Vietjet opens special promotion for Tet holidays

To meet the surge in demand for air travel before, during and after Tet (Vietnam’s Lunar New Year holidays) in early 2016, Vietjet has launched a massive promotional campaign on all domestic routes and international ones from Vietnam to Thailand, Singapore, Taiwan, South Korea and Myanmar.

The airline will also increase the frequency of high-demand routes, such as Ho Chi Minh City - Hanoi (with more than 20 round trips per day for the holiday period), Ho Chi Minh City - Da Nang (10 round trips per day), Ho Chi Minh City - Hue (fourround trips), Ho Chi Minh City - Vinh (four round trips), Ho Chi Minh City - Hai Phong (six round trips) and Ho Chi Minh City- Nha Trang (three round trips).

Tickets can be booked at www.vietjetair.com (also compatible with smartphones athttps://m.vietjetair.com) or at www.facebook.com/vietjetvietnam (just click the “Booking” tab) or at Vietjet ticketing offices and agencies nationwide.

Customers can also call Vietjet’s hotline at 1900 1886. Payment can be easily made with Visa, MasterCard, JCB, American Express, and ATM cards issued by 24 Vietnam banks that have been registered with internet banking.

Before the up-coming high season begins, Vietjet will also add new aircraft to its fleet and launch new international routes to Seoul (South Korea) and Yangon (Myanmar). There will also be new routes from Hanoi and Ho Chi Minh City to Pleiku (Vietnam) added to the domestic network. 

Vietnam joins ASEAN single window customs system

USAID welcomes the announcement of the General Department of Vietnam Customs (GDVC) of the official launch of Vietnam’s National Single Window and the  integration with the ASEAN Single Window customs system.

“Vietnam deserves congratulations for a successful effort to implement the National Single Window. With today’s launch Vietnam regional economic integration has reached another milestone,” said USAID Vietnam Mission Director Joakim Parker.

“This system is expected to accelerate the pace of customs clearance, thereby improving trade effectiveness and competitiveness of Vietnam and other ASEAN state members.”

USAID’s development cooperation supports many aspects of Vietnam’s efforts to increase competitiveness and broaden growth. With respect to single window objectives, the U.S. Agency for International Development (USAID) and the U.S. Mission to the Association of Southeast Asian Nations (ASEAN) have closely worked with ASEAN member states over the last eight years to make the ASEAN Single Window (ASW) for customs clearance a reality. USAID supported the analysis of legal requirements in Vietnam and other countries.

These reports helped ASEAN member states to better understand the national-level legal changes necessary to integrate their National Single Windows into the ASW. As a result of such efforts, ASEAN has launched the  electronic exchange of standardized trading documents among the ten ASEAN states as a central element of the ASEAN Economic Community.

The ASW is a unique regional initiative that connects and integrates National Single Windows of Member States. The ASW objective is to expedite cargo clearance within the context of increased economic integration in ASEAN. The main goals of the ASEAN Single Window initiative are simpler and faster processing time, and a more transparent way of doing business.

Building begins on Soc Trang thermo-power plant

Stakes are being planted as part of the construction of the Long Phu 1 thermo-power plant in the southern province of Soc Trang.

A ceremony was held yesterday to kick-start the project, which is being run by PetroVietnam.

Included in the Long Phu Power Centre, the 1,200 MW plant is one of the nation's key projects and is scheduled to go into operation in 2018.

The Long Phu Power Centre was approved by the Ministry of Industry and Trade in 2007 with a total capacity of 4,400 MW. Once in operation, the centre is expected to contribute to ensuring national energy security in Soc Trang Province and the southwest region.

Nguyen Hung Dung, PetroVietnam's deputy general director, promised optimal conditions and sufficient capital for the construction while asking the contractors to ensure progress and safety as well environmental protection around the plant during both construction and operation.

Firms gripe that minimum wage too high

Companies are complaining that the planned 12.4% increase in Vietnam's minimum wage next year will raise costs and force some firms out of business.

Along with salary, businesses must pay an additional 17% of a workers wages to a social insurance fund. This causes a 12.4% increase in salary to become more like a 20% increase in costs, according to Hoang Quang Phong, Vice President of Vietnam Chamber of Commerce and Industry.

The garment industry, which includes 4,800 companies employing 2 million workers, will have to pay an additional VND6 trillion (US$260 million) in social insurance costs next year due to the higher minimum wage, said Vu Duc Giang. Chairman of Vietnam Garment Association.

"Minimum wage increase, high social insurance costs and trade union costs contribute to the loss of many enterprises," Giang said. "This is also the reason why enterprises fail to pay social insurance for employees."

