VIETNAM BUSINESS NEWS AUGUST 2709:37 VN-Index drops 0.64% as heavyweights dive The VN-Index of the Hochiminh Stock Exchange finished 0.64% lower at 1,301.12 points on August 26 after a session that saw many heavyweight stocks perform poorly. There were 189 winning stocks and 180 losing ones. The southern bourse saw 524.3 million shares worth some VND17.76 trillion changing hands, increasing slightly in volume and over 7% in value compared with the previous session. More than 26.4 million shares worth VND1 trillion were traded in block deals. Many stocks in the VN30 basket sagged. Real estate development company PDR and jewelry company PNJ suffered the steepest declines, down 3.8% to VND83,500 and 3.1% to VND86,200, respectively. Most bank stocks lost ground, with CTG, TPB, BID, MBB, TCB and ACB losing 1.5-3%. VCB, VPB, STB and HDB fell slightly. Other major stocks that dragged the market down included VIC, GAS, HPG, SSI, PLX and NVL, which declined 1.1-1.7%. Only some bluechips such as GVR, POW, MWG, SAB, VNM and VRE rose, but by less than 1%. Meanwhile, small and medium stocks performed positively. Transport and logistics stocks GMD, VNL, STG, MHC and TCL surged 3.7-6.7%, while VOS, VTO and HAH shot up to the ceiling prices. Among fertilizer stocks, DCM, DPM and BFC were the biggest gainers, soaring 4.1% to VND24,150, 5.6% to VND35,800 and 2.7% to VND34,450, respectively. Refrigeration electrical engineering firm REE and water environment company BWE shot up to the respective ceiling price of VND62,100 and VND40,200. Lender CTG led the southern bourse in terms of liquidity with more than 21 million shares changing hands. Other actively traded stocks were POW, SSI, MBB, STB, VHM and HPG with between 11.87 million and 13.85 million shares changing hands each. On the Hanoi Stock Exchange, the HNX-Index rose 0.25%, or 0.85 points, to end at 336.85 points, with 94 gaining stocks and 97 decliners. There were over 118.6 million shares worth some VND2.96 trillion changing hands. The major contributors were lender SHB, investment and trading company TNG and real estate company DXS, which surged 2.5% to VND28,200, 6.5% to VND31,200 and 4.9% to VND28,500, respectively. Besides, fertilizer firm LAS rose 2.5% to VND16,800 and port operator PHP shot up to the ceiling price at VND30,900. The worst performing stocks were PVS, SHS, TVB, PAN and BVS, falling 2.1-6.3%. SHB led the northern market in terms of liquidity with 28.39 million shares changing hands. FDI disbursement rises 2 percent in first eight months
Disbursement of foreign direct investment (FDI) capital in Vietnam hit 11.58 billion USD this year to August 20, an increase of 2 percent compared to the same period last year, according to the Ministry of Planning and Investment. The ministry said 1,135 new projects were granted investment licences in the period, plunging 36.8 percent against the same period last year. However, total registered capital was up 16.3 percent to nearly 11.33 billion USD. About 640 existing projects had their capital adjusted up by a total of nearly 5 billion USD, up 2.3 percent year on year. Capital contributions and share purchases by foreign investors fell 43.4 percent to 2.81 billion USD. Foreign investment was poured into 18 sectors, with processing and manufacturing absorbing the largest amount, with 9.3 billion USD, or 48.4 percent of the total FDI inflow in the 8-month period. Power generation and distribution followed with nearly 5.5 billion USD, while real estate attracted 1.6 billion USD and wholesale and retail sales 734 million USD. Of 92 countries and territories investing in Vietnam during the period, Singapore took the lead with more than 6.2 billion USD, followed by Japan with more than 3.2 billion USD and the Republic of Korea (RoK) with 2.4 billion USD. The Mekong Delta province of Long An led in attracting FDI with over 3.6 billion USD, Ho Chi Minh City came second with about 2.2 billion USD, and its neighbouring province of Binh Duong was third with 1.7 billion USD./. The US announced a $36-million project to help Vietnam develop clean energy The US government announced the Vietnam Low Emission
Energy Programme II (V-LEEP II), a five-year, $36-million project which aims
to accelerate Vietnam’s transition to a clean, secure, and market-driven energy
system. The project is part of several initiatives announced during the visit of American Vice President Kamala Harris to Vietnam. According to the White House, the American vice president and the Vietnamese government, as well as civil society leaders, agreed on the importance of combatting the climate crisis, increasing resilience, and collaborating towards a clean energy future. Leveraging the private sector in climate action, USAID and the Vietnam Chamber of Commerce and Industry (VCCI) signed an MoU to boost Vietnam's competitiveness, expand market opportunities for US companies, and strengthen Vietnam’s environmental policy. This MoU with VCCI will improve the focus on sustainability, green technology, and climate change combatting. USAID also intends to support VCCI in developing a green index to help US businesses select provinces that are investing in green operations. Through USAID, the US government launched the Mekong Coastal Habitat Conservation project, a new three-year, $2.9-million project with the International Union for Conservation of Nature aiming to protect key coastal habitats in the Mekong Delta region for sustainable fisheries, climate change adaptation, and biodiversity conservation. The US government also welcomed that Vietnam is joining the Agricultural Innovation Mission for Climate (AIM4C), an initiative announced at President Biden’s Leaders’ Summit on Climate that will be launched at COP-26 in November. AIM4C participants will work together to accelerate global agricultural innovation and the adoption of climate smart technologies. Together, the US and Vietnam, along with other global partners, can address shared climate challenges and create innovative solutions to improve food security and drive economic growth around the world. Vietnam, Middle East seek new approaches in investment cooperation A webinar themed “Fostering investment cooperation between Vietnam and the Middle East: potential, opportunities and new approaches” was held in Hanoi on August 26. This is the first time the Ministry of Foreign Affairs has coordinated with the Ministry of Planning and Investment (MPI) to organise an online seminar to discuss overseas investment trends and policies of countries in the Middle East, as well as Vietnam’s potential, and seek ways to improve the efficiency of investment cooperation between the sides. The event brought together more than 300 delegates from ministries, agencies, research institutes, representative offices, businesses, associations, investment funds and localities of Vietnam and Middle East countries. Deputy Minister of Planning and Investment Nguyen Thi Bich Ngoc said Vietnam has substantial potential and advantages to attract investments from the Middle East, and expressed her belief that investment flows between the two sides will expand sharply in the time ahead. She suggested connecting Vietnamese enterprises and localities with Middle East investment funds, creating conditions for Middle East firms to import more goods from Vietnam, encouraging Vietnamese enterprises to build supply chains in the Middle East and facilitating the multi-party investment cooperation model. Vietnam stands ready to open its doors for Middle East investors, the official stressed. Delegates pointed out challenges facing Vietnam in attracting investments from the Middle East such as a lack of information about the market, business practices and investment encouragement and protection agreements between Vietnam and certain countries in the region, along with difficulties caused by the COVID-19 pandemic to investment promotion and attraction. To improve the efficiency of investment cooperation, many suggested the two sides seek new, flexible, and more effective approaches like diversifying investment forms, setting up joint investment funds, completing the legal framework, intensifying connectivity, staying updated on investment incentives, improving business environment, and rolling out good investment attraction models on a larger scale. Deputy Foreign Minister Pham Quang Hieu pledged that the foreign ministry will closely coordinate with the MPI and other ministries, agencies and localities to support businesses in promoting bilateral investment partnerships in an effective and pragmatic fashion. Accordingly, efforts