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INVESTMENT – Investors to suspend delayed projects

VNS



HCM CITY — Investors must make adjustments to construction schedules for delayed projects as limited State capital is available, according to Minister of Transport Ho Nghia Dung.

Because of the capital shortage, Dung said that early announcements from investors on the date of cessation of construction would help prevent losses to bidders.

Speaking at a meeting on construction projects, Dung said that investors must be held accountable for any delays in public investment projects.

Except for projects using Official Development Assistance (ODA), around 100 transport projects will be suspended.

Seventy-five of the projects use capital of VND1.4 trillion (US$70 million) in Government bonds, and the remaining use State budget money of VND3.2 trillion ($160 million).

For other projects that use Government bonds, investors will be allowed to complete several projects this year, with the rest of the capital paid for any construction works completed before March 31 and for land compensation.

"If we don't stop construction in the middle of the second quarter for all 75 projects using Government bonds, all other projects using this kind of capital will be closed because we won't have enough capital," said Tran Quoc Viet, head of the Transport Ministry's Construction Quality Control and Management Bureau.

This year, total capital for infrastructure construction for the sector can meet only 43 per cent of demand, at around VND18.5 trillion ($920 million).

This means that the ministry has the largest number of projects either delayed or postponed in comparison with other sectors.

This could halt construction on many key and national construction projects as well, such as the Ho Chi Minh Road and National Road 279.

"This will lead to damage and waste in equipment and human resources, and will worsen the transport situation," said Nguyen Hoang, head of the Ministry's Planning and Investment Department.

In fact, most transport bidders face serious debt. Two corporations, the Transport Construction Corporation No 1 and Waterway Construction Corporation, have total debt of up to VND2 trillion ($100 million).

Moreover, even though construction will stop temporarily at these 100 projects, they will only have enough capital for urgent works until August.

To cope with the difficult situation, the ministry has asked investors to set up a plan to ensure sufficient transportation and environmental hygiene. The ministry has also encouraged bidders to provide capital themselves to finish road works.

"Project management units for ODA and national key construction projects should speed up disbursement as well as seek outside capital to create jobs and prepare for the 2012-13 period," said deputy minister Ngo Thinh Duc.



POWER - Vietnam will need 50,000 megawatts more power through 2020

Bloomberg





Vietnam will need to build power plants with a total capacity of more than 50,000 megawatts through 2020, said Pham Hung, deputy director of the energy department of the Ministry of Industry and Trade.



Vietnam will put forward policies to encourage investors to help build more power plants, Hung said today in prepared remarks at a meeting of the Asian Development Bank in Hanoi.

“The government has decided to move toward the trend of gradually allowing power prices to follow the market,” Hung said when asked whether prices may rise. “Starting June 1, we will introduce a procedure that every three months, Vietnam Electricity will consider adjusting” the price.

Vietnam’s government said in April that it would allow power prices to be adjusted as often as once every three months, depending on market conditions.

The policy is based on a government decision dated April 15 and signed by Prime Minister Nguyen Tan Dung, according to a posting on the government’s website. Changes in fuel costs or exchange rates are among the reasons for adjusting power prices.

The government increased electricity prices by about 15 percent on March 1, contributing to a 13.89 percent year-on-year inflation rate in March. Inflation accelerated in April to 17.51 percent, the fastest pace since 2008.

WATER - ADB to provide 1 bln USD to Vietnam for water supply project

Xinhua



The Asian Development Bank (ADB) has approved a sum of one billion U.S. dollars to Vietnam's project in better access to clean water for over three million families, the Vietnamese Ministry of Agriculture and Rural Development reported on Wednesday.



The national-level project aims to reduce clean water loss in the urban areas to below 20 percent by 2020, and to raise the Vietnamese urban areas to the same level of other places in Asia in terms of clean water supply capacity.

The project's target is that about 90 percent of Vietnamese families will be supplied with clean water by 2020 and 100 percent by 2025.



Province offers incentives to investors

VNS

HCM CITY — Binh Phuoc is offering several preferential policies including land tax exemption, faster site clearance and human resource training support to lure more investment into the province's industrial parks.

Provincial officials said they would also speed up administrative reforms to create favourable conditions for investors.

At the Hoa Lu Border Gate Economic Zone, apart from tax breaks and cheap land rents including a cut in corporate income tax, the province would support investors by developing infrastructure, the report said.

Currently, Binh Phuoc has 18 industrial parks covering 5,211ha located in key areas with favourable transportation links.

There are more than 3,000 businesses with a total registered capital of VND19.7 trillion (US$947 million) working in the province. Of these more than 80 are foreign invested projects with total registered capital of $644 million.

Binh Phuoc's industrial production value in the first three months of this year was VND989.4 billion ($47.5 million), meeting 17.7 per cent of the year's target. The figure marked an increase of 53.5 per cent over the same period last year.

In March alone, industrial production was VND304.5 billion ($14.6 million), a year-on-year increase of 41.6 per cent.

Despite the strong showing, the province's IPs had plenty of room for more investors and local authorities were keen to have them functioning at maximum capacity, the report said.



AVIATION - Sugar refinery targets to develop into large group

Dau Tu Chung Khoan




In the latest AGM, Lam Son Sugar and Sugar Cane Joint Stock Co (coded LSS) has passed the plan of developing the company into a multi-sectional economic group in such fields of industry, agriculture, tourism and real estate.

In the meeting, the shareholders also approved the plan of raising chartered capital from current 400 billion dong to 500 billion dong via allocating bonus shares for existing shareholders under ratio of 4:1.

In 2011, LSS targeted to reach total revenue of 1.65 trillion dong, after tax profit of 337.5 billion dong and dividend payment at 20-25 percent. The company reported gaining 394.5 billion dong in revenue and 132.2 billion dong in pre-tax profit.



Vietnam Airlines to have 34 more aircrafts

Thanh Nien




National carrier Vietnam Airlines will add 34 aircrafts to its fleet for operation between 2011 and 2015.

The government has guaranteed a leasing contract for Vietnam Airlines to hire eight A321-200 aircrafts for the period.

The carrier is also allowed to buy 26 A321-200 aircrafts in the period, according to a new decision by prime minister Nguyen Tan Dung.

Currently, Vietnam Airlines has 70 aircrafts in its fleet, of which 38 are hired planes.

The state-owned carrier has recently re-launched plans to go public but exactly when is not clear.

VNA also plans to launch its direct routes to England and the United States by the end of this year.

Last year it became the first airline in Southeast Asia to join the SkyTeam global airline alliance, which includes Air France and Delta Air Lines of the United States.



OIL/GAS: PVG's Q1 profit increases sharply

Vietstock

PetroVietnam Northern Gas Joint Stock Co (coded PVG) released the Q1 financial reports with sharp increase in profit of 115.5 billion dong, thanks to surge in financial revenue.

In Q1, the company reported gaining net revenue of 878.73 billion dong, up 65 percent against that of Q1 of 2010, of which principal sales cost counted for 818.9 billion dong.

Especially, revenue from financial activities was posted at 176 billion dong, in comparison to that of Q1 of 2010 at 12.54 billion dong.

The company has recently withdrawn capital from in PetroVietnam Low Pressure Gas Distribution Joint Stock, bringing in profit of about 130 billion dong.

Therefore, despite doubled sales costs and enterprise management costs in comparison with the same period last year, the company's after tax profit was posted at 115.5 billion dong, nine times higher than Q1 of 2009 at 12.35 billion dong.



PVE gains after tax profit of 9.8b dong in first three months

Vietstock




The HNX-listed PetroVietnam Investment Consultancy and Engineering Joint Stock Co (coded PVE) has recently announced to gain parent company's profit of 9.87 billion dong in Q1 of 2011, about 2.5 times higher than the same period last year.

The company estimated to reach total net revenue of 102.85 billion dong, up 44 percent year-on-year, combined profit of 17.9 billion dong, up 56 percent.

Accordingly, after tax profit was posted at 9.87 billion dong, compared to that of 2009 at 4 billion dong.



RATING- FITCH rates Hoang Anh Gia Lai's USD notes 'B(exp)'; affirms IDRrs at 'B'

Reuters




Fitch Ratings has affirmed Vietnam-based Hoang Anh Gia Lai JSC's (HAGL) Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) at 'B' with Stable Outlooks.

Fitch Ratings has affirmed Vietnam-based Hoang Anh Gia Lai JSC's (HAGL) Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) at 'B' with Stable Outlooks. Simultaneously, Fitch has assigned a 'B' senior unsecured rating to HAGL, as well as an expected 'B(EXP)' rating and a Recovery Rating of 'RR4' to its proposed USD notes, which are guaranteed by HAGL's main operating subsidiaries. The final rating of the notes is contingent upon the receipt of documents conforming to information already received.

The rationale for HAGL's ratings remains unchanged from that detailed in Fitch's press release entitled "Fitch Rates Vietnam's Hoang Anh Gia Lai at 'B'; Outlook Stable" dated 9 February 2011 and summarised below.

HAGL's ratings are constrained by its large capex plans of over USD400m until the end of 2013. Also, the company plans to diversify away from its established, but volatile, residential property development business in Vietnam into hydropower generation, iron ore mining and rubber plantations in Vietnam, Cambodia and Laos, which would increase execution risks. This concern is heightened by HAGL's high funding costs, a reflection of Vietnam's current high interest rate environment.

A successful completion of the proposed USD Notes will help lower funding costs while improving debt its maturity profile. HAGL also maintains high cash balances and undrawn committed facilities to manage liquidity risks. There is also significant flexibility in its capex plans to reduce, delay and/or cancel projects as they are modular.

HAGL's ratings are also supported by its established residential property development business, which focuses on the mid-tier market in HCM City. The company has a sufficient land bank for proposed projects over the next five years. This land was acquired at materially lower costs than current market value, which in addition to the reliance on in-house construction, allows for high profit margins.

The Stable Outlook reflects Fitch's expectation that cash flows from property development would be sufficient to cover funding costs during HAGL's expansion phase up till the end 2013. The agency expects the company's funds from operations (FFO) interest coverage to range between 2x-3x during this period.

Negative rating actions could be taken if the company's FFO interest coverage is sustained below 2x and/or if it does not scale back its capex without securing longer term lower cost funding. A positive rating action is not envisaged until the new ventures contribute to at least half of total operating profits and generate sufficient FFO to sustainably provide 2.5x coverage of interest.



FOOD PROCESSING - Thai Hoa Vietnam invests 400b dong for coffee plantation development

Dau Tu Chung Khoan




Thai Hoa Vietnam Group Joint Stock Co (coded THV) recently signed the contract with Institute of Agricultural and Rural Development Policies and Strategies, under ministry of agriculture and rural development on April 29, 2011 for setting up the coffee plantation area and developing the high-class Arabica coffee trademarks in such provinces of Lam Dong, Quang Tri, Son La and Dien Bien.

Nguyen Van An, chair of management board cum general director stated that the company planned to invest 400 billion dong for carrying out the signed agreement within the period of five years from 2011. Most of the capital will be used for funding the coffee farmers in the group's raw material supplying area.

In the first quarter of this year, THV reported gaining total revenue of 1.005 trillion dong, pre-tax profit of 40 billion dong, equivalent to 50 percent of that of Q1 last year.



FINANCE – Japan pledges support for Vietnam’s development

VOV

Vietnam wants to promote cooperation with Japan in economic policy planning and financial management as well as in the training of financial officials and experts.

Politburo member and permanent member of the Party Central Committee’s Secretariat Truong Tan Sang made this statement at a reception for Japanese Minister of Finance Yoshihiko Noda in Hanoi on May 3.