The Chairman of the National Assembly's Committee of Social Affairs, Bui Si Loi, said he was concerned that a 12.4% increase could hurt workers by driving firms to reduce staff.

"Bearing too many kinds of expenses may cause a loss for the business and in that case, employees may get dismissed which obviously puts them at great disadvantage" Loi said.

There are 483,000 enterprises in Vietnam, 70% of which fail to make profit, according to the tax bureau's statistics.

If a business fails to have expenses under control, it may have to use allowances and bonuses supposedly for employees to compensate for other expenses, said Deputy Chairman of Trade Union of Hanoi processing and industrial zone, Nguyen Dinh Thang.

Nguyen Thi Tham, a worker at 19/5 Garment Company said the increased salary may not put more money in her pocket.

"I am afraid that my employer may cut other benefits," said Tham. "In the end, the increase in minimum wage may not raise the salary for us."

Government mulls nixing tax fines, fees

The Ministry of Finance has proposed to the National Assembly waiving nearly VND9 trillion (US$409 million) of fines on enterprises for late tax payments, while also suggesting cuts on several types of tax.

The proposals will be discussed at the next session of the NA this October.

If an enterprise's products or services are bought by the State budget and payment has not been received, resulting in the enterprise filing their taxes late, it is eligible for the tax fines waiver.

Enterprises whose partners are bankrupt or have unilaterally terminated contracts, resulting lateness in filing taxes, are also eligible for the waiver.

Pham Dinh Thi, head of the Ministry of Finance's tax policy department, said the number of bankrupted enterprises and struggling businesses was increasing. Because of this, they are late in paying taxes, and in many cases, the fines for late payment are larger than the tax itself.

If this problem isn't addressed, the administrative cost for managing these fines will be a burden to the tax agency, he said.

The ministry also proposed eliminating fines for enterprises or individuals which have gone bankrupt or been dissolved and the tax payer can't be found.

In the proposal, the finance ministry also suggested eliminating unsuitable taxes and fees, where the cost for tax collection is much higher than the tax itself.

Thi from the tax policy department cited taxes on non-agriculture land in rural and remote areas. He said the tax on these areas was quite low, while the money spent on printing tax forms, bills and hiring staff was much higher.

"Tax collection in these areas is not effective," Thi said.

Statistics from the ministry showed that there are 16 million families nationwide who have to pay non-agriculture land tax. Of these, the number of families who have to pay VND50,000 (US$2.2) and below is 12 million. The tax collection from these 12 million families is only 14.5% of the total tax collection for non—agriculture land.

Dang Thi Binh An, Chairwoman of C&A tax consultancy company, suggested that families in rural and remote areas who have to pay VND50,000 and below for non-agriculture land tax should be exempt from the tax.

The elimination of tax in these areas will obviously reduce the State budget, however, this can be compensated by the reduction in the cost of tax collection, Thi added.

Vu Quoc Tuan, former member of the Prime Minister's consultant group, said the waiver of tax fines and elimination of fees was aimed at boosting Vietnamese businesses' competitiveness.

"Taxes and fees need to be balanced," he said.

Falcon financial group to promote Vietnam, Middle East two-way trade

A cooperative agreement was signed in Dubai by the United Arab Emirates (UAE), the Vietnamese embassy and the leading Falcon financial group on September 6 to promote two-way trade between Vietnam and the Middle East through Falcon’s financial services and solutions.

They agreed to develop an action plan to implement the agreement as from October this year by connecting Falcon to Vietnam’s agencies, organisations, associations and businesses, sharing market information and other trade promotion activities.

Vietnamese ambassador to the UAE Pham Binh Dam emphasised that the UAE is a strategic market in the Middle East, a transit centre among continents and the gateway for Vietnamese goods to penetrate foreign markets. Currently, the UAE is Vietnam’s fifth largest importer, however, there remains a great potential for future import-export activities. That’s why Vietnam has always sought ways to promote trade ties with the UAE. Falcon is a potential partner with rich experience and good financial capacity.

Falcon Group CEO Will Nagle believed that the agreement will help Falcon cooperate in implementing business development programs and share information to boost trade ties. He underscored the importance of Falcon financial solutions to enhance trade activities between Vietnam and the rest of the world.

Int’l food exhibition to open in HCM City

The 19th International Exhibition on Food & Beverage and Processing & Packaging Technology (Vietfood & Beverage – ProPack Vietnam 2015) will take place in Ho Chi Minh City from September 9-12.

About 350 businesses from Egypt, India, Poland, Belgium, Denmark, Germany, the Republic of Korea, Indonesia, Italy, Lithuania, Malaysia, South Africa, Japan, Spain, Thailand, Turkey, China, Australia and Vietnam.