will be made to boost information exchange and investment promotion, as well as the signing of some investment encouragement and protection deals between the two sides. The Vietnamese Government is committed to creating an open, favourable and fair business environment for foreign investors, including those from the Middle East, he said./. Eighth-month FDI registered capital reaches over US$19 billion Vietnam attracted US$19.12 billion in foreign direct investment (FDI) capital by August 20, equivalent to 97.9% compared to the same period last year, according to statistics released by the Ministry of Planning and Investment. FDI inflows include newly-registered and adjusted capital, along with capital contributions and share purchases made by foreign investors. Despite the complicated nature of the COVID-19 pandemic in localities nationwide, the disbursement of FDI projects during the initial eight months of the year saw an annual rise of 2% to US$11.58 billion. Currently, Vietnam has 1,135 new projects capitalised at approximately US$11.33 billion, an increase of 16.3% against the same period last year, while 639 projects have adjusted investment capital of roughly US$5 billion, marking a rise of 2.3%. Elsewhere, capital contributions and share purchases made by foreign investors stood at US$2,81 billion, representing a decline of 43.4% compared to last year’s corresponding period. The capital inflows cover 18 sectors, in which processing and manufacturing took the lead with nearly US$9.3 billion, followed by electricity generation and distribution with US$5.5 billion. Meanwhile, the property, wholesale, and retail sectors attracted a total registered capital of nearly US$1.6 billion and over US$734 million, respectively. Among the 92 countries and regions with newly-licensed investment projects in Vietnam, Singapore made up the largest source of registered capital with over US$6.2 billion, thereby accounting for 32.5% of the total. This was followed by Japan with over US$3.2 billion and the Republic of Korea with US$2.4 billion. During the reviewed period, foreign financiers invested in 58 provinces and cities throughout the country, in which Long An province took the lead, attracting nearly US$3.6 billion, followed by Ho Chi Minh City with nearly US$2.2 billion, and Binh Duong with roughly US$1.7 billion. Affordable housing in HCMC is out of reach for low-income earners Over five years ago, the price of a house in Ho Chi Minh City was VND15 million (US$ 655.75) per square meter but it has surged to nearly VND30 million per square meter. Therefore, affordable housing in the southern metropolis is out of reach for low and average-income earners. After graduating from university, a man named Quang worked at a state company in HCMC. His average income is about VND 10 million a month, plus his wife's income is as same as his. The couple has nearly VND1 billion from their savings and parents’ support; therefore, they thought they can buy an apartment in the city. Quang went to an old apartment building in the South Saigon area such as Hoang Thap, Hong Linh, Him Lam. An apartment with an area of 65 square meters is worth VND2 billion. Three years ago, Quang decided not to buy while the price was VND1.6 billion because he was afraid of paying high interest, but now it has jumped to more than VND2 billion. Furthermore, a 100 -square -meter apartment in the New Saigon building cost VND1.8 billion at that time, it is now VND2.3 billion. Worse, new housing projects cost over VND40 million per square meter; for instance, an apartment with two bedrooms is sold at VND3 billion. In fact, he can afford an apartment of about 40 square meters in the east of Ho Chi Minh City. However, the apartment is located near Suoi Tien tourist area in District 9, he finds it inconvenient to go to work. So many people have registered to buy social housing projects while construction projects were too few, and he didn't know when it would be his turn. Quang is one of many people with an average income in Vietnam’s major cities who are seeing their dream of homeownership slip away as prices increase every year and the supply of affordable housing has almost disappeared from the market. Affordable apartments are those that are priced under VND20 million per square meter, according to the Ministry of Construction. According to the latest report of the Ministry of Construction, in the second quarter of 2021, Ho Chi Minh City has only two affordable apartment projects, namely The East Gate in Thu Duc City, which costs about VND27 million per square meter, and the Tecco Town project in Binh Tan District with VND24 million per square meter. However, two other housing projects including the East Gate project and the Tecco Town project at 45 Tan Lap Street in the Southern Province of Binh Duong’s Di An City with areas from 32.5 to 69.7m2 are put up for sale at nearly VND30 million per square meter. The East Gate is currently under construction while the Department of Construction confirmed that the Tecco Town project was eligible to sell apartments. The project has officially handed over the house since mid-2018 and in 2019 the investor continues to hand over the entire apartment to customers. Currently, the project costs about VND 27 million per square meter. Generally, in the second quarter, there were no more affordable housing projects in the southern largest city. The Ministry of Construction announced more apartments fluctuating from VND30 million up while the affordable segment barely exists in the market despite large demand. A sharp decline in supply has made it more challenging for low-income people to afford a house. Ngo Quang Phuc, General Director of Phu Dong Company said six years ago the company’s first project comprising 2-bedroom apartments was sold at VND 1.2 billion, it is now VND2.4 billion while the apartment was VND1.5 billion in 2018, it's now VND2.3 billion. Why do house prices increase? Because, input costs have increased sharply; land prices and construction materials prices have also leaped while project investors must wait longer for approval, resulting in increased interest expenses by 15 percent each year. This house price includes all the above-mentioned fees, therefore, it cannot be lower. Being a real estate expert, Professor Dang Hung Vo said that speculation has made the market always hot. The State must enact a property tax to eliminate speculation. The more houses a person owns, the higher they pay for the land tax. Once people realized that investment in real estate is no longer profitable, the market will cool down and it is high time to develop affordable housing. US investors pin high hopes on Vietnamese market US companies are seeing Vietnam as a "land of hope" following US Vice President Kamala Harris's visit to the Southeast Asian nation from August 24-26, reported the Vietnam Investment Review. Chad Ovel, Chairman of the American Chamber of Commerce in Vietnam in Ho Chi Minh City (AmCham Vietnam-HCMC) said Harris choosing Vietnam for her first visit to Asia showed the US appreciates security cooperation and economic partnership with Vietnam. Many US-based conglomerates like Pfizer, Abbott Laboratories, Intel, Qualcomm, UPS, and Mastercard are increasing their investment in Vietnam with optimism about the market. Russell Reed, Managing Director of UPS Thailand & Vietnam, considers Vietnam among the fastest growing market in the region which opens up potential import-export opportunities amid the rise of digital economy and trans-border e-commerce. UPS have been invested in Vietnam for over 25 years. The Vietnamese Government supports extensive international economic integration and foreign investment, Reed said, pointing to the nation’s signing of the EU-Vietnam Free Trade Agreement (EVFTA) and Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The UPS is looking for Vietnam’s ratification of the Regional Comprehensive Economic Partnership (RCEP) in late 2021, he added. Winnie Wong, Country Manager of Mastercard in Vietnam, Cambodia and Laos, said Vietnam is a key market in the company’s development plan. Mastercard is committed to building a cashless market in Vietnam, she noted. Recently, Vietnamese conglomerate Vingroup has signed an agreement with Arcturus Therapeutics Holdings Inc. of the US on the transfer of COVID-19 vaccine production technology. With a capacity to manufacture 200 million doses per year, Vingroup is projected to produce the first batches of vaccine by early 2022. Under the agreement, the US firm will grant permission ot Vingroup’s affiliate