Mr. Sang spoke highly of the Japanese Ministry of Finance’s role in maintaining and providing ODA to Vietnam at high levels, which, he said, has effectively contributed to Vietnam’s socio-economic development and improving its people’s lives.

Finance Minister Noda hailed the Vietnamese government’s efforts in estabilising the macro-economy, curbing inflation, ensuring social welfare as well as reducing the effects of rising food and fuel prices in the region.

He pledged to deliver ODA to projects already agreed by the two countries’ leaders, an effort to further promote the strategic partnership Japan and Vietnam have established.

During talks with Hiroshi Watanabe, President and CEO of Japan Bank for International Cooperation (JBIC), Mr. Sang said he hoped JBIC would increase its support for public-private partnership projects in Vietnam, furthering bilateral cooperative ties in the spirit of “Strategic partnership for peace and prosperity in Asia” set out between the two countries.

The JBIC President said that JBIC pledged to help Japanese businesses expand activities in Vietnam and fund projects aimed at developing infrastructure and key industries in the countries.

The Japanese Finance Mi nister and the JBIC Executive are currently in Hanoi for the Asian Development Bank (ADB) 44th Annual Meeting.



SBV mulls to raise dong deposit rate cap to 16pct

StoxPlus.com




The State Bank of Vietnam (SBV) is mulling to raise dong deposit interest rate cap to 16 percent from current 14 percent in an effort to attract more dong deposits from the public into the banking system, the online newspaper Sai Gon Tiep Thi reported.

The rate hike is expected to improve liquidity position of local banks, especially small ones, the local media pointed out, noting that some lenders have lately negotiated to boost actual deposit interest rates to between 16 percent p.a. and 18 percent p.a.

The banks cannot raise lending interest rates further from current 19-24 percent p.a. as the move would be unaffordable to local enterprises, the SGTT added.

The source also reported that the central bank is stepping up to buy foreign currencies to improve the country's forex reserves, pointing out that decline in foreign currency sources must be balance with increase in dong supply to ensure stability in domestic currency's circulation and help to achieve inflation-battling goal.

Therefore, the SBV is expected to buy back dollars gradually, making dollar prices to continue to fall against the dong or stand at a "low level".

Vietnam's dong on April 29 advanced to a two- month high on speculation the supply of dollars has increased after the government capped deposit rates for accounts denominated in the US currency. Individuals and companies have been selling about $10 million to $15 million a day to banks, the government said in a statement on its website.



Vietnam mulls to disclosure national forex reserve

StoxPlus


Nguyen Van Giau, the governor of the State Bank of Vietnam, said he will discuss with government officials about making Vietnam's national forex reserve public.

Giau said he will discuss with ministers, look through the matter and propose to the minister for official disclosure as the national forex reserve has been rarely publicised so far.

The level of the central bank's independence and openness, including the publicising national forex reserve, are of great interest by ADB representatives at its annual meeting being held in Vietnam and chaired by Nguyen Van Giau.

Giau said the State Bank of Vietnam is a part of government but under 2010 Law on State Bank of Vietnam, the SBV still has its certain independence and self-control in policy navigation.

Giau said the SBV has built and implemented the roadmap of releasing information to the mass media, confirming the importance and necessity of information disclosure with monetary regulator's activities.

Regarding to money policy this year, Giau shared that tightening policy likely heavily affects business and investments but it helps tame inflation. Vietnam's current outstanding loans are equal to 120 percent GDP, much higher than other countries. However, the governor believed the rate will fall when the capital market develops.

The Vietnamese government has tightened policy since February by cutting down ten percent of its fiscal spending, raising rates and clipping its credit growth target to counter inflation, Giau reported.

ADB Country director to Vietnam Ayumi Konishi said the Vietnamese government has issued correct measures to curb inflation, however, policies will take time to be proved efficiency. Vietnam should consistently carry out the set measures to curb inflation, despite the fact that some businesses may face difficulties in borrowing capital from banks.

Inflation control in the regional countries, including Vietnam, will be discussed in the sessions of the Asian Development Bank (ADB)'s 44th Annual Meeting of Board of Governors. Besides, a wide range of issues will be discussed, including food security, the economic growth model, coping with instability of the hot money, infrastructure development and sustainable growth, Giau said.

Vietnam is one of ADB's 67 members. This is the first time that the country hosts the ADB annual meeting during its 45 years of ADB membership.

Vietnam is one of the biggest ADB-funded receivers, mostly in the areas of infrastructure development, social security, healthcare and alleviation of poverty. ADB pledged to grant Vietnam 1.3 billion US dollars per year besides supporting the country to expand other modes of lending to achieve the goals of sustainable growth and comprehensive infrastructure development, Giau said.



VietinBank signs comprehensive cooperation deal with Viettel

Thoi Bao Kinh Te




Vietnam Commercial Joint Stock Bank for Industry and Trade (VietinBank-CTG) on late April 28 signed a comprehensive cooperation agreement with Vietnam Military-run telecommunication firm (Viettel).

Under the contractual agreement, the two signatories will cooperate in sectors of investment, payment, capital mobilisation, credit activities, capital contribution, and joint venture to support each other in expanding and developing business operations.

Currently, VietinBank is Viettel's large financial partner in financing projects and advising the money inflow aiming to promote the growth of information technology sector in the country.



Vietnam's credit growth at 5.29pct in Jan-Apr: SBV

NDHMoney




During the first four months this year, Vietnam's credit growth was 5.29 percent, Nguyen Dong Tien, State Bank of Vietnam (SBV)'s deputy governor reported.

In Jan-Apr, the total means of payment saw a rise of 1.5 percent and credit growth at 5.29 percent, Tien said at a government press conference on April 29.

Tien added, the foreign currency market has become stable gradually. Individuals and institutions have started to sell US dollar to banks. The interbank average forex rate is close to the forex rate quoted at commercial banks. The gold and US dollar price indexes decreased and the gold price in the domestic market was lower than the world's price.

Regarding the ceiling saving rate issue, the deputy governor said there were also some suggestions proposing the central bank to consider the ceiling saving rate issue. However, SBV said that the country's inflation tends to be higher. Although the deposit rate was prescribed at 14 percent per year, some credit institutions still violated the regulation to offer higher saving rate.

"At this moment, the ceiling saving rate should be retained and it will continue to be considered and monitored in accordance with the market evolutions" Tien said.

Tien also shared "Presently, the central bank should not offer further tightening monetary policy. However, these existing policies should be retained as well as considered in the next three and six months".



ADB meeting to focus on important issues

VOV




The 44th annual meeting of the Asian Development Bank will focus on major issues such as food security, overcoming the middle-income trap, sustainable development, and climate change.

This was announced at a press conference which was held in Hanoi on May 2.

Some 3,600 delegates will attend the meeting including government leaders, governors of central banks, and ministers of economics and finance from 67 ADB member countries, as well as representatives from international financial organisations and groups, world-leading businesses, research organisations, non-governmental organisations, and the mass media.

Addressing the press conference, Nguyen Van Giau, Governor of the State Bank of Vietnam (SBV), said that the economic growth in Asia, especially in the post-crisis period, shows the region's dynamicity.

Asia's recovery reflects its successful restructuring and the close cooperation between countries in the region have helped it deal with the economic crisis effectively, Giau said.

The SBV Governor also answered reporters' questions on the implementation of the Vietnamese government's Resolution 11, as well as the country's high inflation rate and the government's measures to curb it.

Resolution 11 focuses on controlling inflation, stabilising the macro economy, and ensuring social welfare, he emphasized, saying he believes it will be carried out successfully.

On the sidelines of the meeting, there will be 20 seminars and country presentations including a seminar entitled "Asia 2050 - Pursuit of Growth, Sustainability and Well Being" that will focus on growth strategies for the next 40 years.

There will also be workshops offering investment opportunities in Vietnam.

Details of the meeting's agenda will appear on the official website at www.adb2011.vn.



MONEY POLICY - Vietnam cbank chief confident in inflation fight




Reuters















Vietnamese central bank governor Nguyen Van Giau expressed confidence on Monday in government steps to curb soaring inflation, days after raising key policy rates for the second time in a month in the face of stubbornly high prices.

Giau declined to say how much he expected inflation, which hit a 28-month high in April, to dent gross domestic product growth. The government is targeting 7-7.5 percent growth, but many economists say that range may be unattainable.

"We have begun focusing on implementing (inflation control policies), and they will surely have an effect in the near future," Giau told reporters ahead of an annual meeting of members of the Asian Development Bank (ADB) in Hanoi.

Authorities have raised various interest rates several times since mid-February, trimmed the official credit growth target for the year, cracked down on black market foreign currency trading and vowed fiscal spending cuts.

Giau said credit grew 5.6 percent by late April from the end of last year. The new target is to keep credit growth under 20 percent this year.

Managing rising inflationary pressures without derailing growth is expected to be a core topic at the ADB meeting that runs from May 3-6.

Indeed, the ADB warned last month economic overheating and inflation threatened a sustained recovery in parts of developing Asia, and said a sustained rises in food prices could pull tens of millions into poverty.

Ayumi Konishi, the ADB's chief representative in Vietnam, said monetary and fiscal tightening policies detailed in a mid-February government resolution were the "right set of policies".

"Economic policies always take time to get an actual impact. It's not like poison. You don't see the result overnight," he said.

"We do believe that from May onwards, at least on the monthly level, the monthly inflation rate should come down."

The consumer price index rose 17.51 percent in April from a year earlier after rising an annual 13.89 percent in March.

The April inflation rate was the highest since December 2008, and the economists say it follows an over-emphasis on growth last year and inaction in the face of signs that inflationary pressures were rising.

On Friday the State Bank of Vietnam increased both the refinance rate and the discount rate by 100 basis points.

Most economists believe inflation will not peak for several more months, and Konishi said the annual figure will start to abate in September.

"We hope that the government will be continuously determined to maintain this policy, and we certainly hope that the Vietnamese people will be patient," he said.

Economists say high inflation has persisted in part because of double-digit increases in the prices of electricity as well as petrol, diesel and other fuels.



IMF ON VIETNAM - UPDATE 1-Vietnam overdue for rate hike to fight inflation - IMF

Reuters




Vietnam is "overdue" for again raising its interest rates because of the country's high pace of inflation, an International Monetary Fund official said on Monday.

Benedict Bingham, IMF resident representative for Vietnam, said the State Bank of Vietnam (SBV), the central bank, should move "to ensure that inflation expectations don't become entrenched and put pressure on the dong."

"With inflation over 17 percent and SBV's policy rates at 13 percent, another increase in policy rates is now overdue. Maintaining a cap on deposit rates at 14 percent is also counterproductive," Bingham wrote in response to a question from Reuters.

Bingham's comment came a day after Vietnam said that annual inflation in April was 17.51 percent -- the highest level since December 2008 -- while on an monthly basis, inflation was 3.32 percent higher in April than March.

That was the biggest month-on-month increase since May 2008. Also on Monday, a government official said there was "much possibility" the April figure will be the "peak" for this year.

A government statement quoted Nguyen Duc Thang, head of the government's general Statistical Office's Price Statistics Department, as citing only the latest month-on-month increase, but did not make clear if he meant it or the year-on-year pace in April would be a peak for 2011.

Thang said the April number was high because of two increases in fuel-prices and a March rise in electricity prices. "In the next months, CPI could still rise but the pace will slow when the government's policies on inflation control and stabilising the macro economy have better effect," he said in the statement.

The statement, which said that monetary policies take time to take effect, did not make clear if any further specific measures would be applied to help arrest the price rise. Asked if the central bank would make any changes to its monetary policies to response to the price hike this month, governor Nguyen Van Giau declined comments.