The participants will open 422 booths showcasing products ranging from farm produce, fresh and processed seafood, fruit and vegetables, processed food and drinks.

This is annual event organised by the Vietnam National Trade Fair and Advertising Company under the Ministry of Trade and Industry in conjunction with the HCM City Food and Foodstuff Association, the Vietnam Beer, Alcohol and Beverage Association and the Vietnam Tea Association.

Construction of Long Phu 1 thermo-power plant in progress

Stakes are being planted as part of the construction of the Long Phu 1 thermo-power plant in Long Duc commune, Long Phu district in the southern province of Soc Trang.

A ceremony was held on September 7 to kick-start the phase, which is important to the quality and progress of the project invested by the Vietnam National Oil and Gas Group (PetroVietnam).

Included in the Long Phu Power Centre, the 1,200 MW plant is one of the nation’s key projects. It comprises two turbines with the first scheduled to be operational in 2018 and the second to go into service a year later.

The Long Phu Power Centre was approved by the Ministry of Industry and Trade in 2007 with a total capacity of 4,400 MW. Once in operation, the centre is expected to contribute to ensuring national energy security and economic transfer of Soc Trang province and the Southwest region in general.

Nguyen Hung Dung, PetroVietnam Deputy General Director, promised optimal conditions and sufficient capital for the construction while asking the project’s contractors to ensure its progress and safety as well as protect the environment around the plant during both construction and operation.

Economic growth likely to reach 6.4 percent

Vietnam’s economic growth in 2015 is forecast to reach 6.4 percent, according to the Ministry of Planning and Investment.

The country’s macro-economy is still under control despite negative impacts from regional and global economic downturns, Minister of Planning and Investment Bui Quang Vinh said, citing recent signals of national economic recovery.

In the first eight months of this year, the country’s industrial production index and goods export turnover increased by 9.9 percent and 9.5 percent, respectively, from those in the same period last year.

Meanwhile, total retail sales of consumer goods and services in the period were estimated to rise 10.1 percent year-on-year, yielding positive signs in purchasing power and total demand, which will create a momentum to foster production and business activities and promote economic growth.

In August this year, as many as 9,301 enterprises were established nationwide with total registered capital of 55.2 trillion VND (nearly 2.5 billion USD), representing increases of 41 percent and 41.9 percent, respectively, over the figure recorded in July.

However, agriculture and aquaculture are facing challenges due to unfavourable weather, low output and prompt reduction in export turnovers and prices.

Vietnam’s economy is predicted to face challenges due to plunging oil prices in the world market and complicated global financial market developments after China’s devaluation of its yuan.

Falcon Group to assist with Vietnam’s trade promotion

The London-based Falcon Financial Group has pledged to assist with promoting trade activities between the Middle East and Vietnam via the provision of financial services and solutions for Vietnamese enterprises.

An agreement to this effect was inked between the Vietnamese Embassy in the United Arab Emirates (UAE) and the group in Dubai on September 6.

The two sides have designed an action plan for the agreement’s implementation in October, including strengthening connections and exchanges between the group and relevant Vietnamese agencies, associations and enterprises.

The Vietnamese Embassy will also facilitate access to the domestic market for the Falcon Group, among other trade promotion activities.

During the signing ceremony, Vietnamese Ambassador to the UAE Pham Binh Dam highlighted the UAE as a strategic market in the Middle East, saying it is a gateway for Vietnamese products to enter various markets.

The UAE is the fifth largest export market of Vietnam, Dam said, underlining the huge import potential between the two countries.

Vietnam has continuously sought to promote bilateral trade ties with the UAE, the Vietnamese diplomat said, hailing the experience of Falcon Group after many years operating in the Middle East region.

General Director of the Falcon Group Will Nagle expressed his pleasure to sign the agreement with the Vietnamese diplomatic agency, saying that Vietnam is a market with huge potential, and Falcon’s financial solutions would help foster trade ties between Vietnam and the rest of the world.

The Falcon Financial Group, with its headquarters in London, the UK, is a major group providing financial services for import and export activities around the world.

Over the past four years, it has provided financial assistance worth up to 12 billion USD to enterprises in the Middle East, Asia, Europe, Australia and New Zealand.

Nearly 22 billion USD poured into Binh Duong

The southern province of Binh Duong has, to date, attracted approximately 22 billion USD in foreign direct investment (FDI) with 2,511 valid projects, revealed the provincial Department of Planning and Investment.

Of the figure, over 1.4 billion USD has been poured into the locality this year so far, focusing on industrial production, the support industry, retail and real estate.

Within the first eight months of the year, 124 projects received investment licences with a total registered capital of 788 million USD and 85 others increased their capital by more than 647 million USD combined.

