BUSINESS NEWS 14/5

Japanese multi-sector group to expand operation in Vietnam

The Japanese-based conglomerate Kyocera group considers Vietnam as one of its two most important production hubs in Asia and plans to expand its operation in the market, affirmed Yasunobu Sanda who oversees the company Japanese and Asian sections.

In an interview with the Vietnam News Agency, Sanda said the company has chosen Vietnam for its stable socio-political environment as well as abundant and hard-working workforce.

He stated these Vietnamese facilities will play a vital role in helping Kyocera push its revenue to 2 – 3 trillion JPY (18.5 – 27.7 billion USD) in the future.

In 2011, Kyocera invested 320 million USD in building production facilities making electrical components and printing devices in Vietnam. Since then, it has expanded the production scale annually.

As scheduled, 12 outstanding Vietnamese students will visit Japan this month to attend a cultural exchange hosted by the group.

Farmers in Binh Duong see bumper mangosteen harvest

Mangosteen farmers in the southeastern province of Binh Duong have had a bumper crop of mangosteen this season because of long periods of hot weather, low rainfall, and support from local authorities.

The province, one of the country’s largest mangosteen producers, has more than 1,000ha of mangosteen.

In Thuan An township, the province’s largest mangosteen area, crops in An Thanh, Hung Dinh and Binh Nham wards and An Son commune have increased by 15 – 20 percent against last year, according to orchard owners.

The harvest season for the fruit normally begins in lunar May and lasts for about three months.

In Thuan An township, mangosteen has been cultivated since the 19th century and is famous for its delicious taste.

Le Thi Kim Huong, who has a nearly 100-year old mangosteen orchard in Binh Nham ward, said the yield is expected to increase by 20 percent against last year.

Local authorities upgraded the irrigation system, which also helped produce higher yields, she said, adding that farmers had received funds from the local authorities to buy fertiliser.

The An Son Commune Agricultural Service Cooperative has 11 members growing mangosteen. Seven of the members grow mangosteen on a total area of 14ha under good agricultural practices (VietGAP) standards.

The cooperative has harvested more than 50 tonnes of mangosteen, up nearly 20 tonnes against last year. The co-operative’s mangosteen orchard earned a profit of about 200 million VND (8,590 USD) each.

Traders are buying mangosteen for 50,000 – 80,000 VND (2.2 – 3.4 USD) a kilogramme.

Tran Van Vien, owner of the An Son Agricultural Service Cooperative, said the province had promoted exports of mangosteen from An Son commune to China under official channels next month, but there are no mangosteens left for export.

Nguyen Thi Bich Dao, a fruit shop owner in Thuan An township’s An Thanh ward, said the price of mangosteen is normally high and stable compared to other fruits. Market demand is high.

In Dau Tieng district, farmers received a collective brand name for the district’s mangosteens last month.

The district’s Thanh Tuyen commune has about 220 households growing mangosteen. Of the households, nine are growing 6.6ha of mangosteen to VietGAP standards.

Planted in the commune 10 years ago, mangosteen has helped improve the lives of many local farmers.

Nguyen Thi Hung, deputy head of the province’s Plant Cultivation and Protection Sub-department, said that special policies had helped specialty fruit orchards.

In Thuan An, local agricultural officials have organised courses to provide fruit farming techniques for farmers, she said.

TCL plans to build two plants in Quang Ninh province

Multinational Chinese electronics firm TCL has registered to build two factories to produce speakers, headphones and other accessories in the northeastern province of Quang Ninh.

TCL is waiting for approval from the province. The two manufacturing plants would be located in the Dong Mai Industrial Park in Quang Yen district. Once in operation in May 2020 if all goes according to plan, they will create 2,000 jobs for local workers.

In the meantime, TCL’s secondary investors are studying other production facilities in the industrial park.

TCL announced the news at a meeting with the Quang Ninh People’s Committee this week, held to explore investment and co-operation opportunities at the province’s industrial parks.