JP Morgan Chase Bank has said in a report that it expects inflation to peak at 22 percent year-on-year in August and average 18 percent for 2011.

On April 1, Vietname raised its reverse repurchase rate by one percentage point, to 13 percent. The repo rate, which bankers said the central bank now treats as a benchmark, was 7 percent in early November 2010. Economists said Vietnam needs to find ways to tighten monetary policy further without causing a spike in interest rates that chokes business.



HCM City: inward remittance falls nearly 20pct in Apr

Tuoi Tre




The total amount of inward remittance sent to Vietnam via HCM City-based commercial banks and economic institutions in April reached only about $367.6 million, falling 19.6 percent from March due to the hardships from the world economy, according to the State Bank of Vietnam (SBV)'s HCM City branch.

According to some banks, the fall in inward remittance was attributed to the reduction of US dollar deposit rate at banks whereby the highest level is at only 3 percent per annum.

In the first four months this year, SBV's HCM City branch has revoked two licenses of two foreign exchange dealers due to inefficiently operations.

Presently, HCM City has 74 foreign exchange dealers.



Economy – Vietnam strives to keep inflation at 11.75 percent

VOV

The Vietnamese government will make every effort to keep this year’s inflation at 11.75 percent, a similar level to last year, said Minister of Planning and Investment Vo Hong Phuc.

Speaking at the Vietnam Business Summit during the Asian Development Bank (ADB) 44th Annual Meeting in Hanoi on May 3, Minister Phuc affirmed that the Vietnamese government gives top priority to fighting inflation.

According to the minister, the country’s CPI rose to 9.64 percent in the first four months of 2011, compared to a level of 7 percent set for the whole year, posing a big challenge for the country to curb inflation in the remaining months of the year, especially in the context of fluctuations in market prices.

Due to high inflation, the Government now sets this year’s GDP growth rate at 6.5 percent, slower than the initial target of 7-7.5 percent, Phuc said.

The Governor of the State Bank of Vietnam Nguyen Van Giau explained that almost all countries worldwide were facing difficulties when implementing their initial targets, which had been set before spikes in the price of farm produces, political unrest in Africa, and the earthquake and tsunami in Japan.

In early April, ADB forecast Vietnam’s inflation at 13.3 percent in 2011 while lowering the country’s GDP growth rate to 6.1 percent from a level of 7 percent it announced in September, 2010.





ADB chief warns on inflation, capital flows

AFP



Asian governments must keep a tight rein on inflation and may need to consider controls on capital flooding into the region, the Asian Development Bank (ADB) chief said Tuesday.

"Inflation will need to be carefully managed using a mix of policy measures - especially given the harder impact of inflation on the poor, which in Asia still number in the hundreds of millions," ADB president Haruhiko Kuroda told a news conference at the start of the bank's annual meeting in Vietnam.

The Manila-based bank, which aims to reduce regional poverty, said last week that governments had already moved to soften the impact of food inflation through measures including tax cuts for food, setting price controls and introducing subsidies.

But it said in a report that more needed to be done in the region, which has rebounded rapidly from the 2008 global economic crisis.

The bank warned that soaring global food prices threaten to push tens of millions of Asians into extreme poverty and cut the region's economic growth this year.

Domestic food inflation in developing Asian nations hit 10 percent at the start of this year, with double-digit rises in the price of wheat, corn, sugar, edible oils, dairy products and meat.

At the same time, global oil prices have also soared.

"Rising food and oil prices have been stoked by the unexpected upheaval in the Middle East and North Africa, while the devastating earthquake and tsunami in Japan have created further global unease," Kuroda said.

While battling inflation, Asia's governments are also dealing with inflows of capital which Kuroda said might need to be controlled "in some cases, in some countries, in some occasions."

But he said such controls should not be a regular policy instrument.

"Capital controls are really complicated policy tools, not so easy to carry out, and in the long run capital controls could create distortions in the capital market," Kuroda said.

The International Monetary Fund (IMF) last week said flows of money into Asia's surging economies remain a "key concern" for policymakers already battling inflation.

Those flows are "extraordinarily large" in some countries, including China, Indonesia and the Philippines, the IMF said.

Several countries - including South Korea, Indonesia and India - have tightened monetary policy to try to head off huge inflows of capital from investors seeking better returns on their money than in the sluggish West.

The incoming funds have boosted the values of many Asian currencies.

"Currency fluctuation has been a serious problem," Kuroda said.

Finance ministers of the 10-member Association of Southeast Asian Nations (Asean) last month expressed concern about the surge in capital flows, much of which has been in the form of portfolio funds that can be withdrawn just as fast as they are injected.

The Asean ministers are to meet again Wednesday on the sidelines of the ADB talks, with their counterparts from South Korea, China and Japan.

"I'm confident that they will continue to discuss and in the future will cooperate more concretely in exchange rate issues," which affect trade and investment relationships, Kuroda said.

"Regional cooperation on financial and monetary matters would become even more important in coming years."

Kuroda added the global economic crisis made clear the need for a well-built world financial system that can withstand shocks.

"Asia can play a vital role in this process by strengthening its own financial systems," he said.

The ADB forecasts 7.8 percent growth in Asia's developing countries this year, down from last year's 9 percent but "still respectable," Kuroda said.



Vietnam-Indonesia trade ties highlighted

Vietbiz24




The cooperation between Vietnam and Indonesia has been accelerated in recent years.

The Jakarta Post emphasized this in an April 30 article on the growing trade ties between Vietnam and Indonesia.

The newspaper cited the Indonesian Central Statistics Agency as reporting that Vietnam-Indonesia bilateral trade hit a record of $3 billion in 2010, up 46.5 percent against 2009.

In January this year, it jumped to $326 million, up 78.4 percent from the same period of last year, it said.

Many Indonesian businesses, like Ciputra Group, Indofood, Dynaplast, Sophie Paris, and others, have invested over $1 billion in Vietnam.

The two countries have also signed 41 agreements and memoranda of understanding in various sectors.



Vietnam prioritises inflation as Asian concerns grow

Reuters




Vietnam said on Tuesday fighting inflation took precedence over growth and as a result GDP would miss the official target, underscoring a key concern for the region as Asian officials met in Hanoi to discuss ways to pursue a sustained upturn.

Rising prices across the region must be "carefully managed" via a mix of policies to minimise the impact on Asia's vast population of poor people, Asian Development Bank President Haruhiko Kuroda said at the start of the ADB's annual meeting.

All major economies in the region have tightened monetary policy to contain inflationary pressures that have built up during a strong recovery from the global crisis.

On Tuesday, the Reserve Bank of India said fighting inflation was the priority as it raised interest rates by a higher-than-expected 50 basis points.

Volatile capital flows and surging commodity prices will be key topics of discussion when finance ministers from East Asia's top three economies - China, Japan and South Korea - meet with their Southeast Asian counterparts on Wednesday.

"The top priority is to fight inflation. We are no longer prioritising GDP growth. We want to keep GDP growth at a reasonable level that is acceptable in this inflation situation," Vietnam's minister of Planning and Investment Vo Hong Phuc said.

Growth was now expected to be 6.5 percent and inflation 11.75 percent in 2011, Phuc told a forum at the Asian Development Bank's (ADB) annual meeting in Hanoi.

The official targets, approved by parliament, are for 7-7.5 percent gross domestic product growth and inflation of 7 percent or less this year.

Vietnam's consumer price index rose 17.51 percent in April from a year earlier after rising an annual 13.89 percent in March, and is the highest among the major Asian economies.

Vietnamese authorities have raised various interest rates several times since mid-February, trimmed the official credit growth target for the year, cracked down on black market foreign currency trading and vowed fiscal spending cuts.

Carefully managed

Other Asian economies are also struggling with inflation pressures, particularly from rising oil and food prices.

"Inflation will need to be carefully managed using a mix of policy measures, especially given the harder impact of inflation on the poor which in Asia still number in the hundreds of millions," ADB President Haruhiko Kuroda said.

The ADB warned last month economic overheating and inflation threatened a sustained recovery in parts of developing Asia, and said a sustained rises in food prices could pull tens of millions into poverty.

India's central bank raised interest rates on Tuesday by a higher-than-expected margin and said fighting inflation was its priority even at the expense of short term growth.

The region's outperformance since the global financial crisis has also drawn large amounts of foreign capital seeking returns unavailable in most developed economies.

Those capital flows have seen currencies strengthen, something the export-driven region has traditionally resisted, and complicated policymaking by adding to domestic money supplies. Stronger currencies have also mitigated the impact of higher dollar prices for food and fuel.

"Currency fluctuation has been a serious problem in Asia Pacific, particularly in east Asia, including Southeast Asia," Kuroda said.

Kuroda, speaking to reporters at the ADB's annual meeting in Hanoi, said the bank's long-held position was that capital controls were acceptable in some circumstances, but should not be a "usual, ordinary or frequently used" tool. South Korea's finance minister said the government was not considering restrictions on non-deliverable forwards or imposing new capital controls beyond recent steps.

"We will focus on the existing three-way measures and are not considering introducing new measures," Yoon Jeung-hyun said in an interview.



Hanoi will reduce several public investment projects

VCCI




At a recent meeting, Hoang Manh Hien, vice Chair of Hanoi People's Committee, said: Having implemented solutions mainly focusing on controlling inflation, stabilising macro-economy and ensuring social security under the government's guidelines, Hanoi has reduced public spending and reviewed several public investment projects.

The city has issued a decision regarding assigning the saving target of an additional ten percent of frequent expenditure in the 09 remaining months in 2011, and temporarily stopping purchase of properties for budget-estimating units and other quarters, districts and towns. Total suspended expenditure for equipping cars, buying assets of great value, repairing offices (belonging to city budget) is 88 billion dong.

Stopping going on business abroad and reducing the unnecessary meetings and receptions have also been drastically and positively carried out by the city. Departments, local governments are implementing the review and reorganisation of fundamental construction investment from the budget or originated from the budget, temporarily halting the new investment project on construction of plan 2011. Projects, directly managed by the city, are initially proposed to be delayed or extended the progress or implementation period of 17 projects - Total investment of 650 billion dong has been adjusted down 103.6 billion dong; projects having the budget of quarters, districts and towns have proposed delay or extension of the progress of 97 projects (total investment 500 billion dong), transferred expenditure has cut by 119.37 billion dong.

Hanoi stabilises prices of 10 essential commodities in 2011 for businesses to store goods, and organisations issue stability of prices at 397 points. Hanoi Electricity Agency strengthens measures to ensure power supply on a reasonable basis for allocating assigned power output to the essential needs of society, and giving priority to production. The city is developing plans to support the electrical price for poor households so that they can afford the electrical price at the first level.

According to Hien, in the next time, the city still continues to review, suspend, delay, and extend progress of projects invested by the state budget which are slowly implemented, non-urgent or difficult to be carried out in 2011, or are facing difficulties in site clearance or other problems in implementation. The city also concentrates sources of capital for urgent works and projects on technical and social infrastructure, vital social services, and the agricultural and rural fields. These projects include housing development for students, students' facilities and accommodation for the training institutes and for workers in concentrated industrial zones, and for low-income people in urban areas. On the other hand, he said in the nine remaining months of 2011, the city strives for clearance of 2,891ha in 326 projects and the resettlement of 9,658 households.