Tran Van Nam, Chairman of the provincial People’s Committee, attributed the synchronous investment infrastructure and the good infrastructure development of 28 centralised industrial parks in Binh Duong to the strong FDI influx.

Apart from FDI enterprises, domestic firms have also seen robust development, Nam said, noting that the locality is now home to more than 19,500 domestically-invested businesses valued at 144 trillion VND (6.3 billion USD).

By the end of this year, the industrial sector is expected to constitute 60 percent of the province’s economic structure, helping to raise its average GDP per capita to 95.6 million VND (4,206 USD).

The official said with its huge potential along with improved competitiveness and brand names, Binh Duong has been one of the leading localities in the country’s reform process.

Ca Mau to expand VietGAP mixed rice-prawn farming areas

The People’s Committee of the southernmost Ca Mau province targets to increase local integrated rice-prawn farming grown under VietGAP standards tenfold to 10,000 hectares by 2020, mainly in the Thoi Binh, U Minh and Tran Van Thoi districts.

It is part of the provincial plan to develop 45,000 hectares of mixed rice-prawn fields, which are expected to produce an output of 200,000 tonnes by 2020.

According to the provincial Department of Agriculture and Rural Development, Ca Mau has a large estuarine land area with naturally high soil fertility suitable for growing the locality’s high-quality indigenous rice varieties, such as “mot bui do”, “mot bui bo dia”, “trai may” and “tep hanh”, without the use of fertilisers or pesticides.

The province will also zone its farmland into areas for mixed rice-tiger prawn, rice-giant freshwater prawn, rice-prawn-crab and rice-prawn-vegetable farming based on the ecological conditions of each area while developing space for high-quality seed rice.

Additionally, it will focus on transferring VietGAP cultivation techniques to local farmers and improve irrigation systems to ensure water supply.

Building materials consumption expected to rise in Q4

The consumption of building materials is predicted to rise in the fourth quarter this year as the real estate sector is showing signs of recovery.

According to the Building Materials Department under the Ministry of Construction, production and consumption of building materials has increased 20 percent from the beginning of this year. Cement alone rose 10 percent.

As of the end of August, the whole country had consumed 46.92 million tonnes of cement, up 10 percent against the same period last year and reaching 65 percent of the yearly target.

The cement consumption in August alone was 6.08 million tonnes, lower than that of July but up 19 percent from one year ago.

While local consumption is down, cement exports in August reached 1.25 million tonnes and increased 25 percent against the same period last year.

The cement export volume for the eight months of 2015 was 10.9 million tonnes, up 17 percent and completing 57.3 percent of the year’s goal.

In the remaining months of 2015, building materials in general and cement in particular will enter their peak consumption months.

Many real estate projects are entering their final phase of completion or breaking ground, propping up the growth of the building material market.

Coffee output likely to fall by 20 percent

Vietnam’s coffee output in the 2015-2016 harvest is likely to fall at least 20 percent short on the set target, said the Vietnam Coffee and Cocoa Association.

The situation is attributed to long-lasting severe drought in the Central Highlands, a key coffee cultivation region. Drought has withered vast areas of coffee in Dak Lak, Lam Dong, Dak Nong and Gia Lai provinces.

In Dak Lak, the largest coffee cultivation zone, nearly 48,000 ha of coffee plants were subjected to water shortages, resulting in a decrease of 15-20 percent in the output compared to those of the previous harvest.

Apart from negative weather impacts, the coffee output reduction was caused by increasingly low economic efficiency due to aging coffee trees and slow coffee re-cultivation progress in the Central Highlands region.

Vietnam is currently home to 671,000 hectares of coffee, making it one of the major crop earners.

Last year, the country raked in 3.55 billion USD from coffee exports.

Exports face tough path ahead

A lot needs to be done between now and the end of the year to meet the export growth target of 10%, the Ministry of Industry and Trade (MoIT) has said.

The export prices and volumes of many agricultural and mineral products would continue their downward trend, affecting the increase in export value, Nguyen Tien Vy, head of the ministry's planning department, said.

He said domestic companies' exports would continue to see slow growth as major commodities such as agro-products, seafood and minerals were on the decline.

The growth of exports, Vy said, was becoming fragile as they depended too much on large foreign direct investment (FDI) enterprises whose sales could suffer due to unexpected factors.

Vietnam's dependence on imported input materials for production and exports may also lead to a decline in competitiveness in the event of changes in prices and policies.

Phan Thi Dieu Ha, deputy head of the department of imports and exports, said as domestic enterprises' exports fall, it would be necessary to focus on administrative reforms to take advantage of free trade agreements.

Vy said traditional markets such as Southeast Asia, East Asia, China and Australia, as well as the US, the European Union, Russia and East European countries, besides Canada and India would gradually expand.