Nguyen Van Thang, Chairman of the provincial People’s Committee, said the province would create favourable conditions for TCL and its secondary investors to carry out the projects.

However, Quang Ninh would not seek to attract investments at all costs, Thang said, but would instead promote selective FDI projects towards sustainable development and environmental protection.

The province will give priority to projects using advanced and environmentally friendly technologies.

Established in 1981, TCL focuses on designing, developing, manufacturing and distributing electronic products, including television sets, mobile phones and other small electrical appliances. It has 22 production bases worldwide, employing 75,000 people and operating in 160 markets.

It entered Vietnam in 1999. In 2018, its sales rose by 50 per cent from the previous year and its television brand was the fourth largest in the country.

In February, TCL started construction of a new TV production plant in the southern province of Binh Duong with a total investment of 54 million USD. The factory is expected to serve the Vietnam, Southeast Asia, US and EU markets to meet the increasing demand for high quality TVs.

High-level Swiss delegation visits garment factory in Dong Nai

A high-level Swiss delegation toured a garment factory in the southern province of Dong Nai on July 12 to assess positive changes in working conditions and competitiveness of the country’s leading export industry and the fruits of the partnership between the Swiss government, Better Work programme and Vietnamese industry.

Swiss Federal Councillor, Guy Parmelin, Head of the Federal Department of Economic Affairs, Education and Research, led the delegation.

“We were thrilled to show our Swiss visitors improvements made to protect workers and boost production,” said Paula Albertson, Better Work Vietnam Programme Manager.

“Better Work demonstrates that compliance and social dialogue are good for business. This Swiss visit shows that compliance with international labour standards is demanded in the global economy,” he said.

Better Work Vietnam is a flagship programme of the International Labour Organization (ILO) and the International Finance Corporation to improve working conditions and boost competitiveness of the garment industry. The State Secretariat for Economic Affairs (SECO) of Switzerland is one of its main donors.

Since 2010, Saitex International Dong Nai Company has been part of Better Work Vietnam. The factory produces jeans and employs more than 4,000 employees.

The factory shared with the Swiss delegation factory improvements in efficiency, quality and working conditions made during their time collaborating with Better Work.

Better Work has been operating in Vietnam since 2009 providing compliance assessment, advisory factory visits and training services to deliver clear and continuous improvement at factories. The programme now covers 359 factories employing over 572,000 workers in the north and south.

Earlier, the Swiss Federal Department of Economic Affairs, Education and Research and the Department for Economic Zones Management under the Vietnamese Ministry of Planning and Investment (MPI) signed a cooperation deal on eco-industrial park (EIP) development in Vietnam.

Ho Chi Minh City needs 155,000 work hands for H2

BUSINESS NEWS 14/5

Ho Chi Minh City, the country’s biggest economic hub, will need about 155,000 workers for the rest of this year, according to a municipal forecast centre on human resources and labour market information.

The city will need about 75,000 workers for the third quarter and another 80,000 for the fourth, the centre said, pointing out that the fields that need work hands range from marketing, business, sales, engineering to banking, automobile, personnel management, electronics and chemicals.

Director of the centre Tran Thi Anh Dao elaborated that the second half of the year will be the time when enterprises and businesses need more human resources to boost their production and services to meet the rising demand during the festivals which often come in the period. Besides, they also need to complete their yearly orders while students will graduate from their education or take long vocations.

To stabilize and develop business and production, Dao held that firms should pay attention to workers so that they will have a chance to demonstrate their ability and to get promoted. On the other side, workers also need to raise their adaptability, improve their knowledge and expertise as well as their working quality, thus meeting their employers’ requirements.

According to the centre, the labour market in the city has so far this year seen a positive increase and changes suitable to the city’s development trend. Experts hold that the need for highly-skilled workers is rising, and the addition of graduates to the workforce has a role to play in the increasing competitiveness in the market.