In particular, the city will focus on hastening the implementation of projects aiming to improve the Hanoi urban environment, such as starting construction of sewage treatment station of Lenin Park (13.000m3 per day); maintaining rivers, ditches, sewers and pumping stations, regulate lakes; and handling thorough flooding sites to ensure better drainage in the rainy season of 2011. Moreover, the city also expedites the investment in Nam Son rubbish treatment dump - phase 2, Son Tay rubbish treatment dump - phase 2 stage, and a number of waste treatment sites in some districts; steps up the implementation of protection projects of Nhue - Day River environment; anti-noise, anti-dust in the city; accelerates socialisation; and organises the collection, transportation, burial and waste treatment in the area well. Besides, the city pays attention to the maintenance and good operation of current lighting system, the renovation and upgrading of urban lighting systems on traffic routes and streets of quarters and towns, townships, suburban districts; speeds up construction and renovation of the Yen So Park, Tuoi Tre Park, Thu Le zoo, Nhan Chinh Park, Dich Vong Park, and Mai Dich Park.

It is known that in quarter I of 2011, Hanoi achieved significant economic growth rates, the total gross domestic product GDP grew by 9.2 percent in comparison with the same period of the year 2010.



Footwear exports go up 26.4pct

news.gov.vn





Vietnam earned over US $1.74 billion from shipping footwear abroad in the first four months of this year, making a year-on-year increase of 26.4 percent, according to the general Statistical Office (GSO).

The GSO said that the EU remains the biggest footwear importer of Vietnam with US $511 million in revenue in Q1 of this year, up 13.3 percent against the same period last year and accounting for over 40 percent of the country's total footwear export turnover.

Export volumes to the US, Japan, Belgium, Holland, France, Denmark and Czech also rose by between 20 - 60 percent.

The EU's removal of anti-dumping duty on Vietnamese leather-capped shoes on April 1, 2011 would help stabilise the export of this commodity in the near future, said general Secretary of the Vi?t Nam Leather and Footwear Association (LEFASO) Nguyen Thi Tong.

LEFASO forecasted that footwear exports this year would earn US $ 5.5 billion in turnover./.



'Big efforts to keep 2011 inflation at 11.75pct', investment minister says




Vietbiz24

















Vietnam's Consumer Price Index (CPI), which rose 9.64 percent in first four months of 2011, is the big challenge for lawmakers while its target is to keep 2011 CPI at 7 percent as approved by the National Assembly, minister of Planning and Investment Vo Hong Phuc said at the 44th business summit held in Hanoi.

Factually, the government is attempting to curb this year's annual inflation at 11.75 percent which is difficult to be reached due to the further increasing tension in domestic and international prices, he noted.

Concerning the economic growth amid high inflation condition, the government estimated that 2011 growth rate was to be only 6.5 percent, much lower than the targeted 7-7.5 percent.

Given explanation about the failure in implementing the set targets, the SBV Governor Nguyen Van Giau said this was the common issue of most countries in the world this time while the global economy is moving with complicated events.



Vietnam's fiscal deficit passes half ab dollars

Thanh Nien




Vietnam's fiscal deficit as of April 15 is estimated to be 12 trillion dong (US$585 million), the general Statistical Office said Wednesday.

The office said more than 202 trillion dong was spent from the state budget, compared to a total budget revenue of 190 trillion dong.

Vietnam's government is targeting a budget deficit of below 5 percent of its gross domestic product for 2011. The target was revised down from an original 5.3 percent of GDP, equivalent to 120.6 trillion dong.

The government in February ordered ministries and agencies to withhold 10 percent of non-essential expenditure for the rest of this year.

Vietnam hopes FTAs will bring more opportunities to expand export markets




Vietnamnet















If Vietnamese enterprises have thorough preparations, they can take full advantage of the opportunities to be brought by free trade agreements (FTA) between Vietnam and other countries in the world.

Vietnam is under the negotiations for a series of FTA with countries and blocs. According to the Ministry of Industry and Trade (MOIT), to date, Vietnam and Chile has conducted seven negotiation sessions on a bilateral FTA. The ministry believes that it is very likely that the two sides will reach an FTA after some more negotiation sessions.

Meanwhile, Vietnam and Canada have reached the consensuses on basic points for the Foreign Investment Promotion and Protection Agreement FIPA, which is expected to be signed right in 2011.

The issues relating to the possible impacts of the FTA on the Customs Union of Russia, Belarus and Kazakhstan, are being considered by the Vietnamese agencies and the union's agencies. Recently, the EU has been joining forces to organise events in Vietnam where the advantages are analysed if the two sides sign an FTA.

The European Free Trade Association EFTA, including Norway, Switzerland, Iceland and Liechtenstein, and Vietnam, have formed up a taskforce in charge of researching and reporting the possibility to conduct negotiations for an FTA between Vietnam and EFTA.

In Asia, Vietnam, as a member of Asean bloc, is joining the FTA negotiations with big partners. Besides, it is also possible that Vietnam would conduct negotiations for the FTA between Vietnam and Laos and between Vietnam and Taiwan.

The Trans-Pacific Strategic Economic Partnership Agreement or TPP, if successfully negotiated, is believed to help open the door to one of the most important market area for Vietnam. At the latest sixth negotiation rounds, the countries including Brunei, Chile, Malaysia, New Zealand, Australia, Peru, Singapore, the US and Vietnam discussed the issues relating to the trade promotion.

TPP is the area which has the gross domestic products GDP of up to 16 trillion dollars, the total population of 472 million. TPP has been described as the most ambitious trade integration process in the history of Asia-Pacific.

With the FTA which were signed or will be signed in the future, Vietnamese enterprises have a lot of opportunities to expand the export markets.

As for the export to the EU, for example, experts can foresee the sharp increases in the export of some product items to the market, once the FTA between Vietnam and EU is signed and takes effect.

If Vietnamese garment products can enjoy the import tariff of zero percent when entering the EU market, they will have big advantages over the products from Bangladesh, China, India or Pakistan, because the products from the nations are imposed the average tax rate of 11 percent, according to Claudio Dordi, an expert from Multrap project (the European Union's Multilateral Trade Assistance Project).

The same advantages will also be enjoyed by Vietnamese footwear producers once preferential tariffs are applied under the frame of the Vietnam-EU FTA.

Regarding the Russian market, Le Van Dao, deputy Chair of the Vietnam Textile and Apparel Association (Vitas), said Vietnamese enterprises can exploit the market and can raise the export turnover to Russia to one billion dollars, if they can enjoy preferential tariffs.

Russia is the market which has a very high demand for garment products, but it is imposing overly high tariffs, therefore, Vietnamese garment companies still cannot cement their positions in the market.

"However, the situation will be different, and Vietnamese enterprises will have opportunities to boost exports to the market if an FTA is signed," Dao said.

In fact, Vietnamese enterprises still cannot take full advantage of the signed FTAs. For example, the growth rate of garment exports to Japan is modest at 10 percent per annum.

Vietnam trims growth forecast

Wall Street Journal


Vietnam trimmed its economic growth forecast and sharply raised inflation expectations, as the government battles to restore economic stability.

The country is now targeting gross domestic product growth of 6.5 percent this year, from an initial target range of 7 percent-7.5 percent, minister of Planning and Investment Vo Hong Phuc said Tuesday at an annual meeting of the Asian Development Bank.

He said the government also will attempt to maintain inflation at last year's level, 11.75 percent. The country had earlier set a target of capping 2011 inflation at 7 percent.

"Vietnam will now focus on taming inflation this year," Phuc said, adding that consumer prices have already risen by 9.64 percent as of the end of April, compared with the end of 2010. "The task is very challenging in the remaining months of the year."

State Bank of Vietnam Gov. Nguyen Van Giau said the initial targets were made "before recent unexpected events in the world, including the earthquake in Japan and political events in Libya."

The decision to revise the forecasts follows a slew of poor economic data from Vietnam, where the government is facing a tough task of revitalising what was once one of the most promising emerging economies.

HSBC economist Sherman Chan said the downward GDP revision brings it closer to the house's projection of 6.8 percent expansion this year. The bank, however, tips inflation to average 14.3 percent this year. "The government's new target, despite a sharp upward adjustment, still seems very optimistic in light of the surge in global food and oil prices. I won't be surprised if there's another upward revision later on," she said.

Price pressures have been building rapidly, with inflation rising 17.51 percent in April from a year earlier, the fastest pace since December 2009. In monthly terms, inflation accelerated to 3.32 percent in April, the fastest pace since May 2008.

Slackening that rise in costs won't be easy after the government raised electricity prices by more than 15 percent in March and lifted the cost of fuel by more than 20 percent in the first quarter. The administration has also said it will allow state-owned Electricity of Vietnam to raise prices further later in the year.

However, the government has been taking some steps to help stabilise the economy by tossing aside its longstanding policy of focusing on growth. It has vowed to tackle inflation by tightening monetary and fiscal policy and last week reportedly proposed cutting public investment by 96.89 trillion dong ($4.69 billion) this year-equivalent to 10 percent of the country's planned 2011 investment and far more than the 50 trillion-dong reduction the government approved last month. Vietnam's central bank also last Friday raised two key policy rates on dong-denominated loans by one percentage point, which could potentially crimp credit growth.-by Trong Khanh, Leigh Murray





PROPERTY – Green buildings can win

Vietbiz24



The vacant room space of office buildings in HCM City reportedly accounts for 25 percent of the total 1.6 million square meters available while supplies are expected to increase by 1 million square meters within the next three years. This situation forces proprietors to adopt new ways to better compete.



The pharmaceutical group MSD’s newly opened HCM City office is on the 16th floor of the downtown Kumho Asiana Plaza building, located at the Hai Ba Trung-Le Duan crossroads in District 1, covering over 1,000 square meters. This was rare in previous years when business groups could hardly lease such a large area due to limited supplies.

Like MSD, local and foreign companies can now easily afford to lease good locations at office buildings in the city at competitive prices, lower than half of the previous three years’ rents. According to Chris Currie, head of office services section of CB Richard Ellis (CBRE) Vietnam, the rents of offices of grades A and B have dropped by 1 percent and 5 percent respectively, staying at US$30-35 per square meter and US$20-25 per square meter.

Although office rentals have fallen sharply, owners of subsequent office buildings can only lease all their floor space after a long time. Modern high-rises with good locations such as Kumho Asiana Plaza and Central Point needed 12-16 months to lease 80-90 percent of their floor space, Currie said.

Meanwhile, new buildings such as Vincom or Bitexco Financial Tower, which possess very good locations and are among the city’s architectural features, have managed to lease out only 30-35 percent of their floor space.

A series of office building projects developed on Ham Nghi, Nguyen Cong Tru, Dong Khoi, Nguyen Dinh Chieu, Vo Van Tan and many other streets in various districts show office supplies will continue to soar in the coming time. Small and medium enterprises or individuals having good sites have also built small office buildings for lease.

Perhaps, from the current office surplus crisis, the relationship between tenants and proprietors on the office services market is being re-adjusted.

More services, less fees

Office building developers are now more patient, open-hearted and considerate to clients than in the heyday of this service in 2007-2008. Estate brokers said the owners of new buildings must actually compete in rentals and service quality to attract tenants from older high-rises.

Learning that tenants’ moving offices is unavoidable, many owners of office buildings keep their clients by their own ways. Zen Plaza, located on Nguyen Trai Street, District 1, still maintains its floor occupancy rate of over 90 percent even though its rents are considered high compared with other Grade B office buildings. What makes the company successful, according to its representative, is that the company offers its clients care, incentives and best services. On the other hand, the company is also ready to divide the floor space into small sections to lease to small and medium enterprises though this requires more management costs. In addition, a prerequisite of Zen Plaza is that it always keeps its prestige and creates trust in clients in all circumstances.

Trung Thuy Group can maintain occupancy of more than 90 percent of office space of its two buildings, The Lancaster and Miss Aodai in District 1. According to its representative, the company manages business and provides services for tenants on its own, so it can save a big brokerage to offer more competitive rents and understand the clients’ true demands to meet them properly.