According to a MoIT report, the export value in the first eight months of this year reached US$106.3 billion, up nine per cent against last year, with Vietnamese firms contributing US$31.7 billion, down 2.3%, and FDI firms, US$74.6 billion, up 14.7%.

In the eight-month period, Vietnam's import surplus reached US$3.6 billion, equal to 3.4% of the total export value.

Vietnam witnessed a trade surplus of US$14.56 billion with the US in the past seven months, according to the latest statistic from the General Department of Customs.

During this period, Vietnam exported goods worth $18.86 billion, while its imports had reached more than US$4.3 billion. As per these figures, the US remained Vietnam's largest export market among 200 countries and territories that it had established trade partnerships with.

Of the 40 items exported to the US, textiles and garments posted the highest export turnover at approximately US$6.3 billion, accounting for 33.4% of Vietnam's total export value.

Four other products which witnessed a turnover of at least $1 billion included footwear at US$2.36 billion, telephones and components (US$1.53 billion), and computers, electronics and spares (US$1.5 billion), in addition to wood and wooden goods (US$1.45 billion).

Vietnam, meanwhile, had imported 43 kinds of goods from the US including phones and spares which recorded the highest import value of US$842.8 million, machines, equipment and components (over US$587 million) and cloth (US$527 million).

Excluding the influence of TPP, the bilateral trade between the two countries could amount to US$51.4 billion by 2020, the Government's news website chinhphu.vn quoted the American Chamber of Commerce in Vietnam (AmCham) as saying.

Apparel and footwear lead surge in exports

Manufacturers based out of Vietnam producing goods in the apparel/textile and footwear/leather industries led the pack in exports for the eight months leading up to September, according to Vietnam Textile and Garment Association (VITAS).

In the eight months January-August, apparel/textile exports jumped 10.9% year-on-year to US$15 billion while leather/footwear exports surged by nearly 21% to US$8.1 billion.

VITAS said the recent currency devaluation by China has had little or no impact on exports to date, but in the long run will likely put increased downward pressure on export revenues.

RoK tops foreign investors in Vietnam

The Foreign Investment Agency has ranked the Republic of Korea (RoK) with investment of US$5.26 billion, representing 39.5% of the total, as the top foreign investor among 55 counties.

The UK ranked second with investment of US$1.25 billion, followed by the British Virgin Islands with US$973.6 million and Hong Kong at US$867 million.

Foreign businesses have invested in 17 fields, for which the manufacturing and processing industry led with US$10.35 billion in 924 projects.

Manufacturing was followed by real estate with US$1.82 billion and the retail industry in third at US$311.08 million.

Building materials demand jumps

Together with the recovery of the HCM City property industry, consumption of building materials is also increasing.

Tran Thi Hanh, owner of a shop selling building materials in Binh Chanh District, said the number of customers buying steel, bricks, sand, and cement has doubled in recent months, and monthly revenues have risen by VND30-40 million (US$1,333-1,778) to VND100-200 million ($4,444-8,889).

Ho Van Hue, who has a delivery tricycle stationed at An Suong intersection in District 12, said there are around 20 such vehicles in the area, and each used to do one or two trips a day transporting building materials and earning VND150,000-VND200,000.

Now each does four to five trips, he said.

Sales of iron and steel and cement have met or surpassed targets.

Consumption of cement was up 9 per cent year-on-year in the first eight months at 36.02 million tonnes.

Many steel companies like Hoa Phat Group Joint Stock Company and Hoang Tung Production and Trading Co.,Ltd said sales had shot by 50 per cent in recent months.

More than 3 million tonnes of steel were sold in the first seven months, up 24 per cent year-on-year and 12 per cent higher than the target.

Le Van Toi, head of the Ministry of Construction's Building Materials Department, said the property market has warmed up recently, pushing up demand for building materials.

According to shops selling them, many kinds of materials are available in the market at a range of prices depending on brand and quality.

According to insiders, the imminent international integration is set to spark off fierce competition in the market.

The steel industry already faces blooded competition from imports from ASEAN member countries at zero duty, the Viet Nam Steel Association said.

The brick and floor tiles markets also witness intense competition between local and Chinese products.

Export tax on sliced cassava cut

The export tax for sliced cassava was reduced from 5 per cent to zero last weekend after the Finance Ministry released Circular No. 141 on revising the tax.

The decision was issued after receiving approval, in principle, from the Prime Minister. The ministry said they would co-operate with the relevant agencies to change tariffs for the exported cassava products in the coming period. It will also evaluate ways of gradually increasing the export tariffs for cassava to match the plan for E5 bio-fuel production and consumption.