VinBioCare to produce COVID-19 vaccine named VBC-COV19-154, which is effective against new variants of the coronavirus such as Delta and Alpha. The Vietnamese company is also approved to manufacture other COVID-19 vaccine types of Arcturus like ARCT-021. The American Apparel & Footwear Association, which represents over 1,000 retailers and producers, has just sent to US President Joe Biden a letter calling for increasing vaccine distribution for Vietnam. Meanwhile, AmCham has been actively proposing the Biden administration make Vietnam a prioritised recipient in its vaccine sponsorship programme./. People entering Cat Lai, Hiep Phuoc ports must have negative Covid test People are required to show a negative Covid PCR or rapid antigen test certificate conducted within 72 hours before they enter the Cat Lai and Hiep Phuoc ports in HCMC and the warehouse zone there from August 27, according to the Saigon New Port Corporation, which operates the ports. The Saigon New Port Corporation has sent the requirement to shipping lines and shipping line agents as part of the port operator’s efforts to tighten Covid infection prevention and control and ensure smooth operations at the ports. Commenting on this requirement, Nguyen Chanh Phuong, vice chairman of the Handicraft and Wood Industry Association of HCMC (HAWA), said that the requirement is appropriate amid the current complicated development of the pandemic in HCMC, as compliance with the requirement would help ensure safety at the ports. The HAWA representative added that if the ports are exposed to risks of Covid transmission, this would affect import-export activities and result in a shortfall of stevedores, and the huge container backlogs facing the Cat Lai port one month ago could recur. The two ports have continued to receive vessels that registered to dock at the ports periodically as usual, even though the ports are facing a number of obstacles. According to the operator of the ports, forwarding activities remain in operation at the Cat Lai port at present. Besides, on the upcoming National Day on September 2, the Saigon New Port Corporation will continue to receive vessels and offer services such as cargo handling. Clarity offered through auto industry tax proposals The Ministry of Finance’s proposal on tax incentives
for domestically-produced cars beyond 2022 could contribute to aiding the
local automobile and supporting industries. Tax incentives for imported auto parts are generally one of the most important preferential schemes for car manufacturers in Vietnam, enhancing competitiveness for local car assemblers. However, production capacity is one of the main criteria for local companies to enjoy the tax incentive programme. According to industry insiders, the incentive could help enterprises increase production capacity, set plans to continue to invest in new production lines in Vietnam, and resume production and reassemble a number of models that had previously ceased production in Vietnam. In 2020, most car manufacturers in Vietnam achieved minimum overall output, including Toyota, Hyundai Thanh Cong, Truong Hai Auto Corporation, and VinFast. According to the Vietnam Automobile Manufacturers Association, some automakers such as TC Motors and VinFast have reached a minimum overall output of 11,500 units for six months as the main criteria set by the Ministry of Finance (MoF) to enjoy the tax, in which, Hyundai Thanh Cong has more than 29,000 units, Kia more than 21,500 units, VinFast nearly 16,000 units, Toyota with more than 14,500 units, and Mazda over 13,300 units. Nguyen Thi Tue Anh, deputy director of the Central Institute for Economic Management, said that the continuously increasing import volume shows that the demand for car consumption is still on the up. “Compared to Thailand or Indonesia, the cost of producing cars in Vietnam is high. Therefore, local authorities need to find solutions to reduce these costs and promote the development of supporting industries,” Anh said. Although the current pandemic remains complicated, the number of cars imported to Vietnam in July 2021 still hit high figures. The number of completely-built-up (CBU) cars imported was estimated at around 17,000 vehicles with a turnover of $332 million, according to the General Department of Vietnam Customs. In the first seven months of 2021, the number of CBU cars imported to Vietnam reached about 98,000 units with a total turnover of $2.1 billion – an increase of 116.9 per cent in volume and 111.4 per cent in turnover on year. Vietnam mostly imports cars under nine seats from Thailand and Indonesia that account for 80 per cent of total imported CBU cars. Pham Van Dung, general director of Ford Vietnam, said that domestic car manufacturers have not yet met the price competitiveness factor because most of the components and accessories are still imported. Only a few components are produced domestically, but the production capacity is not large enough to ensure a good price. “The cost of producing and assembling cars in Vietnam is about 20 per cent higher than other countries in the region,” Dung said. Meanwhile, Le Ngoc Duc from Huyndai Thanh Cong said that without a supportive policy, the goal of increasing market volume and the localisation rate will be hard to reach. According to the MoF, between 2018 and 2020, the government issued a number of preferential policies on import tax for auto components and raw materials and supplies for auto production. These contributed to ironing out issues and promoting domestic production with supporting industries for the sector. Last year the government issued Resolution No.115/NQ-CP on developing supporting industries. By 2025 Vietnamese enterprises should be able to manufacture highly-competitive spare parts that can satisfy 45 per cent of essential production, and will account for some 11 per cent of the production value of the entire industrial sector. Pangasius exports to China continue to drop due to trade barriers Vietnamese pangasius exports to China are forecast to keep decreasing in the third quarter of the year as the northern neighbour is continuing to raise trade barriers and tighten its control of border gates as part of efforts to combat COVID-19. According to the Vietnam Association of Seafood Exporters and Producers (VASEP), the country’s total export value of pangasius to Hong Kong (China) during the opening seven months of the year fell by 5% to more than US$238 million in comparison to the same period last year. Seafood and pangasius exports to the demanding market also faced numerous difficulties in the first half of the year as a result of Chinese policies aimed at restricting the import of seafood products from foreign markets. As one of the major Chinese transshipment hubs, Zhanjiang port temporarily suspended frozen food imports from Vietnam market and 10 other Asian countries from June 20 to July 15 due to the implementation of COVID-19 prevention measures hitting its loading capacity. Since the second quarter of the year the export value of local pangasius to the Chinese market has endured a downward trajectory of between 0.8% and 11.4% against the same period from last year. This decline can also be attributed to concerns among Chinese consumers about getting infected by COVID-19 from imported seafood products, thereby leading to an increase in domestic seafood consumption. According to the VASEP, providing that the pandemic is brought under control in the Mekong Delta region, pangasius exports to the markets will become stable ahead in the remaining months of the year. Despite this, the price of raw pangasius in the Mekong Delta during the next quarter is likely to continue fluctuating. Aseana Properties Ltd. sells assets in Vietnam for $95 million Aseana Properties Ltd. is selling its stakes in two properties in Vietnam to its joint venture partner in a deal worth roughly $95 million. Aseana Properties Ltd., a property developer active in Malaysia and Vietnam which is listed on the London Stock Exchange, announced that, following a competitive bidding process, it has signed a binding agreement to sell its interests in both the City International Hospital and the adjacent International Healthcare Park in Ho Chi Minh City to its joint venture partner, the Hoa Lam Corporation. Following these sales, the company will have no assets in Vietnam and concentrate on realising its remaining four assets in Malaysia. The gross sales price of the transaction is estimated at around $95 million, and under the terms of the agreement, the buyer will settle all bank debts owed on these two