Other office building owners also acknowledge they have to give more flexible, attractive conditions than before. Many proprietors are now willing to sign long-term leasing contracts at lower rents. They offer incentives to clients through publicizing their images in and outside the buildings. They also share with their tenants the costs of power, water, and services as well as increase their after-sales services.

Creating differences

“The time for us to build [office buildings] and wait for clients has gone,” said Nigel Smith, managing director of CBRE Hong Kong, at the office leasing forum in HCM City last week. According to him, like the office building markets in other countries, HCM City begins to have many vacant Grade A offices.

According to Smith, in the golden time for office leasing in the 1980s and 1990s, investors often emphasized the word “strategic location” to raise the value of their buildings. However, since 2010, they have switched to stressing the stability and the working environment. As shown by a CBRE survey on global tenants, the new target of the 2010s is the tenant, not the proprietor. Office building developers worldwide are seeking new ways to market their buildings to draw tenants with an intention to improve the quality of life for their employees and the community.

Employees nowadays need a working place of higher quality and often choose companies through the shape of their offices or the image of the building where they will work. They like buildings with greenery, impressive corridors, fast elevators and easy communications. Similarly, tenants like uninterrupted power supplies, green air-conditioning systems and high-speed communications.

For business leaders, they like buildings with guaranteed safety in which a risk management system enables them to observe and control the situation. “Office buildings are not only big boxes but they should also be dynamic, nice and interesting works of art,” said Smith.

Investors must create in their clients a feeling that their buildings are not ordinarily deluxe but more deluxe or superdeluxe so they can attract tenants, Smith said.

One of the elements that create the superdeluxe value for buildings as Smith proposed is to build the image of a community-oriented building. He gave an example that in Hong Kong, Hongkong Land that has five big buildings in the city downtown proposed building sidewalks around their buildings at its own cost though this is the job of the authorities. The sidewalks add beauty to the buildings as well as create the image for a community-oriented company, he said.

A common trend in Europe, the Americas and even Asia now, according to Smith, is to set up green buildings that can save energy, minimize the emission of carbon dioxide, and filter noise. The greenery not only helps create a more comfortable working environment for employees inside the buildings but builds an image of the building operator’s social responsibility as well. According to Smith, that proper image for each building is very significant. It leaves a good impression on the community and employees working therein will also be proud of that.



Middle-income flats have bright future

VNS



Apartments for middle-income people offer a major growth segment in the domestic market for the coming time, say experts.



These include apartments measuring from 60-100sq.m and priced around 800 million - 1 billion dong ($38,090 -46,619) and are primarily located in new urban areas, they say.

Nguyen Van Duc, deputy director of the Dat Lanh Property Ltd Company, said many property companies developed apartments for middle-income people replacing luxury apartments in investment strategies, because of high demand and their rapid rate of return on the invested capital.

Pham Thanh Hung, deputy general director of the Cen Group, said the new wave in middle-income housing from investors was due to the difficulties they were facing in raising enough capital for luxury apartment development due to high interest rates. This was also compounded by a current glut in the supply of luxury apartments.

Investors in the luxury apartment sector could face 5-7 years before registering return on their investment. Meanwhile, middle-income apartments would need only two to three years, he said.

According to the Dat Lanh Property Ltd Company, 80 percent of total apartment transactions was focused on the trade of apartments for middle-income people with an average value of around 1 billion dong in the HCMC market.

Dang Van Thanh, a property expert in HCMC, said this kind of housing had proved suitable for lower earners, as investors had not spent much on the interiors and the buildings were generally located in the suburbs.

A shift to middle-income earner apartments would heat up the domestic real estate market that had slowed to almost a halt, Hung said.

However, buyers of these apartments also face problems, as interest rates for bank loans are still far too high. Potential co-operation between property investors and the banks to provide subsidized interest rates is highly anticipated.

Meanwhile, Le Chi Hieu, chairman and general director of Thu Duc House Development Company, said it was difficult to cut apartment prices because inflation had forced up the price of material and labor in construction.



HCM City rises in the east

VNS



HCM CITY — The eastern part of HCM City has been transforming rapidly thanks to several key transport projects and new modern urban areas with high rises that are springing up along the Sai Gon River.

The East-West Highway, which was given the name of former Prime Minister Vo Van Kiet last week, was partially completed last year and acts as an artery for the city, facilitating traffic between the downtown and outlying areas and, thus, their development.

When the Thu Thiem Tunnel under the Sai Gon River is opened in the middle of this year, the 20km, six – to eight-lane highway will be completed.

Beginning from National Highway 1A in Binh Chanh District in the west, it will run through districts 6,5,4,1, and 2 to link up with the Ha Noi Highway, allowing traffic from Sai Gon Port to the Cuu Long (Mekong) Delta and southeastern provinces to bypass the city centre.

Another strategic structure, the Phu My Bridge, connects districts 7 and 2 across the Sai Gon River, easing cargo transport to and from Cat Lai Port and traffic between southeastern provinces like Ba Ria-Vung Tau, Dong Nai and Binh Duong and the Cuu Long Delta without the need to go around on Highway 1A.

This bridge also helps shorten the District 2-District 7 route by 10km.

Between 2005 and 2010, around 210km of new roads and 50 bridges have been built in addition to the upgrade done to the Nguyen Van Troi-Nam Ky Khoi Nghia axle and Thu Thiem Bridge.

Under a Ministry of Transport development strategy, by 2020 ring roads and expressways will be built to inter-link the Southern Key Economic Region including HCM City, Tay Ninh, Binh Duong, Dong Nai and Ba Ria-Vung Tau.

According to the My Thuan Managing Board, a major MoT agency that develops transport infrastructure in the south, it has reported to the ministry about building Ring Road 3 this year.

The 89km road will run through HCM City (49 km) and Dong Nai, Binh Duong and Long An provinces.

The ministry also planned to start work on the 58km Ben Luc – Long Thanh Expressway from Long An to Dong Nai through HCM City in 2012, the board said.

Work will continue on some 20 major projects in the city.

District 2 makeover

District 2 is divided from the downtown area by the Sai Gon River, and travelling between the two was a problem even two years ago, when it had to be done either by the Thu Thiem ferry or by roundabout routes.

The Thu Thiem Bridge, which links it with Binh Thanh District, has made it much easier, and the situation will further improve when the Thu Thiem Tunnel opens.

Even as recently as 1997, District 2, whose 5,000ha is mostly low-lying and alkaline, had poor infrastructure for education, culture, health and road, and residents had little accesses to clean water and electricity, according to Le Hoang Chau, chairman of the HCM City Real Estate Association.

HCM City sought to turn the district into an international trade, services and financial centre.

Things have changed now and it is becoming a satellite urban area for the city. Commercial and residential projects cover more than 90 per cent of the district.

Besides the Thao Dien Villa project by the Sai Gon Riverside, many other high-grade projects like Estela, Cantavil An Phu and Cantavil Premier are taking shape on 90ha in the An Phu-An Khanh urban area, making it one of the most beautiful in the city.

Many other housing projects too are under way.





Realty firms post unsatisfactory business results in Q1

Vietbiz24



Six companies operating in the real estate sector have recently announced the business results in the first quarter of this year with unsatisfactory figures in comparison to the same period last year.

Binh Chanh Construction Investment Joint Stock Co (HOSE-BCI) said its revenue at 54 billion dong, falling 32 percent year-on-year and 57 percent fall in after tax profit to reach only 13 billion dong in Q1.

Construction Development Investment Joint Stock Corp (HOSE-DIG) announced its revenue in Q1 at 74 billion dong, down 45 percent y-o-y and after tax profit at 24 billion dong, down 53 percent.

Ending Q1, De Tam Joint Stock Co (HOSE-DTA) reported gaining 11 billion dong revenue, up 2 percent y-o-y, and 899 million dong after tax profit, down 68 percent y-o-y.

Can Nha Mo Uoc (Dream House) Investment Joint Stock Co (HOSE-DRH) said its revenue at four billion dong in Q1, down 86 percent y-o-y, and after tax profit at 583 million dong, falling 75 percent.

Khang An Real Estate Investment Joint Stock Co (HOSE-KAC) announced its Q1 revenue at 15 billion dong and 508 million dong after tax profit, down 45 percent and equaling to 6 percent year-on-year.

Long Giang Urban Development and Investment Joint Stock Co (HOSE-LGL) said its Q1 revenue at 68.8 billion dong and 6.9 billion dong after tax profit, up 62 percent and equaling to 36 percent year-on-year.



VinaCapital wins Asian property awards




The Saigon Times Daily















VinaCapital, an asset management and real estate development group, says its Ocean Villas luxury residential villas project underway in the central coast city of Danang has won two categories in the 2011 Asia Pacific Property Awards.

The group says the category of 'Best Golf Development' award recognised the Ocean Villas as an integrated beachfront golf course development.

Meanwhile the other category of 'Best Marketing' award is given for the launch of the VinaLiving residential brand, and the Ocean Villas was the first VinaLiving project to reach the market.

The 21-hectare villas project has 115 housing units and is part of the 260-hectare Danang Beach Resort project, which includes an 18-hole Dunes Golf Course designed by golf legend Greg Norman.

The presentation of the awards will be held in Shanghai on May 30 and 31, and later this year, top scoring winners from the Asia Pacific Property Awards will compete against other winning companies from Europe, Africa, the Americas and Arabia to find the world's best in each category.

The fund manager last week announced the appointment of new members to its board of directors and advisory committee.

Terence Mahony has succeeded Horst F. Geicke as chair of the group and Pham Phu Ngoc Trai has been appointed to the post of co-chair of the group's advisory committee.

Meanwhile Stephen O'Grady has resigned from VinaCapital after nearly five years working as a managing director of the company's hospitality division.

In related news, the fund manager said it saw a strong business performance in the first quarter of this year with a total of 264 sale and purchase and capital contribution contracts being signed, with a value of nearly $21 million.

VinaCapital says the sales figure for this year's first quarter was higher than the $7.4 million in sales recorded during the same period in 2010.



DID invests 20b dong in Phu Long Tan urban area project




Vietstock















DIC Dong Tien Joint Stock Co (HNX-listed DID) has lately approved the investment plan in Phu Long Tan urban area in the 2011 AGM. The company planned to invest 20-25 billion dong in Dong Nai province-based project.

DID planned to raise chartered capital in order to make investment in the project. In addition, the company will also build the new commercial concrete-making station in Bien Hoa City, Dong Nai province with estimated cost of 10 billion dong.

This year, DID expected to reach total production output of 160 billion dong, revenue of 120 billion dond and after tax profit of 11 billion dong.

The company will pay 2010 dividend at ratio of 14 percent in cash.



New urban area in Da Nang City to be introduced to public

Dau Tu




Phuong Trang Real Estate Joint Stock Co (Futaland) and Savills Vietnam Co yesterday officially introduced the Phuong Trang new urban area project, Da Nang Bay yesterday April 28, 2011. To be sited in an area of 147 hectares, the new urban area project included villas, semidetached houses, hotel and trade centre complex, supermarket, schools and green parks.

The customers and investors who are interested in the project can find detailed information relating to the products and sales programme in the showroom near Song Han Bridge, in the corner of Trand Hung Dao St, Da Nang City from now up to May 2, 2011.



Investment licence for My Khe resort and tourism complex to be revoked




Dau Tu















Quang Ngai province people's committee has recently assigned the provincial department of planning and investment to finish checking and revoking the investment licence for My Khe resort and tourism complex project before May 5, 2011.