On May 6, 2015, the ministry issued Circular No. 63/2015 to increase the tax to five per cent, aiming to ensure the supply of sliced cassava, the main material for E5 bio-fuel production.

However, the tax level created difficulties for enterprises and farmers. Last year, Viet Nam imported more than 1 million tonnes of cassava and exported some 2 million tonnes of sliced cassava.

Ha Noi releases IT regulations

Ha Noi's Information and Communications Department has released regulations on the management, operation and development of infrastructure, application and information safety in IT applications.

The regulation also clarifies the responsibilities of its offices in IT asset and operational management to ensure the safety of IT infrastructure.

The department regulates the operation, exploitation and safety of information, infrastructure and the city's public applications.

ACE Life, the global life insurance division of ACE Group- one of the world’s largest multiline property and casualty insurers, today announced an increase in the chartered capital of its company in Vietnam by more than VND100 billion (equivalent to $5 million).

This is the first time during the last five years ACE Life Vietnam has increased its chartered capital in this growing market, bolstering the company’s shareholder equity in Vietnam to more than VND1,300 billion ($59.6 million).

“Today’s action represents ACE Life’s continued commitment to Vietnam. The country has created an environment welcoming to foreign investment and has put in place policies to support the further growth of the insurance industry, a key sector that stimulates overall economic growth,” said Lam Hai Tuan, chairman and country president of ACE Life Vietnam.

This year marks an important milestone for ACE Life Vietnam as the company celebrates the tenth anniversary of its operation in the country and the commencement of its third strategic five-year plan “Journey from Good to Great”.

In the first half of this year, ACE Life has opened three new offices and launched several new products, namely Executive Universal Life Plus (EUL+), two new supplementary insurance benefits of Long-scale Accidental Death and Dismemberment and Extended Hospital Cash Benefit – a new health insurance type product.

Going forwards, ACE Life is committed to continuing its geographic expansion, enhancing the quality of its service and human resources and enlarging its suite of products to better serve and protect the financial needs for millions of Vietnamese.

Consortium gets yellow card for expressway delay

The investor and the oversight body have just received a ‘yellow card’ from the transport authority for poor performance on the Trung Luong-My Thuan expressway project in the southern region.

Deputy Minister of Transport Nguyen Van The recently issued a warning towards the project’s related parties at a meeting to review the progress of this major southwestern highway, as the parties had failed to meet most of their progress targets on capital contribution and land acquisition.

Six months after re-launching, the investor consortium at the Trung Luong-My Thuan expressway project has still fallen short of their capital contribution commitment, as regulated in the build-operate-transfer (BOT) contract.

The investor is a consortium consisting of Tuan Loc Investment Construction JSC, Yen Khanh Production and Trade Services Company Limited, BMT Construction Investment JSC, Thang Loi Group Limited, and Hoang An JSC.

According to a recent report submitted by the Cuu Long Corporation for Investment, Development, and Project Management of Infrastructure (Cuu Long CIPM), late last month, the project enterprise Trung Luong-My Thuan BOT Company could only contribute 91 per cent of the required equity capital, amounting to VND1.408 trillion ($64.5 million) out of VND1.542 trillion ($70.7 million).

Cuu Long CIPM was tasked by the Ministry of Transport (MoT) to act as the project oversight body.

“The project has been resumed for over six months now, but to date, we have yet to receive any report from the investor about their commitment to fulfilling capital contribution as required in the BOT contract,” said Duong Tuan Minh, general director of Cuu Long CIPM.

In the past three months, Cuu Long CIPM had sent documents several times requiring the investor to submit a proof (the project enterprise bank account surplus) as a confirmation of the latter’s commitment to fulfilling their [capital pooling] obligation, but there was no response.

Not only did the investor fail in their capital pooling commitment, the project oversight body - Cuu Long CIPM - has also missed their target of finalising compensation and land   acquisition before August 15, 2015 as required by the MoT.

“Many projects are being developed in the area, making it hard for us to concentrate sufficient manpower on implementing this project’s site clearance work,” said a source from Cuu Long CIPM.

Deputy Minister of Transport Nguyen Van The assumed the less-effective management of the project enterprise and the oversight body had caused such delays.

In respect to site clearance, The has asked the Trung Luong-My Thuan BOT Company and Cuu Long CIPM to work closely with local authorities to ensure completion of this phase before the end of this year.

As for the project’s pace, The has required the Transport Construction and Quality Management Bureau under the MoT to evaluate the project record and prepare a plan to replace the project oversight body, in case no progress was reported in the upcoming time.

“The oversight body and the Trung Luong-My Thuan BOT management board both lack professionalism. Meanwhile, the investor also needs to change their management approach. The MoT will apply strong measures in case of no improvements,” The noted.