Vung Tau city adjusts master plan

The People's Committee of Vung Tau city has adjusted a master plan for the city that was initially approved by the Prime Minister in May.

Under the adjusted plan, by 2035, Vung Tau will become a centre of tourism, trade, aquatic production, logistics, and oil exploitation, and become a key economic region in the south and Ba Ria-Vung Tau province.

Le Tan Quoc, Vice Chairman of the municipal People’s Committee, said the adjusted plan would be the initial step in the city's development.

Under the new plan, the city will be divided into seven areas, each with a different role in the development of the province.

The seven areas include a 4,100ha section of Long Son Island which will become a national oil and gas industry centre and supporting industry centre.

One area will be Go Gang Island, which will have an airport and eco-urban area, while another will be Bac Phuoc Thang area with a population of 35,000.

The current Sao Mai- Ben Dinh port will be expanded and upgraded, and another area, the central urban area of the city, will be embellished and rebuilt.

The area located in the north of the city will become a new administrative centre for the city, while the Chi Linh- Cua Lap coastal area will be developed into a resort and amusement area.

For the Front Beach area, the city will restrict large-scale projects to protect the natural landscape.

Nguyen Lap, Chairman of the Vung Tau City People’s Committee, said the city authority would publicise the adjusted plan so that people will not make unwise or illegal purchases of land.

The city will also review and adjust zoning plans and other detailed plans to match the master plan, and devise regulations for planning management.

The city also plans to build an expressway and railway from Bien Hoa city to Vung Tau city and upgrade National Route No.51, which connects HCM City and neighbouring provinces.

The city expects to have a population of 500,000 by 2025 and 650,000 by 2035.

Summer-autumn rice yield increases in southern region

The southern region expects to harvest an average of 5.66 tonnes of paddy per hectare in the current summer-autumn crop, 139 kilogrammes more than last year, according to the Ministry of Agriculture and Rural Development’s Plant Cultivation Department.

The region is entering the harvest season and estimates output will be around 9.24 million tonnes.

The region, which comprises the Mekong Delta and south-eastern region, has planted 1.64 million hectares, down 46,000ha from last year, with the delta accounting for 42,000ha.

Speaking at a seminar in Hau Giang province this week, Le Thanh Tung, deputy head of the department, said the 42,000ha in the Mekong Delta are now used to grow high–value crops or for aquaculture.

The switch was due to the low prices rice farmers got for the 2018-2019 winter-spring crop and the delay in the arrival of rains in some areas.

The southern region has increased the rate of high-quality rice varieties it grows in the summer-autumn crop.

Specialty and fragrant varieties account for almost 25 percent, high-quality varieties for 44 percent, medium-quality varieties for 19 percent, and other varieties including glutinous for the remaining 12 percent.

For the upcoming autumn-winter crop, the department is considering two options for the Delta: planting 750,000ha, up 9,380ha from last year, or 700,000ha.

If the latter is chosen, 30,000 will be left inundated during the Mekong flooding season and other crops and aquatic species will be raised on the remaining area.

Deputy Minister of Agriculture and Rural Development Le Quoc Doanh said the main criterion is not the area but the safety of the crop.

The autumn-winter rice should be grown in areas with flood-prevention embankments, he said.

The ministry’s relevant departments should do the task of forecasting weather and availability of water properly so that each locality can draw up appropriate planting schedules, he said.

They should counsel farmers to focus on high-quality and fragrant rice varieties to meet export demand, he added.

Ba Ria-Vung Tau starts to embrace organic farming

Luong Van Quang got started with organic farming two years ago to help feed his family.

Now, on an area of nearly 400sq.m in Long Huong district in the city of Ba Ria, Quang has set up a farm to experiment on different vegetables, from spinach and bok choy to bitter melon.

Over time, he has learned soil management is the key factor. The health of the soil must be cultivated and sustained to help the plants thrive and reduce the dependence on fertilisers.

Organic agriculture is labour intensive. Quang uses green manure and compost along with a specialised type of fungus to supply nutrients to the vegetables.