assets. Completion of the transaction is expected to take place over the next few months, subject to approvals from regulatory authorities as required. A further announcement will be made upon completion and the receipt of net proceeds by the company. In 2019, Aseana Properties already put its stakes in the City International Hospital up for sale, as the hospital has continuously made losses since it commenced business in 2014. The hospital is one of six hospitals developed within the High-tech Healthcare Park initiated by Hoa Lam-Shangri-La Healthcare LLC, a joint venture established by Vietnam’s Hoa Lam Services Co. Ltd. and Singapore’s Shangri-La Healthcare Investment Pte. Ltd. in 2008. Vietnam to have additional 18 railway routes by 2050 Seven current railway routes are being upgraded in the 2021-2030 period. Vietnam national railway network would have another 18 major routes with a length of more than 3,00km by 2050. With 18 new routes, the national railway network will have 25 major lines with a total length of 6,409km, according to the draft planning on railway development in the 2021-2030 period with a vision to 2050 submitted by the Ministry of Transport (MoT). Among 25 major routes, seven existing routes with a length of nearly 2,500km are Hanoi-Ho Chi Minh City, Hanoi-Lao Cai, Hanoi (Gia Lam Station)-Haiphong, Hanoi (Dong Anh Station)-Thai Nguyen (Quan Trieu Station), Hanoi (Yen Vien Station)-Lang Son (Dong Dang Station), Kep-Chi Linh, and Kep-Luu Xa. The top priority projects for capital allocation are the North-South high-speed railway including two routes of Hanoi-Vinh, HCMC-Nha Trang, those of Bien Hoa-Vung Tau, Vung Ang-Tan Ap-Mu Gia, Di An-Loc Ninh, HCMC-Cantho, Lao Cai-Hanoi-Haiphong, and Hanoi-Dong Dang. In the 2021-30 period, the draft planning proposed to prioritize the allocation of investment capital to complete the two routes of Vinh - Danang by 2040 and Danang-Nha Trang by 2050. During the period, the MoT also expected to complete the construction of the routes of Yen Vien-Pha Lai-Ha Long-Cai Lan seaport as well as the one connecting with Lach Huyen International Gateway Port, and build inter-regional railways including Ngoc Hoi-Lac Dao-Bac Hong, Thu Thiem-Long Thanh. For the period of 2030-50, intra- and inter-regional railways will be developed based on demand which includes Nam Dinh-Thai Binh-Haiphong-Quang Ninh (Ha Long) coastal railway, Ha Long-Mong Cai, Thai Nguyen-Tuyen Quang-Yen Bai, My Thuy Port-Dong Ha-Lao Bao connecting with the neighboring country of Laos. The draft estimated about VND240 trillion (US$10.4 billion) will be needed for both upgrading existing railway routes and building new ones. The fund will be mobilized from the state budget and other sources. Vietnamese firms yet to fully optimise ASEAN markets: experts Despite the COVID-19 pandemic, trade revenue between Vietnam and other ASEAN countries has still been on the rise, but much still needs to be done to fully capitalise on these neighbouring markets. Trade between Vietnam and other ASEAN nations has surged over the past years, from merely 3.5 billion USD in 1995, when the country became a member of the bloc, to 42 billion USD in 2015 and 53.6 billion USD in 2020. Last year’s figure accounted for 9.8 percent of Vietnam’s total trade turnover. In the first seven months of 2021, in spite of the pandemic’s negative impacts, bilateral trade still went up 38.5 percent year on year to 40.8 billion USD. That includes 16.1 billion USD of Vietnam’s exports and 24.7 billion USD of imports, respectively rising 25.9 percent and 48.2 percent. ASEAN is a large market with a combined population of nearly 700 million, a growing middle class, lifestyle and cultural similarities, and geographical proximity among member nations. Given this, Vietnam still has much room to boost exports to regional countries, according to the Cong Thuong (Industry & Trade) newspaper. Nguyen Phuc Nam, Deputy Director of the Asia - Africa Market Department at the Ministry of Industry and Trade, said there remain numerous good opportunities for Vietnamese goods to enter ASEAN markets. Indonesia, Thailand, and the Philippines are the biggest importers of Vietnamese goods at present. While Thailand prefers dried fruit and apparel for tourists, the other two have high demand for power generators, water pumps, and telecoms devices from Vietnam. ASEAN countries are also major importers of Vietnamese rice, he noted. Many other Vietnamese products also hold great potential for export to these destinations such as items of the processing and manufacturing industry, mobile phones, computers, electronic devices, tea, garments and construction materials. However, experts held that Vietnamese enterprises have yet to take full advantage of the ASEAN market. Over the last 10 years, the country has continually recorded a trade deficit of 6 billion - 7 billion USD, equivalent to 30 percent of total export value, with this market. Data of the General Statistics Office (GSO) show that the deficit stood at around 8.6 billion USD in the first seven months of 2021, shooting up 123 percent from the same period last year. To fuel shipments to this region, a GSO official suggested that Vietnam should pay more attention to its policies on trade with regional countries while optimising advantages created by the free trade agreements between ASEAN and partners around the world. It is also necessary to keep improving technology application to enhance the competitiveness of Vietnamese goods, step up trade in services and investment, and promote the country’s competitive edge. As Vietnam and some other ASEAN members share a high similarity of the product structure, it should actively engage in the shift of the capital flow within the bloc and cooperate with them to export goods to global markets, the GSO official said. The Asia - Africa Market Department recommended Vietnamese firms proactively learn about each country’s demand and requirements to have effective approaches./. Nha Be Garment JSC recorded losses due to pandemic Nha Be Garment JSC recorded losses after tax in the
first half of this year of $1.36 million, while also losing $725,000 in 2020. The company explained that from the beginning of the year, the pandemic has affected Vietnam and many countries and territories in Europe, America, and Asia – the main export markets of the company, its 10 subsidiaries, and nine joint ventures. Cash and cash equivalents decreased by more than $8.8 million compared to the beginning of the year. In which, demand deposits at banks declined most, down by more than $4.2 million. The company's inventory value by the end of the period was nearly $38 million, up more than 21 per cent; of which, raw materials were worth nearly $13.4 million. The second quarter is the period when the disease began to spread in Ho Chi Minh City, leading to strict social distancing measures in the city and the southern region. As a result, the activities of businesses and people in the area have been disturbed, and production maintenance costs also began to increase. In the second quarter of 2021, the company’s net revenue decreased by 2.4 per cent, with cost of goods sold decreased by 0.4 per cent over the same period, resulting in a decrease in gross profits by more than 11 per cent, to only $5 million. During the period, business management expenses were nearly $3.12 million, up 5 per cent compared to the second quarter of 2020. As of the end of June, the company has vaccinated almost all of its 3,100 employees, with a mere 100 workers yet to be inoculated. Since July 8, the company has mobilised about 650 workers to ensure production, with 280 of them arranged to work directly at the production lines. All to play for in Vietnam’s blossoming esports arena Vietnam’s esports market is gaining traction amidst the
