“If we cannot find capital for the Tien Sa Port expansion project, I will step down,” said Nguyen Huu Sia, general director of the Da Nang Port JSC when asked if he could arrange capital for the important project.

Sia refused to borrow capital from Japan’s ODA to implement the project on expanding Tien Sa Port in Da Nang City, saying that his company would seek capital itself.

Sia understands why the expansion project is important to Da Nang City. Huynh Duc Tho, Da Nang’s Mayor, told him that he must commit to find capital from other sources if he refuses ODA. 

With a rapid annual growth rate of 10-20 percent, the volume of goods expected to go through Tien Sa Port in the next five or six years would be 10 million tons per annum. This means that if the port cannot be expanded, it would get overloaded.

Sia said that it is now easy to seek capital for investment projects, if the projects are feasible.

“No need to worry about capital mobilization. Capitalists would offer capital at reasonable costs, provided that you can use the capital effectively,” he explained.

Nguyen Thu, chair of the Da Nang Port JSC, said the company needs VND1 trillion for the second phase of the project, while the company itself has 40-50 percent of capital needed.

Thu said Da Nang Port JSC refused ODA because of the anticipated risks from the exchange rate fluctuations. If he borrowed capital from ODA, the project would only kick off in 2016. Meanwhile, capital from domestic sources may allow it to begin in 2015.

A finance expert said he agrees with Sia that it was not difficult to find capital now, so it would be better to ease the reliance on foreign sourced capital and ODA, which is believed to have latent risks.

Dr. Le Dang Doanh, a renowned economist, noted that if Vietnam receives ODA from Japan, it would have to use Japanese consultants, Japanese contractors and materials to be imported from Japan instead of domestic ones. This would make ODA-funded projects more costly because of high transport fees.

Dr. Nguyen Duc Thanh from the Hanoi National University warned that ODA “is not a gift”, but “a debt Vietnamese will have to pay in the future”. 

Pham Chi Lan, also a renowned economist, noted that as Vietnam has become a lower middle-income country, it needs to try to gradually reduce borrowing from ODA.

Dat Viet