Worms must be picked off the plants by hand or killed using solutions made from natural ingredients – ginger, garlic and chilies marinated in alcohol.

Quang also needs to frequently switch between growing different types of plant to ensure healthy yields and nurture the soil for future crops.

In his first attempts, he struggled. “Productivity dropped, and the products turned out uglier than when using agrochemicals,” he said.

The soil, on the other hand, was gradually growing more fertile, boosting the health of his plants and protecting them against insects and disease, thereby reducing farming costs.

A new market for organic products has sprung up in the province, and 400kg of vegetables now brings Quang’s family a profit of 20 million VND (860 USD) per month.

The provincial department of cultivation and plant protection has chosen Quang’s farm to pilot the organic farming model since May 2017.

Chau Duc Cacao Cooperative in Xa Bang commune, Chau Duc district, is Ba Ria-Vung Tau province’s pioneer in organic farming on a large scale.

According to the co-operative’s director Ho Si Bao, since July 2017, farmers have received training courses on standardised organic cultivation to produce high-quality cacao beans.

An average hectare of cacao trees brings farmers a profit of 100 million VND (4,300 USD). They also signed an offtake agreement with Amazon Food Company, helping to guarantee a market for their crops in the future.

Cacao powder, butter, chocolate and cider made from the co-operative’s organic cacao beans have won the hearts of local people and opened the door to Japan’s market.

The provincial agricultural sector has also decided to make peppercorn a spearhead product to enter competitive markets in Europe and Japan.

A project aiming to develop the cultivation of indigenous peppercorn has been in progress since 2013 by the Ba Ria-Vung Tau province's Association of Pepper in cooperation with private companies on an area of 1,300ha in the districts of Chau Duc and Xuyen Moc.

Farmers that join the product are assisted in obtaining international certificates of sustainable cultivation including Global GAP or Rainforest Alliance certifications.

These efforts, however, are just a drop in the bucket, according to the provincial department of agriculture and rural development.

In the southeastern province, the use of fertilisers and pesticides has long been rooted in the minds of local farmers.

The switch to organic farming, therefore, cannot be completed overnight.

 

While they have found a place in the market, organic products still struggle to compete against cheaper traditional crops.

“It takes time and money to expand the area of organic farms and instruct farmers on sustainable practices, and to gain a foothold in the markets,” said the department's director Tran Van Cuong.

In April, the People's Committee of Ba Ria-Vung Tau province issued a decision to support organic agricultural production until 2025.

In the first phase from 2020 to 2022, five pilot projects on a total area of 1.9ha will be built to develop technical procedures to cultivate vegetables, peppercorns and cacao.

The area will be further expanded to 52.2ha from 2023 to 2025, on which seven other types of plants and fish will be tested.

The province will also develop and replicate models of certified organic agricultural production in its subsidiaries.

About 18.9 billion VND (812,700 USD) will be poured into this ambitious plan, of which 9.4 billion VND (404,200 USD) has been allocated from the local budget and the rest will be funded by private firms.

Bright prospects for Vietnam-Russia cooperation highlighted

Vietnam, as the first country to sign a free trade agreement with the Eurasian Economic Union, and Russia may discuss any cooperation projects, both bilaterally and multilaterally, said an official of the United Russia Party (ER).

Andrey Klimov, a member of the presidium of the ER General Council and Deputy Chair of the Federation Council Committee on Foreign Affairs, made the affirmation in an interview granted to the Vietnam News Agency (VNA) on the sidelines of a roundtable seminar for representatives from mass media in Asia-Pacific in Vladivostok, Primorye province, on July 12.

Lauding Vietnam’s role in the Association of Southeast Asian Nations (ASEAN), the official expressed his belief that in 2020 when Vietnam assumes the ASEAN Chairmanship, multilateral cooperation opportunities between Russia and ASEAN member countries will be discussed at forums in Hanoi.