stay-at-home trend, luring overseas brands to invest in local teams. Matthias Beyer, chief gaming officer of Ampverse, told VIR, “As a regional company headquartered in Singapore, we have been expanding across Southeast Asia - firstly in Thailand and now Vietnam. We believe Vietnam is a very exciting market with huge potential for growth in esports given the popularity of playing games and consuming gaming content in the market.” “Vietnam has some of the strongest esports players, not only in Southeast Asia but also globally,” Beyer added. “We look forward to helping amplify this talent onto the global stage and also support the growth of the Vietnamese esports ecosystem,” he said. Ampverse’s expansion into all markets is anchored around working with a leading local esports team that they want to develop to grow both in success ‘on the pitch’ as well as commercially. “As we elevate our teams, we help leverage our experience in marketing and advertising to help brands realise the value of esports by connecting them to our esports teams and gaming talent,” explained Beyer. SBTC Esports currently fields two professional teams in League of Legends and Wildrift. It also operates an SBTC academy, providing funding, support, and a professional environment for young aspiring gaming talent across Vietnam. SBTC Esports is the most popular team in the country, according to leading third-party analytics company, Esports Charts. It averaged over 80,000 live viewers across the entire League of Legends Vietnam Championship Series (VCS) Spring 2021 season, the highest of any team in Vietnam. Three months ago, US pro-gaming and entertainment company NRG Esports announced a partnership with CMG.ASIA to acquire GAM Esports, the defending champions in the VCS. NRG Esports has a vision to create a national team for Vietnamese esports. With the acquisition of GAM Esports, the current VCS League of Legends Champions and 5-time titleholders, NRG Asia will be providing top quality training, resources, and infrastructure to elevate GAM’s prospects of bringing home the first League of Legends world championship to Vietnam. TK Nguyen, CEO of NRG Asia, said, “With the expansion of NRG into Southeast Asia, we are excited to begin this new journey headquartered here in Vietnam. Our goal is to elevate GAM from being Vietnamese champions to leading world championship contenders by providing them additional resources and knowledge from top esports leaders.” Singaporean-based Team Flash is also looking to ramp up operations in Vietnam to tap into the potential of the esports market. Team Flash is Southeast Asia’s fastest-growing franchise, empowering talented competitors to pursue a professional career in gaming. The organisation has thus far invested in talent and infrastructure across both countries. The business model is still developing as monetisation is still early in the Vietnamese market. However, Team Flash has seen significant revenue growth, particularly in the streaming rights of players, which means they double up as influencers and content creators instead of simply gaming. According to the 2021 Vietnam Electronic Sports Whitebook conducted by Vietnam Recreational eSport Association (VIRESA), esports is recognised as a professionally organised form of competition supervised by referees. Players can be from amateur or professional backgrounds, and tournament locations can range from local internet cafes to large-scale stadiums. The esports ecosystem provides for many businesses that are forming and growing to support each other such as renting out venues, organising tournaments, creating online content, and offering sponsorship and advertising. Nguyen Quang Dong, director at the Institute for Policy Research and Communications Development, believed that esports is already a prosperous business industry. In order to help Vietnamese enterprises reach their full potential in this industry, the legislation blockages of licensing content moderation and copyright protection will soon have to be removed. “Besides that, each enterprise participating in the industry must focus on providing customers safety and benefits in the hope that people will have a clearer view of the esports scene,” Dong said. “A boost from suitable changes in policies and legislation is likely to make esports a spearhead in Vietnam’s growing digital economy.” VIRESA general secretary Do Viet Hung said in Esport Talk “Myths of Esports” hosted by Vero that Southeast Asia including Vietnam has seen the fastest growth in esports globally with a compound annual growth rate of 20 per cent. Even the organisers of SEA Games 31 officially announced that esports would become one of the 40 medal sports, demonstrating its rise to reach parity with traditional sports. The Ministry of Culture, Sports and Tourism has signed Decision No.28/QD-TCTDTT promulgating a law on esports competition, slated to be finalised at the end of this month. From that, a legal framework will be developed in regards to the country’s esports market. Retail petrol prices fall sharply after adjustments Retail petrol prices have reduced sharply from 3pm on August 26 following the latest review by the Ministry of Industry and Trade, and the Ministry of Finance. Accordingly, the price of E5RON92 bio-fuel fell 607 VND to 19,891 VND (0.87 USD) per litre at a maximum, and that of RON95 was also down 550 VND to 21,131 VND per litre. Diesel 0.05S and kerosene are now sold at 15,667 VND and 14,762 VND per litre, down by 506 VND and 417 VND, respectively. Meanwhile, the price of Mazut 180CST was cut by 350 VND to 15.055 VND per kilo. The two ministries reported that the prices of petrol and oil on the global market have been reduced for 15 days between 4.1 percent and 6.31 percent. Amid complicated developments of the COVID-19 pandemic, especially in southern localities, the ministries have continuously used the price stabilizing fund at a high level to support people and businesses./. Boosting disbursement of public investment in transport sector The Minister of Transport recently requested the establishment of a special working group to boost the disbursement of public investment capital for projects in the transport sector. Minister Nguyen Van The asked agencies and units under the Ministry of Transport, heads of investors and project management boards to determine that accelerating the disbursement of public investment capital was one of the key political tasks of this year to promote economic growth and achieve the highest socio-economic development goals in the context of the COVID-19 pandemic. The Minister assigned the Department of Planning and Investment to coordinate with the Transport Engineering Construction and Quality Management Bureau to urgently advise on the establishment of a special working group of the Ministry of Transport to promote disbursement of public investment capital led by the Minister of Transport. The working group will develop a detailed working outline, assign specific tasks to each member and immediately implement the tasks after being established. In particular, the Minister of Transport requested to strictly handle investors, project management boards, organisations and individuals who intentionally cause difficulties, obstruct or slow down the progress of capital allocation and disbursement of public investment capital; promptly replace civil servants and public employees who are weak in capacity, stagnate, corrupt and resolutely handle negative acts in public investment management. "Disbursement results of public investment projects are one of the most important bases to assess the completion of yearly tasks by organisations and individuals assigned to monitor and heads of related advisory agencies," said the minister./. THACO signs contract to export over 6,050 semi-trailers to US Truong Hai Auto Corporation (THACO) has signed a contract with Dorsey Intermodal Company to export 6,050 semi-trailers to the US, the largest order in both value and quantity that the firm has received so far. In order to deliver the first shipment to the US in November 2021 as scheduled, THACO is mobilising resources to speed up production activities. Besides, THACO and Dorsey Intermodal, a subsidiary of PITTS Enterprise - one of 15 major semi-trailer manufacturers in the US, are negotiating new contracts for production and delivery in the third and fourth quarters of next year. THACO is also developing suitable products and expanding the distribution market in the US. From 2022, THACO will export between 12,000 and 15,000 semi-trailers to the US market annually, while also striving to boost exports to both the Australian and Japanese markets. Ed Gill, Vice President of Sales at Dorsey Intermodal, said THACO's products are of high quality and suit the needs of the US market, as well as meeting the traffic standards of the US. Currently, THACO is also working hard to deal with difficulties in logistics due to impacts of the COVID-19 pandemic and container shortages, thus completing its orders./. Vietnam, India strive to promote cooperation in medical equipment The medical devices sector is one of Vietnam’s most promising for foreign investment due to its rapid economic development and rising demand for medical care, according to Madan Mohan Sethi, Consul General of India in Ho Chi Minh City. He made the statement at a webinar