The Trung Luong-My Thuan expressway project involves building a 51km highway and 4.5km approach road at a total investment capital of VND14.6 trillion ($673 million) under the BOT form.

The project construction, initially kicked off by the Expressway Investment Development Joint Stock Company under state-owned Bank for Investment and Development of Vietnam (BIDV) in November 2009, became suspended due to the investor facing capital constraints. It was resumed in February this year.

$300 million Hong Kong facility licensed in Long An province

The Long An Economic Zones Management Authority has granted the investment certificate to Hong Kong Huafu International Co., Ltd to construct a $300 million fiber factory in the Thuan Dao Industrial Park. according to newswire Thoibaonganhang

The construction, scheduled to be conducted in two phases, is expected to be completed in the first quarter of 2017. Once completed, the 35-hectare factory will employ more than 3,000 local workers.

The investor pledged to equip the factory with modern technologies and an environmentally friendly, automatic and closed production chain.

Being one of the world’s leading fiber suppliers, Huafu’s products are present in more than 60 countries and territories, such as Europe, the Americas, Japan, South Korea and Southeast Asia.

Vietnam asks airlines to slash ticket prices as fuel costs plummet

Passengers could anticipate simultaneous airfare cuts by carriers in Vietnam in the near future as the country’s aviation watchdog has insisted that ticket prices be slashed in accordance with the falling fuel costs.

Airlines should offer more cheap-tickets and promotional programs to create more conditions for people to travel by air, the Civil Aviation Authority of Vietnam (CAAV) said in a fiat signed by deputy director Vo Huy Cuong.

Fuel costs normally account for 39.5 percent of the total expenditure of a carrier, so lower jet fuel prices mean less input expenses, according to a CAAV representative.

As jet fuel prices began plunging late last year, the Ministry of Finance has lowered the ceiling for airfares of the economy class on domestic flights from VND5,000 per passenger per kilometer to VND4,250, starting January 1 this year.

The price of Jet A1, the most commonly used fuel for commercial aviation, in Asia averaged US$57 a barrel in August, or a 32.7 percent drop against the $84.7 a barrel rate recorded in December 2014, according to data obtained by Tuoi Tre (Youth) newspaper.

Representatives of some airlines confirmed to Tuoi Tre on Sunday that the lower fuel costs will affect the airfares of their domestic services in the future.

The current plane ticket prices for domestic services are in fact 15 to 18 percent lower than those of this time last year, they added.

Airlines see the falling jet fuel prices as a chance to increase their competitiveness with the airfare cuts.

“Carriers currently keep the average prices of [domestic] services at relatively low rates due to competition pressure,” Le Hong Ha, CEO of no-frills carrier Jetstar Pacific, told Tuoi Tre.

In 2014 a ticket for the Ho Chi Minh City – Hanoi service, one of the busiest among Vietnam’s domestic routes, cost around VND1.1-1.2 million ($49-54), but the fares in late August and early September 2015 are only VND750,000-800,000 ($33.48-35.71), Ha revealed.

“The fuel cost for this two-hour service is as high as VND450,000-500,000 [$20-22] a ticket,” he added.

Tax late payment fines waived

The Ministry of Finance is drafting a resolution it will send to the National Assembly (NA) on debt forgiveness for late payment fines on taxation to remove difficulties for certain organizations and individuals, which is expected to be passed at the 10th meeting of the 13th session of the parliament in October.

The NA will decide on removing late payment fines on taxation incurred prior to July 1 2013 for firms in difficulties who pay the original tax debt before December 31, 2015.

Those entitled to the policy must meet the two following criteria.

First, enterprises must provide products or services that are paid from the State budget but are yet to be paid. They would therefore be unable to pay taxes before January 1 2015 and are yet to have new a deadline for payment.

Second, a partner of the taxpayer must have has gone bankrupt or breached the contract, which lead to the tax debt and late payment fines.

The draft policy will also remove late payment fines on tax debts accumulated before July 1, 2013 for taxpayers who dissolved their business or went bankrupt but have not been located by authorities.

It is expected that after the resolution is passed by the NA the government will provide details on implementation.

SCIC divesting from Vacopharm

The State Capital Investment Corporation (SCIC) has announced it will sell its 2.19 million shares, representing 48.57 per cent, in the Vacopharm Pharmaceutical Joint Stock Company (Vacopharm) at the Vietcombank Securities Company in Ho Chi Minh City.

Vacopharm’s employees have the right to buy 1.59 million shares, while the remaining 656,000 shares will be sold publicity at an offering price of VND38,500 ($1.71) per share, with a par value of VND10,000 ($0.44).

Registrations to purchase are open until 9am on September 30.