The roundtable seminar, which was initiated by the ER on the basis of its agreements with political parties in Asia, including the Communist Party of Vietnam, also saw the participation of senior Russian officials.

Grigory Kuranov, Deputy Presidential Plenipotentiary Envoy in the Far Eastern Federal District, stressed that President Vladimir Putin has paid special attention to developing the Far East region.

Russia will open its doors and stands ready to directly provide official information in the fastest way for investors in the region, he said.

Deputy Minister for the Development of the Russian Far East, Sergey Tyrtsev, said the Far Eastern Federal District of Russia has attracted more than 25 percent of foreign investments in Russia, and its export-import values grew 25 percent in 2018.

Forty federal laws and 167 governmental legal documents have been adopted to create the most favourable conditions for investment activities in the region, he said, adding that local authorities have also offered tax incentives and built necessary infrastructure in an effort to attract more investors.

Over the past five years, the region has implemented over 1,600 new projects worth 530 billion rubles (roughly 8.4 billion USD), creating about 37,000 jobs, he said.

Vietnam proves popular among Thailand tourists

Tourists from Thailand made up the highest number of international visitors to the nation during the first half of the year with a growth rate of 45 percent.

The figures show that Thailand has surpassed the Republic of Korea in terms of growth rate of foreign visitors to the country. During the reviewed period, Vietnam received more than 245,000 arrivals from Thailand.

According to an annual report released by the General Statistics Office, Thai tourists are particularly keen to travel to popular tourism destinations in Vietnam such as such as Da Nang, Hoi An, and, Nha Trang.

Aside from the opening of several new air routes that connect major cities in Thailand to popular tourist towns in Vietnam, co-operation among ASEAN member states is also considered to be the key factor to strengthen source markets for Vietnam.

At present, the rate of tourists travelling between ASEAN nations makes up between 60 per cent to 80 per cent of the total inflow.

India looks into alleged steel dumping by Vietnam

India’s Directorate General of Trade Remedies has initiated an antidumping investigation into imports of flat rolled products of stainless steel from Vietnam and 14 other economies.

In a statement released last week, the Indian regulator said that the investigation was launched on July 3 after Indian steelmakers claimed the imports of these steel products had hurt their business.

The Indian Stainless Steel Development Association and three other Indian steelmakers called for the imposition of antidumping duties on the imports of these products from Vietnam and other countries.

In their complaint, they said there is no publicly available information or evidence of transaction prices or quotations from producers and no indicative prices of the products on the domestic market of Vietnam and five other markets.

In response, the Trade Remedies Authority of Vietnam has urged Vietnamese steelmakers to cooperate and submit the relevant information to the Indian authorities within 40 days, starting from July 3.

“If the investigative authority does not receive the information required, it could conclude the investigation with negative results for steel exporters,” the Vietnamese regulator noted in a statement.

The 14 other economies involved in the present investigation are mainland China, Hong Kong, Taiwan, South Korea, Japan, Singapore, Indonesia, Thailand, Malaysia, South Africa, Mexico, the United Arab Emirates, the United States and the European Union.

This is the third time this year that Vietnamese steel products have attracted dumping allegations, with two cases in India and one in Thailand.

Last week, the U.S. Commerce Department said that it would impose duties of up to 456% on certain types of steel produced in South Korea and Taiwan that are then shipped to Vietnam for minor processing and finally exported to the United States.

In a related development, India started a probe in May this year into the alleged dumping of digital offset printing plates from China, Japan, Korea, Taiwan and Vietnam based on a complaint by a domestic manufacturer.

The probe is being conducted by the Indian Directorate General of Trade Remedies based on an application filed by Technova Imaging Systems for the imposition of antidumping duties on imports of steel products from five countries.

If established that the alleged dumping activity has caused material damage to India’s domestic manufacturer, the Indian watchdog will recommend imposing antidumping duties on these imports.

NZ supports safe farming processes in Binh Dinh

La Lanh (healthy leaves) brand, one of the key components of the New Zealand Aid Program funded by the Binh Dinh Safe Vegetables Project (BDSV), was launched in the central province of Binh Dinh recently following several years of development.

According to a statement issued by the New Zealand Embassy in Hanoi, La Lanh-branded produce is now available for purchase for the first time at the Big C Quy Nhon supermarket, with a network of other outlets expected to stock the brand in the near future.

The brand promotes healthy, fresh vegetables produced in ways that improve safety for farmers and consumers and that protect the environment. Its products are grown using sustainable Good Agricultural Practices standards.

Launched in 2016, the BDSV project has been a multiyear collaboration between the governments of Vietnam and New Zealand. It has involved the participation of many scientists and technical experts from New Zealand and Binh Dinh Province, working closely with cooperatives and farmers.

The goal of the project is to improve the safety and economic and environmental sustainability of vegetable farmers and the safety of consumers in Binh Dinh and other provinces. The Binh Dinh Department of Agriculture and Rural Development and the New Zealand Institute for Plant and Food Research Limited are co-executors of the project.

Phan Trong Ho, director of the province’s Department of Agriculture and Rural Development, said that this is the first time La Lanh’s safe vegetables have been put on sale at Big C, Co.opmart and other stores in and around Binh Dinh. In the coming years, the brand is expected to expand its production sites and sell its produce widely through commercial channels across the country.

Sustainable agrotourism development discussed in Hau Giang

Hau Giang Province aims to become a green agricultural hub of the Mekong Delta region to attract visitors, heard attendees at a seminar themed “Jointly develop agrotourism,” held today, July 8, to seek the best ways of fulfilling this goal.

The provincial Party Committee has issued Resolution 09 on developing the province’s tourism until 2020, with a vision toward 2030, based on which the province has introduced Plan 100 and deployed a project to restructure the tourism industry.

Under the project, the Mekong Delta province is set to attract one million tourists by 2025, including 70,000 international arrivals, targeting more than VND1.4 trillion in total revenue and 4,200 jobs for local residents.

The seminar, co-organized by the Saigon Times Group, the provincial People’s Committee and the Broadcasting and Television of Hau Giang Province, was aimed at discussing ways to achieve these targets.

Speaking at the seminar, Dong Van Thanh, vice chairman of the Hau Giang government, noted that over the past five years of deploying Resolution 09, the province has focused on developing multiple key projects involving tourism infrastructure and tourism products. Local authorities have also sought to enhance State governance over tourism, expanded source markets, launched promotional activities and improved the quality of manpower to serve the tourism sector.

Party Secretary of Dong Thap Province Le Minh Hoan remarked that in Vietnam, due to the limited cultivation scale and agricultural production combined with other economic activities, agrotourism activities tend to be associated with sightseeing in the countryside and cultural experiences.

Travelers often visit tourist destinations to take sightseeing tours, especially those with peaceful countryside views, and to enjoy the locality’s culture and cuisine, which is required to be safe and ecofriendly, he stated.

Phan Dinh Hue, director of travel firm Viet Circle, explained that the Mekong Delta region should develop travel services; establish storytelling clubs; provide tourists with experiences of agricultural activities such as catching fish, shrimp and crabs; and diversify accommodation types, including homestays, farmstays, bungalows, resorts and hotels to make agrotourism more attractive.

Hue pointed out that Hau Giang Province boasts many advantages for the development of agrotourism, including many paths from which tourists can see the paddy fields, various fruit gardens and channels for water sports.

However, he noted that one of the major weaknesses in agrotourism development in the province is the lack of professional skills in the field of tourism, so training courses should be organized for officials and households.

Stiermann Martin, director of Ricefield Lodge, stressed that the province should build a tourism headquarters that is fully equipped with facilities such as training centers for organic agriculture, ecological tourism and local cooking to develop agrotourism.

“No matter what is done, protecting the environment is a priority,” Martin said, adding that when exploiting the tourism sector, it is necessary to use engines powered by renewable energy, which do not cause much pollution.

“Developing agrotourism should be combined with community tourism,” Nguyen Su, former Party chief of Hoi An City, remarked at the seminar, explaining that the communal development of tourism and protection and preservation of natural resources form the soul of tourism products. Besides this, the government’s efforts will also produce positive effects for agrotourism growth.

Nguyen Thi Ly, deputy director of the Hau Giang Department of Culture, Sports and Tourism, said that the number of tourists asking to visit the countryside to enjoy the peaceful atmosphere and sample clean, green dishes is on an upward trend, catalyzing efforts to develop the agrotourism field.

The agrotourism sector plays an important role in raising households’ incomes and reducing poverty, brings in various benefits to the local community, drives cultural exchange and raises people’s awareness of environmental protection.

Ly also touched on some bottlenecks facing the province during the process of agrotourism development, such as agrotourism activities being operated on a small scale; the lack of professional skills in tourism services among residents; unstable, small-scale agricultural production; poor traffic infrastructure; and weak tourism promotion activities.

Provincial Chairman Le Tien Chau said the seminar had provided useful information through the ideas and opinions offered by officials, enterprises, experts and farmers and many solutions for sustainable agrotourism development had been found.

In addition, Chau ordered the leaders of provincial departments and agencies to consider and apply the proposed solutions and study and select opinions on the process of agrotourism development.

Investors explain disinterest in ETC

Unreasonable regulations on revenue extraction to pay suppliers of electronic toll collection (ETC) systems and high installation costs are among the main reasons for four investors’ refusals to sign a contract appendix to install nonstop fee collection systems at build-operate-transfer (BOT) road tollgates.

Statistics from the Ministry of Transport show that as of July 5, 40 investors had signed the contract appendices, but the remaining four investors have yet to negotiate with the ministry to sign the contract appendix to install ETC systems.

The four investors are Phuoc Tuong-Phu Gia BOT Joint Stock Company, the investor in the Bac Hai Van tollgate; 194 Construction Investment Corporation, the investor in the Cam Thinh BOT tollgate; Duc Long Gia Lai BOT and BT JSC; and Can Tho-Phung Hiep BOT Company.

The investors explained that they did not object to the plan to install ETC systems but were opposed to the ratio of revenue being extracted to pay suppliers of nonstop fee collection services.

Speaking at a conference held by the Association of Investors in Vietnam Road Traffic Works on July 8, a representative of one of the four investors said that the previous charge was calculated based on the revenue from automated-only lanes, but under the new plan, the fee will be extracted from the revenue of nonstop lanes and lanes with manual toll collection. This was an unreasonable calculation, the representative added.

The projects are required to extract 2%-4.5%, or even 7%, of revenue to pay the suppliers of ETC services, whereas the revenue of BOT tollgate projects was not enough to cover bank loan payments. As such, these investors proposed recalculating the fee for the suppliers of nonstop fee collection systems.

Besides this, the companies complained about installation costs, stating that the installation costs would increase the financial commitments of these projects by hundreds of billions of Vietnamese dong and would extend the fee collection period by one to two more years.

The firms said that they want to negotiate with the suppliers of ETC systems for the charge rather than pay them based on the revenue ratio as regulated by the ministry.

In addition, these investors were also concerned that the nonstop fee collection could be conducted through intermediary payment services, leading to potential risks in the processes of money transfer and data management.

On July 8, the Ministry of Transport informed the media that it is negotiating with the four investors to ensure the signing of contract appendices takes place prior to July 10 to have ETC systems installed at 44 BOT tollgates in 2019.

After working with the four investors at a meeting on July 8 to remove bottlenecks in the negotiation of contract appendices, Deputy Minister of Transport Le Dinh Tho proposed the Directorate for Roads of Vietnam recalculate the extraction ratio to guarantee the interests of investors and suppliers.

Tho pointed out that the total investment in ETC system installation at 44 BOT tollgates nationwide during the first stage is VND1.7 trillion.

The deputy ministry also said that road investors would only hand over some lanes, not the entire tollgate, to ETC service providers to conduct automated fee collection. All staff and assets of the tollgate are still under the management of the road investors.

Besides this, the Ministry of Transport asked the directorate to recall the announcement of fee collection suspension at the four tollgates, whose investors have yet to sign a contract appendix to install ETC systems, to avoid affecting the investors’ toll collection.

Hanoi seeks US$98 million in on-lending funds to operate railway

The government of Hanoi City plans to borrow some US$98.35 million from the on-lending fund of the central Government to put the long-delayed Cat Linh-Ha Dong Urban Railway project into operation.

The People’s Committee of Hanoi City submitted its on-lending proposal to the municipal People’s Council for consideration on Monday, reported the local media.

The US$98.35-million loan, which is expected to be sourced from the foreign loan funding of the project, will be used to purchase automated ticket controllers, equipment for train maintenance and locomotives and will cover training costs and technology transfers.

Central agencies have agreed to authorize the Railway Project Management Board, under the Ministry of Transport, to sign an agreement to borrow the amount from foreign sources at an interest rate of 4% per year, according to the committee.

If the debt is not paid on time, the Hanoi authority must pay a late fee equal to 150% of the re-lending interest rate, applicable to the overdue days. The loan principal and interest will be paid every six months.

The funding needed for the railway project has risen fivefold compared with the initial estimate of VND8.7 trillion in 2008, reaching a staggering VND47 trillion.

The railway stretches more than 13 kilometers with 12 stations, starting from Cat Linh Station and ending at Yen Nghia Station. It is expected to accommodate 13 trains, with four carriages each, with the interval of three to five minutes between trips.

Danang travel firms debate mandatory tour prices

The central city of Danang has added tourism services to a portfolio of goods and services whose prices must be publicized to combat revenue losses and bring low-cost tour activities under control, according to travel companies.

Over 270 local and international travel firms and 46 branches of international tour operators currently active in the city will have to issue price lists for their full or partial tour packages and provide them to the competent agencies, starting next month, following an announcement released on July 3 by the municipal People’s Committee.

The Danang Department of Finance, which suggested the issuance of these lists, will team up with taxation and market surveillance agencies to enforce the requirement.

Le Tan Thanh Tung, deputy general director of travel firm VITOURS, told the Saigon Times that tour operators like VITOURS have had to publicize their tour prices for a long time, allowing the competent agencies and customers to stay updated.

Regarding the new regulation, Tung said his firm was waiting for further instructions. He predicted that the regulation might be intended to manage budget tours and ensure fair competition on the local tour market.

Many travel firms are fiercely competing to offer tours at low prices. Some have even offered tours at rates much lower than the market value, undercutting others.

Similarly, Doan Hai Dang, director of Vietravel Danang, told the paper that he did not understand the intended goal of the new regulation. Vietravel has been updating its tour prices on its website and social media platforms for a long time, so the new requirement is easy to meet, he said.

Nguyen Ngoc Anh, director of Omega Tours, suggested that the regulation may target budget tour operators, chiefly from the Chinese and South Korean markets.

Making tour prices transparent is the right thing to do, according to travel agencies.

However, the regulation, if introduced without specific instructions, may have a negative impact on travel firms, they said. Prices of tours can vary based on the prices of relevant services such as dining, sightseeing, and accommodations.

A travel firm could offer tours to customers at prices that differ from those on its price list, since there may be unexpected changes to the prices of additional services. It is unclear whether the firm would be fined in this situation, according to tour operators.

Responding to the concern, Cao Tri Dung, chairman of the Danang Travel Association, admitted that providing tour prices to State management agencies is already a common practice. The association will provide further guidance in the coming days, he said.

Meanwhile, a representative of the Danang Tourism Department said that it will host a meeting gathering the relevant parties to help travel firms get deeper insight into the regulation.

 
 
 
 
 
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