confidence in credit institutions had improved considerably.

In the last four months, available credit had remained stable and exceeded compulsory reserves required by the SBV.

The inter-bank interest rate remained low and saw a light decline against earlier this year. Thanks to stable liquidity, credit institutions had taken the initiative of supplying capital for businesses, said Binh.

The Viet Nam National Coal and Mineral Industries Group (Vinacomin) is seeking approval to lower the export tax on coal, claiming the mining industry faces difficulties due to steep decreases in demand both at home and abroad.

The move comes just six months since the Ministry of Finance agreed to cut the tax from 20 to 10 per cent, helping Vinacomin export 6.5 million tonnes of coal and reduce its inventory at the end of last year.

Nguyen Van Bien, Vinacomin's deputy general director, said the current export tax of 10 per cent was still high in comparison with other countries. It proposed the ministry make the export tax on coal similar to the average world prices.

Accordingly, if the average price was less than US$75 per tonne, the export tax would be 10 per cent. If the price was at $75-85 per tonne, the tax would be 15 per cent and 20 per cent for a price of over $85 per tonne.

Bien said the tax mechanism would ensure transparent calculations while supporting the industry in coal production and exports.

He added that the coal sold to the Electricity of Viet Nam (EVN) in the first quarter of the year was at just 71 to 73 per cent of the 2011 levels, causing Vinacomin a loss of VND1.5 trillion ($71.4 million).

Vinacomin had implemented cost-cutting solutions to save input costs for production and investments - this was the reason why the group was allowed to increase the price of coal sold to the EVN last month by 21-22 per cent. However, Vinacomin said the increase was swallowed up by this year's coal production costs.

In the first three months of the year, the group mined 11.7 million tonnes, accounting for 25 per cent of its yearly target. It sold 3.94 million tonnes for domestic use, an increase of 23 per cent over the same period last year.

The group said it would give priority to domestic users of around 28 million tonnes this year. It forecast total consumption and exports would be lower than last year.

Coal consumption last month was 700,000 tonnes, just 60 per cent of the March figure.

Increasing the price of coal sold to the EVN would add VND2 trillion ($95.2 billion) to Vinacomin, thus making a hike in electricity tariffs likely.

The EVN said the cost of coal accounted for 70 per cent of thermo electricity prices and that thermo power made up one quarter to one-third of the country's total power supply.

It added that if coal prices were increased, electricity tariffs would be higher.

It expected the price would be increased by 11 to 13 per cent this year as the central region received low amounts of rainfall, prompting the mobilisation of power from thermo electricity plants to the national grid.

Fusion Maia Resort in Da Nang voted best spa in Asia

The Fusion Maia Resort, located in central coastal Da Nang City, has been voted as Asia's Best Luxury Boutique Spa.

The World Luxury Spa Awards annually recognise spas around the globe that set standards in quality, innovation and service.

Located on Ngu Hanh Son District's Bac My An Beach, Fusion Maia Resort was voted one of Viet Nam's best luxury hotels in 2011 by America's Conde Nast Traveller magazine.

The Maia Spa is the highlight of the resort and the largest spa in Viet Nam. Its therapies are based on the resort's seven-principle guideline on how to achieve a balanced lifestyle.

The awards also voted Le Spa at La Residence Hotel in Hue City as Viet Nam's Best Luxury Boutique Spa, and Six Senses Con Dao Spa in Vung Tau City as Viet Nam's Best Luxury Resort Spa.

Investors shun city ferry plan

A plan to develop a ferry system to relieve traffic congestion on HCM City roads was publicised with great fanfare a few years ago, but only one company has expressed interest in investing in such a system.

The city said Thuong Nhat Company had submitted a feasibility study and plan, which includes details on several routes.

But all remains on paper, Tran The Ky, head of the city's Department of Transport, was quoted as saying by the Sai Gon Giai Phong (Liberated Sai Gon) newspaper.

Many local residents and city authorities have supported the idea and asked investors for their input, but obstacles, such as low bridge clearances and the shallow levels of canals, have deterred other potential investors.

The city has even asked State-owned enterprises to invest in the project, but they have shown no interest.

Nguyen Kim Toan, director of Thuong Nhat Company, said such a system could increase tourism and reduce traffic congestion on the roads.

However, many of the city's canals and rivers are too shallow to carry passenger boats and the clearance of many bridges is too low.

The city has more than 230 bridges over rivers and canals, many of which do not meet the standard of 2.5m of clearance required under the city People's Committee's water-traffic zoning plan through 2020.

According to the city's Transport Department, the Nhieu Loc – Thi Nghe Canal alone has 20 bridges with very low clearance.

A representative from Thuong Nhat Company who declined to be named said one major problem was the need for land clearance to build 16 ports for the water-bus system.

Ky, the transport department head, said that some bridges would have to be rebuilt, which would increase construction costs.

These kind of costs were scaring away investors, who were worried about not making a profit.

In its plan, the Thuong Nhat Company said it would use boats of different sizes to adapt to the condition of canals and the navigation of some bridges.

The company's plans called for a 25km waterway route stretching from District 12's An Loc to Nha Be District's Phu Xuan, and a second 12km route from Ben Nghe Canal to Tau Hu Canal.