The minimum purchase is 100 shares and the maximum 656 shares.

Vacopharm recently increased its charter capital from VND28.35 billion ($1.26 million) to VND45 billion ($2 million), while its total assets stand at VND241.32 billion ($10.73 million).

Credit growth doubles in first eight months

The Credit Department at the State Bank of Vietnam (SBV) has recently released a report on the credit situation in Vietnam.

As at August 25, total credit in the economy had grown 9.54 per cent against the same period in 2014, when it was 4.33 per cent.

Credit flowed strongly to priority sectors identified by the government.

Credit to agriculture and rural development provided by financial institutions (excluding the Vietnam Bank for Social Policy and the Vietnam Development Bank) as at the end of August was estimated at VND811.63 trillion ($36.1 billion), an increase of 9 per cent since December 31, 2014.

Meanwhile, credit to the export sector was VND184.59 trillion ($8.21 billion), an increase of 4.99 per cent, to the high-tech equipment sector VND25.614 trillion ($1.13 billion), up 29.12 per cent, to support industries VND110.62 trillion ($4.92 billion), an increase of 3.2 per cent, and to small and medium-sized enterprises (SMEs) VND976.72 ($43.45 billion), up 4.07 per cent against the end of 2014.

At the beginning of the year the banking sector set target of recording credit growth of around 13-15 per cent for the year and later increased it to 15-17 per cent. Many experts expect to see credit growth exceed 17 per cent for the year due to the tendency of credit to increase significantly in the fourth quarter.

Work stops on Long Bien Golf Course

The Long Bien Investment JSC has been asked to cease construction of the Long Bien Golf Course in Hanoi’s Long Bien district after a number of violations were discovered, under a direction from the Hanoi Department of Construction (HDC). Construction can only resume with the approval of city authorities.

HDC also directed the construction inspection team of Long Bien district, in cooperation with the Phuc Dong and Gia Thuy Ward People’s Committees, to regularly confirm that work on the project has ceased.

In an investigation conducted by HDC the construction of the golf course was found to vary widely from the approved detailed planning. It was to set aside 51,816 sq m for roads and other transport but only 27,518 sq m was in fact set aside.

The developer also built a five storey building, which was not included in the approved planning.

The golf clubhouse, which was approved at two storeys, is now three storeys. The maintenance area for the course was approved at 1,604 sq m but covers 4,709 sq m. The project’s wastewater treatment system, meanwhile, was approved to be on 2,593 sq m but only covers 1,240 sq m.

Long Bien Golf Course, located in Phuc Dong and Gia Thuy wards, has total investment of around VND1.81 trillion ($80.5 million). Construction of the 27-hole course, on an area of 119.19 ha, was expected to be completed this year.

An Phat to increase holding in Vinaconex 3 to 51%

At an Extraordinary General Meeting held on September 4, shareholders of the Vietnam Construction JSC No. 3 (Vinaconex 3) approved a report from the Board of Directors on increasing the holding of the An Phat Real Estate Investment Trading JSC in the company from 24 per cent to 51 per cent.

An Phat becomes the largest shareholder in Vinaconex 3, with shares totaling 4.08 million.

The shares will be sold to An Phat from existing shareholders without a public bid.

With an increased participation by An Phat, Vinaconex will boost its construction and investment activities in projects in Thanh Hoa and Thai Nguyen provinces and seek opportunities to strengthen its investment in Hanoi.  

Vinaconex also has plans to increase its charter capital from VND80 billion ($3.52 million) to VND200 billion ($8.8 million) by issuing 12 million shares.

Vinaconex 3 was established under a decision from the Ministry of Construction. It has developed a number of projects, including a residential project in Trung Van ward in Hanoi’s Nam Tu Liem district and a complex of housing, office space for lease, and schools at 310 Minh Khai Street in the capital’s Hai Ba Trung district, among others.

Established in 2012, An Phat has charter capital of VND500 billion ($22 million) and has developed projects in Thanh Hoa, including the Dragon Sea Hotel in Sam Son Beach.

Over US$9 billion trade deficit forecast next year

The Ministry of Industry and Trade has forecast that trade deficit will maintain less than 5 percent of total export turnover equivalent to US$9.05 billion in 2016.

The total export turnover is predicted to reach US$181.5 billion.

Basing on GDP growth of 6.5 percent, the ministry has predicted a year on year growth of 9 percent industrial production index.  Total retail sales of goods and service will jump 9.5-10 percent.

Electricity consumption demand is expected to increase 11.4 percent over 2015.

This year, total export turnover is likely to touch US$165 billion and imports to break US$173 billion, an increase of 17 percent over 2014. Trade gap is estimated to reach US$8 billion, accounting for 5 percent of total export turnover.

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