entitled “India –Vietnam Business Meet in Medical Devices Sector” organised by the Consultate General of India in HCM City in coordination with the Investment and Trade Promotion Centre of HCM City (ITPC) on August 24. The COVID-19 crisis provides an opportunity for both sides to join hands and set up alternative global supply chains in different areas and pharmaceutical products that have been disrupted by the pandemic, he said. According to Tran Phu Lu, deputy director of ITPC, in Vietnam, domestic medical equipment production only meets 1.5-2 percent of the demand and auxiliary technology is also limited, only meeting about 3 percent of the demand. Currently, most medical equipment is imported from developed countries, reported The Saigon Times. Lu highlighted that Vietnam is determined to fight the COVID-19 pandemic, protect people's health and return the country to a new normal soon, adding the country is also determined to implement the vaccine strategy, focusing on technology transfer and research for domestic vaccine development for administering residents to achieve herd immunity. Dinh Quang Long, director of APOLAT Legal, said in accordance to Circular No. 43/2021/TT-BTC of the Ministry of Finance, medical equipment are eligible for value added tax (VAT) incentives at the tax rate of 5 percent from August 1 this year. In addition, Vietnam has issued regulations on special preferential import tax rates to implement the ASEAN-India Trade in Goods Agreement under the Framework Agreement on ASEAN-India Comprehensive Economic Cooperation in the 2018-2022 period. The tax rate ranging from zero to 8.5 percent is an extremely favourable factor for bilateral trade cooperation between the two countries in the field of medical equipment, he said. India is the fourth largest market for medical devices in Asia and among the top 20 markets for medical devices in the world. The virtual India-Vietnam Business Meet was attended by medical device manufacturers and suppliers from both sides./. Vietnamese businesses advised grasping new trend to increase exports to Spain As the COVID-19 pandemic has changed the consumption habits of Spaniards to be interested in products related to strengthening their health, Vietnamese enterprises can take an opportunity to have appropriate export orientations to this market, according to Vietnam’s Trade Office in Spain. Despite the impact of the COVID-19 pandemic, the two-way trade turnover has still yielded positive results thanks to the enforcement of the European Union-Vietnam Free Trade Agreement (EVFTA), it said. Statistics from the General Department of Customs showed that, in the first seven months of this year, Vietnam's exports to the Spanish market reached 1.3 billion USD, an increase of 14.78 percent compared to the same period last year. When about 70 percent of the Spanish population is fully vaccinated, and Spain's economic situation may begin to improve, Vietnam's import and export turnover this year to the market is expected to recover quickly. Therefore, Vietnamese businesses need to grasp the trends and tastes of Spanish consumers to boost the export, the office said. Spain is a country with a service economy accounting for 75 percent of gross domestic product (GDP), followed by industry (15 percent), construction (7 percent), agriculture and fishing (3 percent). The tourism sector contributes 12 percent to the country’s GDP. Therefore, Spain's consumer demand for goods is somewhat more diverse than that of other EU countries. Notably, Spain is also a country that focuses on developing agriculture, fishing, aquaculture, and processing seafood for export. Its agricultural and aquatic products, vegetables are exported around the world, especially in the EU. Thus, Vietnam can only export to the Spanish market typical tropical agricultural and aquatic products. Currently, key Vietnamese export items to the European country include phones and components, garments and textiles, footwear, machinery, coffee, toys, game equipment, furniture, rubber, and related products. Domestic seafood enterprises are advised to fully meet technical standards on food safety and hygiene to penetrate the EU and Spanish markets. It should be noted that the EU in general and Spain in particular, are paying special attention to corporate social responsibility, with employers required to ensure standard working conditions for employees along with environmental protection. The Trade Office said it will strengthen support for domestic businesses to build a common brand for Vietnam’s import and export goods to ensure that they meet the requirements of the partners and secure a foothold in the Spanish market. Given the complicated development of the COVID-19 pandemic, it is necessary to enhance online trade linkages and participate in online trade promotion activities at international exhibitions, it said. Vietnamese enterprises are also advised to update information relating to technical requirements as well as regulations on quarantine, environment protection, food safety and hygiene, the trade office said, adding that a database of enterprises engaged in imports and exports from the two countries should also be set up to serve trade promotion and connection./. More than two dozen road construction projects prioritised for investment in 2021-2025 The Ministry of Transport (MoT) has issued Report
No.7066/TTr-GTVT asking the prime minister's approval for the road system
plan for the 2021-2030 period, with a vision to 2050. The ministry also highlighted 25 road construction projects prioritised for investment in 2021-2025. Accordingly, the total investment capital in the road network by 2030 is expected to account for about 48 per cent of the investment in the transport industry. The MoT would also prioritise state budget to support investment projects in the form of public-private partnerships (PPP) and projects that cannot attract foreign capital or those in disadvantaged and vulnerable zones. The ministry would also encourage local authorities to apply for official development assistance and the state budget, to make funding efficient. Assoc. Prof. Dr. Tran Chung, chairman of the Vietnam Association of Road Traffic Investors, said that the local government should come up with a breakthrough mechanism and prioritise financial resources to further boost transport infrastructure development. In the past five years, no PPP infrastructure projects have been implemented because investors have depended on credit sources from financial institutions, while banks have limited lending activities to infrastructure projects due to their risky nature. He also added that businesses can raise capital from bond issuance and unlock financial resources in society, instead of their "wait-and-see” approach or merely depending on banks’ capital. "To build 5,000km of expressway by 2030, we need a more comprehensive, thorough development plan under intensive supervisory process to mobilise significant resources. Furthermore, a favourable policy mechanism is an essential part of the game," Chung said. Pharma drive a chance for real estate “Even though the country is limited in developing complex pharmaceuticals, its potential for real estate opportunities is real,” Ginolin said. This month, Vingroup collaborated with Arcturus Therapeutics Holdings Inc. to establish a facility in Hoa Lac High-tech Park in Hanoi’s Thach That district for the production of COVID-19 vaccines. The facility is under construction and expected to have a capacity of 100-200 million doses per year. It is expected to be put into operation by mid-2022. VABIOTECH is proposing to be in charge of packaging the Russian Sputnik V vaccine tubes from semi-finished products with a volume of five million doses per month. Advanced International JSC (AIC) and VABIOTECH have signed a deal with Japan’s Shionogi to transfer COVID-19 vaccine production technology, and is also expected to be completed by June next year. Ginolin of Boston Consulting added that outsourcing trends are explained by cost optimisation as major groups re-focus on core competencies. Several directions were highlighted by Ginolin for Vietnam’s life science real estate, including developing manufacturing facilities, especially outsourcing from global corporations and focusing on fast-growing sub-segments – potentially high-potency molecules, biologics, and smaller flexible plants. “In addition, focus may be placed on setting up specialised logistics facilities for both export and import, with specific cold chains for pharmaceuticals. To a lesser extent, research and development (R&D) centres and offices for growing local life science companies will occur,” he added. To unlock the potential, Ginolin said that Vietnam would need the right regulation and certification approach to ease local and foreign investments and to work closely with the private sector regarding tech and talent transfer. “An ambitious yet pragmatic and coordinated national plan is also a key success factor,” he added. According to the global commercial real estate services company JLL, in 2021, investor interest is growing in critical areas during the health crisis in Vietnam. Life sciences generally consist of corporate offices, logistics facilities, R&D laboratories, and manufacturing facilities. Logistics assets, which have been one of the hottest areas in recent years, will continue to receive increased capital allocation amid the online shopping boom. Meanwhile, domestic and international investors have targeted the health and medical logistics segment. They need more cold storage locations closer to customers to serve the growing demand for businesses and for temperature-sensitive products such as vaccines, cosmetics, foodstuffs, and pharmaceuticals. But the driving force behind the cold logistics industry, JLL added, is not only that but also unique healthcare products. The most prominent are the COVID-19 vaccines and other vaccines that may be required. In addition to the rise in manufacturing facilities, the demand for specialised R&D facilities across the region is being supported by new establishments in key industrial zones. Vietnam has become the R&D centre for many giant technology companies. Along with Samsung’s building of a $220-million centre in Hanoi, Vietnam is now also an R&D hub for many other companies such as LG Electronics, Panasonic, and Toshiba. HCMC Customs facilitates goods clearances for hundreds of enterprises From mid-July up to now, the Customs Department of Ho Chi Minh City has supported the customs clearance procedures for 204 declarations related to medical equipment including ventilators, oxygen generators and medical devices to monitor patient health. The agency also received and facilitated the customs procedures for hundreds of enterprises. Besides that, the customs received and answered the questions for 31 phone calls via two hotlines No.1080 and No.1081 of the rapid response team to support customs clearance for Covid 19 prevention and control. Mr. Hoang Huu Truong, Head of Inspection Team under the HCMC Customs Department is responsible for receiving and solving the problems of enterprises and agencies. For more information, enterprises can directly contact with his mobile number 0909632031. According to some logistic enterprises, the process of picking up goods has been facing difficulties as many enterprises had shut down their operation resulting in congestion at some ports and a logistical domino effect for the supply chain. HCMC-Tay Ninh Expressway awaits approval The build-operate-transfer (BOT) project to construct the Ho Chi Minh City-Moc Bai Expressway in Tay Ninh province was planned and approved. The total investment capital for the project was to be around VND9,763 bn, of which the support capital of VND2,300 bn would come from the Ho Chi Minh City budget, while about VND1,000 bn was to come from the Tay Ninh province budget. However, now the Department of Planning and Investment believes that the capital source for the project has increased substantially and the current public investment plan is not in balance with the Ho Chi Minh City development plans for the 2021 to 2025 period. Balancing budgets Authorities and leaders in Ho Chi Minh City and Tay Ninh province have determined that investing in the construction of the Ho Chi Minh City-Moc Bai Expressway is extremely urgent in order to facilitate the circulation of goods and travel from the central economic zones of the Southern Key Economic Zone area, and for linking with seaports and the whole ASEAN region. The whole route covers a length of 50 kms, which passes through Ho Chi Minh City for over 26 kms with eight lanes, and goes through Tay Ninh province over a distance of more than 23 kms with six lanes. Therefore, finding and balancing the budgets to accelerate the project is now very urgent. Recently, the Department of Planning and Investment sent a report to the People's Committee of Ho Chi Minh City on investment methods as well as some recommendations to speed up the project progress. According to calculations, the preliminary total investment in Phase 1 of the project will be VND15,900 bn. In this, construction cost will come to VND5,417 bn; management, consulting, and loan interest expenses will be around VND 1,836 bn; cost of compensation and support for site clearance and resettlement is expected at VND7,433 bn, with Ho Chi Minh City giving VND 5,901 bn and Tay Ninh province giving VND1,532 bn; and contingency costs are expected to be around VND1,214 bn. The Department of Planning and Investment recommends Phase 1 of the project under the method of build-operate-transfer (BOT). In this, the State supports the cost of compensation and site clearance from the budgets of the two localities. The rest of the capital comes from the investor, and this cost is collected by the investor under the contract. Regarding compensation, site clearance and resettlement support, Ho Chi Minh City has agreed with the People's Committee of Tay Ninh province to report to the Prime Minister to divide two projects into compensation, site clearance, support and resettlement through each local area. In addition, during the process of the interdisciplinary appraisal council, the People's Committee of Ho Chi Minh City will direct the Department of Planning and Investment and other departments and sectors to coordinate in appraising the capital source and the ability to balance the City's budget capital to participate in the project according to the requirements of the project. According to the plan, the Ho Chi Minh City-Moc Bai Expressway project will start construction in 2023 and be completed by 2025. Currently, Tay Ninh province is waiting for Ho Chi Minh City to submit to the People's Council an investment policy proposal. After the People's Council of Ho Chi Minh City gives its approval, the two localities will carry out the next procedures with the aim of starting the project as planned. According to information from the Department of Transport of Tay Ninh province, all compensation costs will be covered by the local budget. Currently, the compensation budget for site clearance is very large, but for the common goal of contributing to socio-economic development, Tay Ninh province and Ho Chi Minh City will jointly try to balance the budgets. According to the Department of Transport of Ho Chi Minh City, the Department of Planning and Investment is currently making plans and reporting to the People's Committee of Ho Chi Minh City to prepare to submit to the City Council. After the City Council agrees and approves, the next steps will be carried out. The Ho Chi Minh City Department of Transport added that in this project, the BOT construction and installation part is expected to payback. The site clearance part will be funded by the localities, appraised, then a pre-feasibility study report will be made and submitted to the investment policy makers. Priority project Currently, the Department of Planning and Investment has proposed to the People's Committee of Ho Chi Minh City to report to the City Council on the urgency of the project. Accordingly, the project is being invested to meet travel and freight demand, and reduce the load for National Highway 22 Trans-Asia Expressway, connecting economic centers, border-gate economic zones, urban centers of the Southern key economic region with the hubs of seaports and international airports of the region and the ASEAN economic region. Seeing the advantages of highways that have been invested and built in the region, this project will contribute to improving the quality of transport infrastructure, create a breakthrough for the region's socio-economic development, and ensure safety, security and defense. In addition, the Ho Chi Minh City-Moc Bai expressway will develop traffic infrastructure, facilitate the exploitation of land fund for urban development along the route and suitable and effective services and industrial zones. Recently at an online meeting of the Minister of Transport, Mr. Nguyen Van The, with the Southern localities on the implementation of a number of projects in the South, the Minister proposed that the People's Committee of Ho Chi Minh City and Tay Ninh province coordinate and complete the procedures to submit to the Prime Minister for consideration and decision on investment policy of the Ho Chi Minh City-Moc Bai expressway project in August 2021. According to the People's Committee of Ho Chi Minh City, it is expected that the medium-term public investment capital for the 2021 to 2025 period, along with the city budget as per the announcement by the Prime Minister, will be VND 127,683.9 bn for on-going projects. This includes transitional projects and new start-up projects that have been decided by competent authorities, which are projects funded by the central budget, and pre-investment projects that have been allocated capital in the year 2021. Therefore, the Ho Chi Minh City-Moc Bai Expressway project has not been balanced in the medium-term public investment plan for the 2021 to 2025 period. Ho Chi Minh City proposes to adjust the expected capital level of the medium-term public investment plan for the period 2021 to 2025 period from investment capital sources in the city, and can mobilize about VND119,410 bn. According to the Department of Planning and Investment, in case the National Assembly agrees to increase the expected capital level of the medium-term public investment plan for the period 2021 to 2025 period, the Department of Transport needs to review and redefine the priority order of projects in the field of transportation. In particular, the Ho Chi Minh City-Moc Bai Expressway project must be given highest priority to ensure the capital source and the ability to balance the capital for the project implementation from the additional capital the City can mobilize is the basis for reporting to the City People's Council to consider and decide on the project. Delays in completion of key transport projects The Ministry of Transport is currently facing many roadblocks in the disbursement of funds for the completion of several key transport projects for the last six months of the year. This will affect the overall GDP growth target as well, especially as these important large-scale projects will act as a driving force to stimulate other economic growth projects. For the year 2021, the Ministry of Transport has been allocated funds for disbursement that are more than VND 43,400 bn, which include investment capital of VND 42,996 bn from the annual plan. Of this amount, VND 38,159 bn is from domestic capital, and VND 4,837 bn is from foreign capital, while VND 405 bn is part of the extended plan. By the end of June, the Ministry of Transport had disbursed VND 17,311 bn, which covered 40.8% of the total plan and about 40.3% of the plan assigned by the Government, which is higher than the average disbursement rate of all the other ministries that show an average of 22.02%. The above results were achieved due to the initiative and flexibility of the Ministry of Transport in implementing disbursement plans for several key transport projects. The Ministry of Transport efficiently directed the basic construction works, especially in disbursing public investment capital with many key solutions, such as clearly defining the responsibilities of the investor, as to who is the leader in capital allocation decisions. The Ministry also promptly issued documents to urge and criticize investors who were behind schedule, while regularly inspecting ongoing works in localities, to remove difficulties in site clearance and construction materials. Up until now, the Ministry of Transport has made three adjustments to the plan for eleven projects worth a total value of VND 3,130 bn. In which, the North-South expressway component projects has received an additional VND 1,637 bn from the Ministry of Transport; and disbursed VND 6,935 out of a total of VND 14,981 bn, reaching 46.3% of the plan and basically meeting the set requirements. Similarly, the My Thuan-Can Tho expressway project saw a positive disbursement with an additional VND 647 bn of the plan, and disbursing VND 900 bn out of a total of VND 1,811 bn, reaching 49% of the plan and meeting all the set requirements. Also the Mai Son-National Highway 45 highway project, represented by PMU Thang Long, for the first six months of the year has reached the schedule in the ongoing North - South expressway component projects. This route covers a total length of 63.37 km, passing through two provinces of Ninh Binh and Thanh Hoa, at a total investment of VND 12,111 bn, since starting the first bidding package at the end of September 2020, and expected to complete construction in next two years. According to the Ministry of Planning and Investment, in the last five months of the year, the Ministry of Transport needs to continue disbursing more than VND 26,000 bn, including VND 3,620 bn of foreign capital and more than VND 22,000 bn of domestic capital. This will not be an easy task, especially in the current scenario of an ongoing pandemic. That is to say that the disbursed value in the first six months of the year is still mainly towards contract application, payment of outstanding debts, recovery of advance capital for businesses and localities, and the disbursement for construction. One of the difficulties in the construction of key projects that the transport sector is facing is the current high price of construction materials, such as a 40% to 50% increase in construction steel in the second quarter, leading to moderate standard construction material, and some other construction materials shortage in supply as well. Currently, the Cam Lo-La Son expressway project, which is the section connecting Quang Tri and Thua Thien-Hue, is not expected to be complete and put into use by the end of 2021 due to a lack of land for embankment. The contractors are also waiting for the local mining license for this project. The section of the Mai Son-National Highway 45, which will run through Ninh Binh-Thanh Hoa, and the Phan Thiet-Dau Giay project, which will run through Binh Thuan and Dong Nai provinces, are also facing lack of land for embankment. Besides this delay, there is the high price of iron and steel which puts the contractor in a difficult position, affecting construction progress. The North-South expressway project has just disbursed VND 4,534 bn, reaching 30% of the yearly plan. Similarly, the Long Thanh airport clearance project has also disbursed VND 9,887 bn, reaching 43% of the plan through domestic capital in the last six months of the year. To overcome these many difficulties, the Government issued a resolution at the end of June, allowing localities to apply a specific mechanism for granting land mining licenses to solve the lack of land for embankment of the North-South Expressway. However, this cannot be done right away because of the Covid-19 pandemic outbreak in many localities, which has created complicated situations. In addition, at present, there are still a number of official development assistance (ODA) projects that are completing procedures for approving technical designs, while the bidding process is lengthy, so construction has not yet been implemented. This is potentially posing a risk for disbursement not meeting the proposed schedule time while the stormy season is approaching, affecting the project progress. Faced with the above situations that are causing needless delays, the Ministry of Transport issued Directive 06/CT-BGTVT 2021 in June to accelerate the implementation and disbursement of the 2021 public investment plan. Specifically, the Ministry of Transport requires investors, and the Project Management Board to hasten the completion of bidding procedures to select contractors and consultants, based on the detailed monthly disbursement plan approved by the Ministry, as a basis for project management. The department directs and manages the implementation and ensures the overall disbursement plan of the Ministry's projects in 2021. Accordingly, it will strive to achieve at least 90% of the plan by December and to disburse 100% by 31 January, 2022. Projects with capital sources extending from the 2020 plan must be fully disbursed before 31 December, 2021. When the above targets set by the Ministry of Transport are fully realized, they will contribute a great deal towards the GDP growth target this year. However, under the current difficult circumstances caused by the Covid-19 pandemic, the effective implementation of these target plans in the last six months of the year will certainly prove to be an immense challenge. Source: VNA/VNS/VOV/VIR/SGT/SGGP/Nhan Dan/Hanoitimes |
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