Other routes would extend to western and southern areas, including Ca Mau, Kien Giang and Ha Tien, Dong Nai and Binh Duong.

With a dense system of rivers and canals, nearly 8,000km in length and a water surface covering 16 per cent of the total space, HCM City would be an ideal place to have a waterway bus system, according to city officials.

Under Thuong Nhat's plan, 16 boats would be used, eight of which would be able to carry 100 passengers per trip, and the remaining, 40 passengers.

Agriculture credit growth tipped

The State Bank of Viet Nam (SBV) has predicted that credit growth in the agriculture sector will rise 15 per cent, while in comparison the country's total credit growth is predicted at 12 per cent.

The figure was announced by the central bank yesterday during a seminar on banking credit for economic development, held by the Banking Academy.

According to the SBV, in the first three months of 2013 the total outstanding debt facing the entire economy rose 0.67 per cent compared to the last three months of 2012.

Of this figure, outstanding debt for agriculture and rural areas reached nearly VND579 trillion (US$27 billion) or 3.1 per cent up compared to late 2012. It accounted for more than 18 per cent of the entire economy's outstanding debt - not including debt owed to the Bank for Social Policy.

Currently, the outstanding debt for the seafood industry stands at 34.5 trillion ($1.6 billion), a 1 per cent decline from the last quarter of 2012, partly due to an 8 per cent decline in seafood exports. Meanwhile, outstanding debt for the purchasing of machinery and equipment in the farm sector reached VND1.32 trillion ($628 million), or a 16.4 per cent rise compared to late 2012.

As of April 25, the total outstanding debt of the entire economy rose 1.73 per cent

According to deputy director of the Monetary Policy Department at the State Bank, Pham Xuan Hoe, every year the entire banking system had to pay interest on savings at more than VND300 trillion ($14 billion) per year.

Of that figure, VND280 trillion ($13.3 billion) was paid to businesses and individual depositors, while the remainder went to the State Capital Investment Corporation, State Treasury and insurance organisations.

Some economists have calculated that the whole economy now has to pay VND400 trillion ($19 billion) per year in interest for commercial banks, Hoe added.

Speaking at the seminar, Nguyen Duc Huong, deputy chairman of LienViet PostBank said that by lowering lending interest rates to rescue ailing businesses, the central bank would face challenges. He noted that if loss-making businesses were rescued by the central bank with a lending rate even as low as zero per cent, they would still not survive, and at the same time depositors would rush to withdraw their money at the banks due to the lower interest. As a result, commercial banks would face the risk of illiquidity, leading to a liquidity race among commercial banks.

Huong conceded that the central bank could lower the lending interest rate at a reasonable ratio to protect depositors instead of trying to rescue loss-making businesses.

Nguyen Duc Trung, an official of the Banking Academy, was in agreement and declared that a consistently high lending rate from 2004-2012 had not hindered businesses from borrowing money. He added that currently a lower lending interest rate would not help raise credit growth.

Ministry agrees to bolster rice research

The Ministry of Agriculture and Rural Development yesterday signed a Memorandum of Understanding (MoU) with the International Rice Research Institute, pledging to bolster the use of science and technology in rice research for Viet Nam.

Speaking at the signing ceremony, Minister Cao Duc Phat said the agreement signaled a new stage in the co-operation between both sides, and would lead to an improvement in Viet Nam's rice quality and productivity, while increasing the income of rice farmers.

Viet Nam also needed to ensure the rice sector was ready to adapt to climate change, he said.

IRRI General Director Robert Zeigler said the institute had been proud of its partnership and achievements in Viet Nam in the rice sector and declared that both sides would focus on strengthening co-operation in climate change research in the Southeast Asia region.

Since 1975, through IRRI and Viet Nam partnerships, Vietnamese farmers have been able to maximise the full potential of the high-yielding rice varieties being grown in the Mekong and Red River Deltas.

Power prices held despite coal costs

Despite a rise in the price of coal sold to power plants late last month, the Ministry of Industry and Trade has not been asked to permit an increase in power prices by Electricity of Viet Nam (EVN).

Director of the ministry's Electricity Regulatory Department Dang Huy Cuong confirmed this at a ministry meeting o­n Monday.

However, he admitted that EVN was doing calculations and would report to the department in the near future.

Taxi operator to open on island

Phuc Xuyen Co Ltd on Sunday carried vehicles to Co To Island in northeastern Quang Ninh in preparation for the opening of the first taxi operator on the island.

The company is equipped with three Innova seven-seater cars and 10 electric cars, worth more than VND4 billion, said company director Doan The Xuyen.

Quang Binh hosts trade fair

A 2013 trade and tourism fair, organised by Quang Binh Provincial Department of Industry and Trade and SHB Event Joint Stock Company, opened in Dong Hoi City on Monday.

It features more than 250 Vietnamese enterprises across the country who have a total of 350 stalls carrying conical hats, garments and textiles, processed food, timber furniture, handicrafts and household goods.

The provincial Department's Deputy Director Dinh Minh Chat said the eight-day fair was part of activities to celebrate UNESCO's recognition of the central province's Phong Nha-Ke Bang National Park as a World Natural Heritage Site.

Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR