Vietnam stops container terminal construction to build steel mill

Former Vietnam National Shipping Lines (Vinalines) director Chu Quang Thu is urging the nation to build an international container shipping terminal, to meet growing demand and cut hefty spending on port fees.

The demand comes as the building of Vietnam's first international ship container terminal, expected to have started construction in January, was put on hold by the construction of a US$5 billion steel mill in the vicinity by South Korean company Posco.

Mr Thu raised the urgency of building a new international box terminal to do away with the costly practice of transhipping cargo from Vietnam to Europe and North America via Hong Kong and Singapore.

"Currently we give foreign traders at least US$3 billion in transshipment fees every year," he said in a report by VietNamNetBridge, noting that the fees accounted for 10 to 15 per cent of trade goods' value.

Vinalines claims that transshipment of containers through Hong Kong or Singapore adds US$101-$231 to transport costs and reduces Vietnam's international competitiveness. Vinalines said the amount of container goods transhipped through Vietnam's ports has increased by an average of 17-20 per cent each year.

Former director Thu has also expressed a preference for the new facility to be constructed in the southern coastal province of Khanh Hoa's Van Phong Bay, as stipulated by the nation's prime minister in October 1999.

Last year, 4.85 million TEU of goods were transshipped through domestic ports in Vietnam, an increase of 31.24 per cent over 2006.

Former Khanh Hoa's People's Committee and Khanh Hoa Sea Science Technology Association president Nguyen Thiet Hung was cited as saying in the report that the construction of an international container terminal will take time, while the province can garner immediate economic benefits from a steel mill.

Said Mr Thu: "I'm sure that although Van Phong may become an international port it will not be an international container transshipment terminal if the steel mill is built."

But Mr Hung's view was supported by Van Phong Economic Zone Management Board chairman Nguyen Trong Hoa who maintains that a working steel mill will add about $125 million each year to the provincial budget.
Source: http://www.vinamaso.net/Vietnam-Mar...erminal-construction-to-build-steel-mill.html