The Quang Ngai province department of natural resources and environment was supposed to submit the decision for revoking the land to the local people's committee before May 10, 2011.

Anh Sao Co Ltd was the main investor for My Khe resort and tourism complex project with registered investment capital of 1 trillion dong. Quang Ngai province people's committee had issued the investment licence since 2008 and the decision for leading land since 2009. However, up to now, the investor has not carried out the projects as committed yet.



Property market bustling with M&A this year




VIR















Following the tendency last year, Vietnam 's property market is bustling with a large number of merger and acquisition (M&A) deals that also see the largest volume of trading value.

According to Troy Griffiths, an expert with Savills Vietnam, there is a need to quickly establish capital mobilisation funds by investors who boast a large number of land reserves but face difficulties in accessing capital, resulting in the rising number of M&A deals.

Dang Xuan Minh, director of AVM Vietnam, M&A research and advisory company, said that the rise in M&A deals in the real estate sector is attributed to the bloom of themarket which was seen in rising property prices, and a considerable amount of capital flown into the market.

M&A is an effective tool to promote revenue growth and restructuring and screen the most competent investors to carry out the projects, Minh said.

He said that with potential in capital, foreign investment funds and enterprises and strong domestic private conglomerates will have advantages at M&A deals.

Since the beginning of this year, the property market has witnessed a series of major M&A deals, as evidenced by Thien Minh Tourism Company's acquisition of a chain of six hotels and resorts from Hong Kong's EEM Victoria valued at $45 million and Vinaland Company's transfer of all shares in a housing development project to a Vietnamese partner, worth up to $10.9 million.

Concerning this activity, Vietnam Investment Review newspaper and the AVM Vietnam Company will host the M&A Vietnam 2011 forum, themed "Time to Deal" in HCM City on June 9.

A seminar on M&A strategy and an exhibition to introduce businesses and investment promotion opportunities will be also held at the event.



FPT to kick off construction on Da Nang technology and urban zone soon

ICTNews




FPT Da Nang Urban Joint Stock Co, under FPT Group, on April 27 said that it would officially begin construction on FPT Da Nang technology and urban zone (FPT City Da Nang) in Ngu Hanh Son district in the central coastal city of Da Nang on April 29.

This is the first model technology urban zone in Da Nang and the central of Vietnam with an area of 181 hectares and will be linked to important main roads in Da Nang city. The $1 billion project designed by the US-based SOM Co (Skidmore, Owings and Merrill LLP) will include the 25 hectare FPT University, a 33ha software park.

The first stage of the project is expected to complete in 2013.



Vietnam's low-cost housing price higher 2 times than regional average




Vietbiz24




















The price of low-cost houses in Vietnam now is 2 times higher than surrounding countries' average because the domestic housing construction price is heavily dependent on many unrighteous factors, the An Ninh Thu Do newspaper reported on April 26, quoting Nguyen Truong Tien-Vice chair of Vietnam's Association of Construction Contractors as saying.

In Hanoi, some investors of cheap housing projects are proposing a price of 11 million dong per square equaling to $560 per sqm that is 2 times higher than regional average. Some realty developers said that if getting land rental incentives or exemption, the construction cost for low-income earners will be only 5 million dong per square meters, he noted.

Meanwhile, a German-Malaysian joint venture group in Vietnam is offering a technology of constructing 20-storey housing building at a price of only $250 per sqm with an equivalent quality that Vietnam is doing. In his point of view, the construction cost of cheap housing projects should be at more than 5 million per sqm suitably in respect to relatively good geological ground (the cost excludes costs for ground clearance).

He attributed the difference in cheap housing prices of three big cities (11.6 million/sqm in Hanoi, 8.5-10 million/sqm in HCM City, and 5.2 million/sqm in Da Nang) to levels of construction engineering and designer teams, supervisors and materials... Enterprises in Da Nang have qualified management level and are aware of applying more new technologies than other provinces/cities.

Ministry of Construction has submitted the National Housing Project that lacks the role of technical sciences and technologies resulting in cheap prices.



UDEC offers apartment in Bau Sen project

Dau Tu Chung Khoan




The UDEC Real Estate Exchange recently started offering apartments in Block A and Block B under Bau Sen high-rise apartment complex, Vung Tau City. The offered price ranges from 14.2 million dong per square metre, excluding VAT and 2 percent of maintenance charges.

The project was sited in the corner of Hoang Hoa Tham St and Vo Thi Sau St, in the centre of Vung Tau City, including two 25-storey blocks and one basement for parking. The first three floors would be used for public services and trade centres, the forth floor for community space and shops and the 5th to 25th floor for high-class apartments. There were 588 apartments in two blocks, with area ranging from 80 to 170 square metres.

The construction works on Bau Sen apartment complex was expected to be completed in Q2 of 2012.



Resources – Electricity price should have been raised by 50pct instead of current 15pct

Vietbiz24

In the periodical meeting held by the government's office in April, the minister of finance stated that it was hard to manage the prices in the current economic situation.

The fluctuation of the world prices has put much pressure in the price management methods for basic commodities.

However, the authorities will adjust the prices of these commodities following the roadmaps. For example, the electricity price should have been raised by 50 percent but has currently been adjusted to surge by 15.28 percent only. The prices for other commodities such as petroleum, coal will be adjusted on the similar principle.

The statistics released by the ministry of planning and investment showed that the consumer price index (CPI) in April increased by 3.32 percent month on month. In comparison with that of December 2010, the April CPI rose by 9.64 percent, while the average CPI in the first four months of this year surged by 13.95 percent against the same period last year.

Recently, the prime minister asked the ministries and relating departments to limit the inflation rate at 12-13 percent this year.



PetroVietnam gains 205tr dong revenue in Jan-Apr

Vietbiz24



Vietnam National Oil and Gas Group (PetroVietnam-PVN) has recently announced the business results in the first four months of this year with satisfactory figures.

Accordingly, the group said its total revenue at 205 trillion dong or 41 percent of the year's plan and up 49 percent year on year, of which, revenue from oil sales reached $3.7 billion, or 132.1 percent over the plan in Jan-Apr and 43.7 percent of the year's target.

In Jan-Apr, the total oil output reached 7.97 million tons or 34.4 percent of the year's plan, of which, oil exploitation was 4.84 million tones or 32.2 percent and gas exploitation at 3.14 billion cubic meters, or 38.3 percent of the year's plan.

Also in the first four months of this year, the group's total investment was 30 trillion dong, or 23 percent of the year's target. The group also reviewed and suspended 12 ongoing projects and relaxed the tempo of 44 investment projects capitalized at over 7.25 trillion dong.





EVN's real debts estimated at over 9tr dong

Vietbiz24



Electricity of Vietnam (EVN) has recently admitted its total debts at 6.6 trillion dong at Vietnam National Oil and Gas Group (PetroVietnam-PVN) and Vietnam National Coal and Minerals Industry Group (Vinacomin) and it may be unable to repay these debts.



However, according to the information from Saigon Tiep Thi newspaper, EVN's real debts at these groups till the end of April 2011 were estimated at above nine trillion dong.

In particularly, EVN's debt at PetroVietnam Power Corp (under PetroVietnam-PVN) is estimated at nearly 5.16 trillion dong, its debt at offshoots of Vinacomin at over 552 billion dong and its debt at other electricity firms at nearly 3.36 trillion dong.

These debts exclude the debt for coal purchase at Vinacomin, and actually, EVN's owe at Vinacomin is much higher than the reported figure. Saigon Tiep Thi newspaper cited information from Vinacomin showed EVN's total debts at Vinacomin's subsidiaries are over 1.5 trillion dong.

According to Dinh Quang Tri, EVN's deputy general director, in 2010 EVN posted a loss of over eight trillion dong.

Most recently, EVN has proposed to borrow capital from the state budget for its debt repayment purpose to creditors and will use its revenue from electricity price rise to pay for this loan.

EVN also proposed the prime minister to direct PVN and Vinacomin to continuously supply coal, oil and gas to serve the electricity production and share financial difficulties with EVN by giving an extension for its debt repayment.





Peak power supply to be maintained in dry season

Vietbiz24



HA NOI — The Ministry of Industry and Trade's Electricity Regulatory Authority announced yesterday that there would be no peak time power cuts in the dry season from May to June.

The ministry has instructed the Electricity of Viet Nam (EVN) to ensure there were no power cuts over the holiday period from April 30 (Liberation Day) to May 1 (May Day), and during the next parliamentary elections (May 15-30).

EVN will also look at ways to ensure demand is met during peak periods in June.

The ministry has asked EVN to mobilise coal and gas sources to ensure energy needs are met.

EVN has also instructed its member companies to ensure repairs and maintenance are promptly carried out, particularly at new coal thermo-electricity plants in the north.

The ministry has asked Phu My-Ba Ria, Nhon Trach and Ca Mau complexes to use oil to power their turbines when there is a gas shortage.

EVN has also been urged to complete work on Son La, Hoa Binh, Thac Ba and Tuyen Quang reservoirs in the flood season.

It should also raise public awareness of the need to save power.

In the first four months of this year, EVN imported and produced 33.65 billion kWh of electricity, an increase of 10 per cent against the same period last year.

There were also no power cuts in the first four months of this year.

An EVN representative said power output this year should meet demand if weather conditions were favourable and electricity consumption did not rise above 15 per cent against last year.

She said in the first quarter of this year, power demand increased by 10 per cent over the same period last year, while a 15 per cent rise forecast had been predicted.

"Despite increasing electricity prices, power demand among households rose by 5 per cent," she added.

"Son La Hydropower Plant in the northern province of Lai Chau produced an extra 400MWh of power to the national grid. EVN has also put three turbines into operation with a total capacity of 515MW this first quarter," she said, adding that the country had produced nearly 1,400MWh this year.



Dealers hoard petrol as price hike nears

VNS



MEKONG DELTA — Expectations of an impending price hike prompted petrol stations in several Cuu Long (Mekong) Delta localities to close down and/or rationed fuel sales during the just concluded Liberation Day and May Day holiday.

These actions caused many difficulties for residents as well as those passing through the localities with motorbikes, cars and boats, local reports say.

The Tuoi tre (The Youth) newspaper reported yesterday that many petrol stations on a 30km stretch on National Highway No53 that runs the Cau Ngang and Duyen Hai districts in Tra Vinh Province remained closed on Monday.

This was also the case on National Highway No54 sections in Tra Cu and Cau Ke districts in the same province, it said.

Several stations hung signboards outsider that read "power outage", even though there was evidently no power cut in the area.

An employee of a petrol station belonging to Petrolimex Tra Vinh in Long Toan Commune, Duyen Hai District, said that they remained opened on Monday but only sold fuel to regular customers since they had limited quantity of petrol in stock and most private outlets in the area were closed.

Many residents said that stations that were operating capped sales per customer to two litres or even VND20,000 (US$0.96) worth of fuel per motorbike.

In Long An Province, many petrol stations in Tan Thanh District closed due to a power outage, making it difficult for farmers to irrigate their summer-autumn crop.

The Phuc Hung petrol station in the province's Tan Lap Commune, Tan Thanh District, capped sales at VND30,000 ($1.44) worth for each motorbike while the TB station in Hung Dien B Commune, Tan Hung District, sold petrol at VND22,000 ($1.06) per liter, VND700 higher than the official rate.

Many petrol stations in Chau Thanh and Cai Lay districts of Tien Giang Province, including Thieu Minh station in Nhi My Commune, capped sales at VND20,000-30,000, or closed doors for several hours.

In An Giang Province, many stations along National Highway No 91, which experienced a lot of traffic during the four-day holiday, closed doors or limited sales at VND20,000 per motorbike and VND50,000 ($2.4) per car.

In Binh Phuoc Province, many stations did not open, forcing residents to buy petrol in the black market at higher prices.

Nguyen The Toan of Loc Ninh District said the Hoang Trong and Hoang Son stations on National Highway No.13 closed their doors for no reason.

Similarly, many petrol stations in Tan Phu District, Dong Nai Province, closed their doors and hung signboards saying "power outage" while the whole area still had electricity supply.

The situation was more serious in border and remote areas where people could not buy petrol to run motorboats, water pumps and agricultural machinery.

Key petrol suppliers including Petrolimex, Sai Gon Petro and PV Oil said had fulfilled all orders from outlets in the Cuu Long (Mekong) Delta.

However, "we cannot control the business of agents," one official said.



Vietnam to review power prices on June 1: deputy minister

Reuters




The Vietnamese government will review electricity prices at the start of June and may make another adjustment following a double-digit increase in March, a senior official said on Tuesday.

"The government will review power prices on June 1st as part of the policy to review power prices every three months. If the inputs prices increase 5 percent, it's allowed to increase the power price," Pham Hung, deputy minister of Trade and Industry, told reporters.

Vietnam raised average prices of electricity by more than 15 percent at the beginning of March in a step that industry officials said was necessary to help trim losses at state power supplier Vietnam Electricity (EVN), which is forced to sell at artificially low prices.

Demand for electricity has exploded alongside Vietnam's fast-paced economic climb, outstripping supply and leading to frequent blackouts. Hung said the country would have to add an average of 4,600 megawatts of power a year between 2011 and 2015, and 5,400 megawatts between 2016 and 2020.

The power shortfall underscores Vietnam's development challenges, as economists say the March power price hike increase exacerbated already soaring inflation.

Annual inflation hit a 28-month high in April of 17.51 percent.

The government has tried to attract private investment in power generation, but industry officials say low electricity prices and insufficient government guarantees were hampering efforts.

Last month prime minister Nguyen Tan Dung approved a plan that would allow EVN to adjust power prices once a quarter, instead of once a year as has been the practice.

EVN would be able to adjust electricity prices if input costs or foreign exchange rates change, and if there are changes in the country's electricity output, according to the plan.

To raise prices by up to 5 percent it would need permission from the Ministry of Industry and Trade. If EVN wants to increase prices by more than 5 percent it is also required to submit its plan to the finance ministry for approval.



Cooking gas prices up $1.5 per cylinder since May 1

Tuoi Tre




Gas suppliers like Saigon Petro, Hong Ha Gas, Thai Duong confirm a rise in retail prices of cooking gas by 28,000 dong to 30,000 dong per cylinder since May 1.

The retail price for a 12-kilogram cooking gas cylinder now ranges from 378,000 dong to 390,000 dong, depending on suppliers.

Due to a hike by $87.5 a tonne to $970 in world cooking gas prices, the domestic suppliers have to increase their retail price accordingly.

This is the fifth hike this year, and also the highest. Prices only went down once in February by 22,000 dong to 25,000 dong per cylinder.



Gas climbs to highest price this year

VOV

The retail price of gas surged by VND30,000 (US$1.44) per 12kg canister of household gas from May 1 – the highest price increase this year, according to the Vietnam Gas Association.

A 12kg canister from Sai Gon Petro, Petrolimex, Gas Sai Gon, MT Gas, Hong Ha Gas and Thai Duong Gas were being sold from VND378,000 to VND390,000 (US$18.09-18.66).

Deputy head of business department of Sai Gon Petro Do Trung Thanh explained the price hike was mainly attributable to increased global gas prices.

Thanh said the May delivery gas price on the world market increased to US$970 per tonne, up by US$87.5 per tonne compared to the previous month, forcing domestic firms to dramatically adjust prices.

Industry insiders said in addition to rising world gas prices, costs of other inputs including transportation and oil prices also pushed up domestic retail prices. Transportation costs doubled from US$80 to US$160 per tonne, while world oil prices continued rising as global political instability and natural disasters had led to unstable supply of fuel, including gas.

This increase spells the fifth occasion this year that domestic retail gas prices have increased. Gas prices only reduced once in early February by VND22,000 -25,000 (US$1.05-1.20) per 12kg canister, but this 10-day downward adjustment ended after the State Bank of Vietnam devalued the dong against the US dollar.



Infrastructure – Vietnam should strengthen role of private area in urbanization process: Expert

Vietbiz24



Urbanization is an opportunity for groups and private enterprises to join capital contribution for the infrastructure development and investment, Yoshihiko Noda, Japanese Minister of Finance, said at the Governors’ seminar themed Asia 2050: Pursuit of Growth, Sustainability and Well Being” within the framework of the 44th annual meeting of the Board of Governors of the Asian Development Bank (ADB) in Hanoi from May 3 to 6, 2011.



Yoshihiko said 2010 was a historic year of the global urbanization process. As forecasted to 2020, the proportion of people living in urban areas would account for 60-70 percent. Thus, it is necessary to strengthen further infrastructure development to cope with traffic congestion in big cities and deal with carbon emissions.

Yoshihiko Noda also said that Japan is always willing to offer technical assistances on urban railway problems for partners in the region.

Bangladesh's minister said the population density in urban areas will force the government to stop the population moving. This requires the development of information and technologies, the suitable use of land, and at the same time expands and provides better services to rural areas.

Bangladesh as well as India, Vietnam and other developing countries needs a huge capital source to build urban infrastructure. India needs a capital source of up to $3,000 billion, but this country itself can only meet half of the requirement and the remaining is waiting for the support from foreign countries.

In Vietnam, the biggest problem in the urbanization process is social security. According to the State Bank of Vietnam (SBV)'s governor, Nguyen Van Giau, rapid urbanization means the land of farmers is more and more being dwindled but the compensation mechanism is not fully satisfactory to help people find new income sources.



New urban area to take shape

The Saigon Times Daily





The shape of the Thu Thiem new urban town on the bank of the Saigon River is now clearer with revisions. However, it will take a long time to materialize the planning.



On April 5, the project to revise the 1/2000 scale planning of the new urban town of Thu Thiem was introduced to related HCM City authorities and experts in the field. The new project has adopted changes and included more details than the 2005 version.

A facelift to Thu Thiem

Considerable changes have been suggested by the U.S.-based consultant company Sasaki Associates to the master plan of Thu Thiem New Urban Area, including the Core Area, the Crescent Boulevard and the East-West Boulevard. Blocks of buildings on both sides of the central square are expanded. So are the Crescent Boulevard and the North-South route. More functions have been added to the Observation Tower, and, subsequently, its height is increased to 86 floors. The consulting firm argued that wider blocks will maximize areas for development, cut infrastructure costs and allow car parks in the basement to be bigger. “Those changes are definitely more enticing to investors,” claimed a Sasaki representative.

In fact, aiming at attracting investment, Sasaki has suggested the increase of commercial area from 46.6 hectares to 50.7 hectares, and versatile commercial area from 22 hectares to 27.4 hectares. At the same time, the area of administrative offices will be cut from 17.2 hectares to 2.7 hectares. Moreover, the total construction floor area will be increased by 40 percent over the 2005 plan, from 5.4 million square meters to 7.57 million square meters. As a result, the ratio of land use in some sections soars, up to 7.17-8.38 times; for instance, the software park and the intellectual park (762,500 square meters), the Observation Tower (540,000 square meters), and the Core Area (1,25 million square meters).

As the ratio increases, the height of buildings will be higher correspondingly. Consequently, Sasaki has maintained that all the buildings in the Core Area should not be always 40 floors as stipulated in the 2005 version. Instead, some buildings should be up to 86 floors and some down to only four. However, the height of those buildings must comply with a rule that blocks are lower toward the bank of the river and the Central Lake. To ensure the requirements of technical infrastructure and commercial purposes, high-rises in the Core Area must have multi-story basements to give way to shopping arcades, car parks and subway stops.

Needless to say, subway and buses are only part of the public transport picture of Thu Thiem whose system also embraces ferries and water taxis in addition to connecting streets. All will create diversity in transport.

Another proposed change relates to creating landscape for the Central Lake and the children’s culture house near the lakeside. This landscape will comply harmoniously with the connection with the surrounding areas and the Core Area. Such connection is to provide appropriate activities meeting different cultural and recreational forms of the residents. It will also lead to hospitable terrain to facilitate sightseeing and meeting needs, as well as to create sport facilities, walkways and friendly atmosphere.

More changes needed

At the presentation, Sasaki’s revisions of the 1/2000 scale planning of the Thu Thiem New Urban Area were fairly appreciated by related authorities and experts in the field. As Le Van Nam, former HCM City’s chief architect, put it, the revisions are full of good points. However, there remains a host of issues which need better clarification so that when the project is endorsed and implemented, no further revisions will be required, according to Nguyen Van Hiep, vice director of the HCM City Department of Construction.

Nguyen Dang Son from the Institute for Urban Studies and Infrastructure Development posed a question as to why subway and bus stops are located too far from one another. Meanwhile, Nguyen Thi Hau from the HCM City Institute for Development Studies commented that the area for the museum is too small, being only 10,000 square meters. That the museum is built too far away from the Core Area and the central square is also unconvincing.

Hoang Ngoc Tuan from the Urban Railway Authority said the subway route which crosses the Saigon River diagonally with four opposite curves on a short distance before joining the terminal is technically infeasible.

A representative from the municipal Department of Planning and Architecture argued that the positions of subway stops and the museum should be more appropriate. He also warned that basements with so many floors may be beyond investors’ capabilities. Otherwise, revisions will be made in accordance with their intentions when the project is implemented.

The different heights of the Crescent Boulevard—six meters at some points and eight at some others—will possibly create steep slope, and therefore should be reconsidered, said an official from the Department of Transport. His counterpart from the Department of Natural Resources and Environment called for a revaluation of the environmental effect of the project as the volume of clearance and filling is enormous.

On their part, authorities of District 2 where the Thu Thiem New Urban Area is located, asked for an explanation of why the area of public land has been reduced while the population is set to increase from 120,000 people in 2005 to 160,000 in the new plan.

Nguyen Van Hiep from the Department of Construction said he did not know why there is only a single bridge in the area of the tourism island. An emergency exit should be taken into account, he said. “What is bad should be amended although it has been endorsed already,” Hiep emphasized.

Architect Luu Trong Hai said he is concerned with the land fund for public facilities such as churches, pagodas and markets because they have yet to emerge in the planning. “They are necessary to the inhabitants,” he argued.

To make the project more feasible, Sasaki has revised it so that it becomes more enticing to investors. However, the biggest stumbling block, according to Hai, is that with the huge construction floor area and high land prices, the Thu Thiem new urban project may requires tens of billions of U.S. dollars to be realized.

Sasaki representatives promised to consider all the issues tabled by the speakers. However, no specific date has been set. It seems that it will take yet a long time for the Thu Thiem New Urban Area to materialize.



Private investment expected in infrastructure

VietnamPlus



The Government has reiterated its policy of attaching importance to private investment in infrastructure development.



Deputy Minister of Planning and Investment (MPI) Dang Huy Dong told a meeting on public-private partnerships (PPP) in Hanoi on May 4 that the Government expected the policy would attract not only investment, but also advanced technology and managerial experience for the development of infrastructure and public services.

MPI reported that Vietnam needed some 160 billion USD up to 2020, to invest in roads, bridges, sewerage and waste treatment facilities.

State budgets, Government bonds and official development assistance (ODA) will meet just half of the demand, leaving the rest to enterprises both at home and abroad.

The PPP policy making has been based on international rules which clarify requirements in economic efficiency, transparency and equal competition between domestic and foreign investors. The PPP legal framework calls on public and private investors to share responsibility, conduct an appropriate risk management while working for rational interests between the State, private sector and service users.

The PPP scheme is expected to create a truly commercial PPP market in Vietnam, prioritising projects on socio-economic development, ranging from bridges to subways, sea, river and airports, power and water supply and sewerage.

The Director of the Private Sector Operations Department under the Asian Development Bank (ADB), Philip C. Erquiga, backed the Vietnamese Government’s policy, describing the PPP model as an important tool to encourage the private sector to join in infrastructure investment in the Asian-Pacific region and Vietnam in particular.

He called on Vietnam to have a clear vision on the relevant policy and be better prepared for PPP projects by conducting feasibility studies and considering social aspects.

State financial assistance and subsidies as well as Government guarantees would play an important role in convincing the private sector to invest in PPP projects, said the senior expert from the ADB, which is holding its annual meeting in Vietnam.

He emphasised ADB’s willingness to help Vietnam in policymaking and fundraising in regard to PPP projects.

In fact, ADB signed a memorandum of understanding on multiple loans with the MPI in support of Vietnam’s pilot PPP projects.

The Director of the International Financial Corporation (IFC)-Cambodia, Thailand and Vietnam Region, Simon Andrews, called on Vietnam to focus on coordination of action among relevant ministries and agencies in handling PPP projects, so as to place projects in a suitable order of priorities.

The PPP meeting took place on the sidelines of the ADB annual meeting, which entered the second day in Hanoi on May 4.



Sustainability priority in development

VNS



HA NOI — Economic development should not be achieved at any cost, but associated with environmental sustainability, said State Bank of Viet Nam Governor Nguyen Van Giau yesterday in Ha Noi.

Speaking at the opening session of Governors' seminar Asia 2050: Pursuit of Growth, Sustainability and Well Being, Giau said Asia was an important food provider to the world and that all five countries most heavily affected by climate changes were in Asia, namely China, India, Bangladesh, Japan and Viet Nam.

Therefore climate change could threaten global food security and cause man-made disasters and associated instability.

The State Bank governor also noted that Viet Nam was one of the two developing countries most heavily affected by the global climate change and rising sea level.

Environmental studies have shown that if the sea level increases by 1 meter, 10 per cent of Viet Nam's population will be directly affected and the country will see a 10 per cent chunk of its GDP swallowed up.

Giau said: "I fully support the study's recommendation that we should act immediately to avoid having to pay much higher costs in the future for sustainable environmental development. At the regional co-operation level, I am calling for greater co-ordination, [and] working together in dealing with this challenge."

"The ADB should play a more important role in taking the initiative to mitigate and to address negative impacts of global climate change, preventing economic and human disasters in the future.

"Domestically, the Government and the public need to join hands to pursue green economic development which is environmentally friendly and sustainable. In particular, a great deal of importance should be given to improving public awareness on environmental protection and prevention of implications caused by climate changes," said Giau.

During yesterday's workshop, delegates highlighted important issues including the demographic shift to the cities and the prevention of corruption.

According to Motoyuki Odachi, Japan's Deputy Finance Minister, both developing and developed countries were faced with urbanisation which was overloading transportation and medical services among many other problems.

According to an Indian representative, the country would need US$3,000 billion to build infrastructure for their cities in the next 40 years.

The Indian government, however, could only hope to raise half of this sum with the remainder needing to be mobilised from external sources.

Therefore, the only way to reduce pressure on urban areas was to slow urbanisation by addressing problems in rural areas. This included creating jobs for local people and improving skills for rural workers by providing vocational training and investing in education.

Improved health care for rural areas was also critical, the Indian representative said.

Giau also said to tackle migration to big cities, job creation in rural areas was needed. Creating a stable income for these workers meant they would not move to the cities.

ASEAN+3

The finance ministers of the 10 ASEAN member countries and three dialogue partners – China, Japan and the Republic of Korea – met in Ha Noi yesterday to discuss boosting regional financial co-operation and spotlight challenges facing the region.

During the one-day meeting, which was occasioned by the ongoing 44th annual Asian Development Bank meeting in Ha Noi, the ministers exchanged views on recent global and regional economic development and policy management, and reviewed progress of regional financial co-operation since their last meeting.

They received updates on projects including the Chiang Mai Initiative Multilateralisation (CMIM), the Asian Bond Markets Initiative (ABMI) and the ASEAN+3 Research Group.

"We endorsed the ‘Operational Guidelines for Enhancing Effectiveness of CMIM', which is the operational manual for the currency swaps made pursuant to the CMIM Agreement, including the CMIM's activation process in relations to the existence of the IMF programmes," said the officials in a joint ministerial statement issued at the end of the meeting.

In the statement, the finance ministers also said they believed these guidelines would contribute to swift and smooth activation of the CMIM agreement.

The ministers also welcomed the establishment of AMRO which, as the surveillance unit of CMIM, plays an important role in monitoring and analysing regional economies, as well as contributing to the early detection of risks and swift implementation of remedial action, and the effective decision-making of CMIM, the statement said.

"We expect AMRO to be fully operational soon and are committed to its smooth and efficient operation," the statement read.

The ministers also welcomed the establishment of the Credit Guarantee and Investment Facility (CGIF) last November with an initial capital of US$700 million.

In addition, there was enthusiasm for the progress of ASEAN+3 Bond Market Forum (ABMF), a common platform to foster standardisation of market practices and harmonisation of regulations relating to cross-border bond transactions in the region.

The ministers acknowledged in the statement that the Research Group had played an important role in identifying and exploring subjects for possible regional financial co-operation from mid- and long-term points of view by mobilising the knowledge and expertise of private research institutions.

"We recognised that ASEAN+3 financial co-operation has presented significant achievements under such initiatives as CMIM, ABMI, ERPD and Research Group," read the ministers' statement.

The ministers said they had tasked deputies to initiate studies, with support from the ADB as appropriate, in three possible areas for future co-operation. These included infrastructure financing, disaster risk insurance and using local currencies for regional trade settlement.

The participants at the meeting agreed to invite central bank governors to join the meeting, a move which transform the gathering into the "ASEAN+3 Financial Ministers' and Central Bank Governors' Meeting" from next year.

The next meeting will take place in the Philippines in 2012 with Cambodia and the Republic of Korea acting as co-chairs.





Coast group to build Vietnam theme park

Gold Coast Bulletin News




A gold Coast company has scored a major international coup by securing the rights to design and build a $140 million Movie World look-alike that will be part of a $2 billion themed resort in Vietnam.

Sanderson Group, which cut its teeth developing Movie World on the Coast, has fleshed out plans for the Happyland theme park just outside of HCM City.

The project, which has lured Michael Jackson's father Joe as an investor, will house Vietnam's first film and television studios and will be home to reality-show franchises such as Idol and Next Top Model.

Happyland, being developed by wealthy Vietnamese businesswoman Madame Thao, will comprize a five-star hotel, shopping centres, exhibition centres and a 180-degree dome theatre to be built alongside two theme parks.

Joe Jackson is investing in the hotel component of the attraction.

The Sanderson Group, headed by Steve Sanderson, has just completed a suite of projects in Asia over the past five years including Disney Seas in Tokyo and the Universal Studios in Singapore.

It is preparing to kick off construction of the Movie World attraction at Happyland in November ahead of a 2014 opening.

Sanderson Group, whose most recent Gold Coast work was the new fitout at Ripley's Believe It or Not in Surfers Paradise, is one of the few companies in the world that can design and construct theme park projects.

Sanderson employs about 400 staff, mostly in South East Asia, although it has taken with it about 30 senior managers from the Gold Coast region to its new base in Kuala Lumpur.

The company, which retains a presence at Burleigh Heads, has about $250 million of work in hand across Asia, but it is also looking to pick up more projects in Australia.

"As we come out of the depressed market over the next 10 years we would like to re-establish ourselves here,'' Sanderson's project director Darren McLean said.

On Sanderson's list is Village Roadshow's proposed $80 million Wet `n' Wild park in Sydney.

The Happyland venture, backed by Madame Thao's Khang Thong Group, is tapping into a growing appetite for leisure activities among Asia's emerging middle class.-by Nick Nichols



Electricity price should have been raised by 50pct instead of current 15pct

Dau Tu Chung Khoan




In the periodical meeting held by the government's office in April, the minister of finance stated that it was hard to manage the prices in the current economic situation. The fluctuation of the world prices has put much pressure in the price management methods for basic commodities.

However, the authorities will adjust the prices of these commodities following the roadmaps. For example, the electricity price should have been raised by 50 percent but has currently been adjusted to surge by 15.28 percent only. The prices for other commodities such as petroleum, coal will be adjusted on the similar principle.

The statistics released by the ministry of planning and investment showed that the consumer price index (CPI) in April increased by 3.32 percent month on month. In comparison with that of December 2010, the April CPI rose by 9.64 percent, while the average CPI in the first four months of this year surged by 13.95 percent against the same period last year.

Recently, the prime minister asked the ministries and relating departments to limit the inflation rate at 12-13 percent this year.



Vietnam will need 50000 megawatts more power through 2020

Bloomberg




Vietnam will need to build power plants with a total capacity of more than 50,000 megawatts through 2020, said Pham Hung, deputy director of the energy department of the Ministry of Industry and Trade.

Vietnam will put forward policies to encourage investors to help build more power plants, Hung said today in prepared remarks at a meeting of the Asian Development Bank in Hanoi.

"The government has decided to move toward the trend of gradually allowing power prices to follow the market," Hung said when asked whether prices may rise. "Starting June 1, we will introduce a procedure that every three months, Vietnam Electricity will consider adjusting" the price.

Vietnam's government said in April that it would allow power prices to be adjusted as often as once every three months, depending on market conditions.

The policy is based on a government decision dated April 15 and signed by prime minister Nguyen Tan Dung, according to a posting on the government's website. Changes in fuel costs or exchange rates are among the reasons for adjusting power prices.

The government increased electricity prices by about 15 percent on March 1, contributing to a 13.89 percent year-on-year inflation rate in March. Inflation accelerated in April to 17.51 percent, the fastest pace since 2008.



World Bank lends $330m for Vietnam hydropower plant




Thanh Nien














The World Bank has approved a new loan of $330 million for Vietnam to support a multipurpose hydropower project in the north-central province of Thanh Hoa.

The 260-megawatt Trung Son Hydropower Project will help meet growing local demand for power and bring flood control and irrigation benefits to rural and poor communities in Thanh Hoa, the bank said in a press release.

Through the project, the World Bank will also provide technical support to Electricity of Vietnam (EVN) in improving the performance of its hydropower projects in dam safety and operations as well as in adopting international standards in social and environmental practices, according to the release.

"Trung Son will contribute to Vietnam's energy mix and energy security as part of a low cost solution in meeting the country's energy needs. Furthermore, it will also contribute to the climate change agenda by avoiding an estimated 1 million tonnes of CO2 emissions per year," said Victoria Kwakwa, World Bank Country director for Vietnam.

The Trung Son Hydropower Project includes a robust development programme to address the social impact from Trung Son's construction and provide support to people living in the project area.

This includes the construction of infrastructure like roads, power stations, water plants for families, irrigation systems, schools and houses in the resettlement areas.

In addition, an environmental management plan has been put in place to address the preservation and mitigation measures of three natural reserves of high biodiversity surrounding the project site.

"Trung Son will be developed with the highest social and environmental standards to ensure the benefits flow to the people. Development of hydropower could have an important impact on Vietnam's future emissions path, since the construction of Trung Son means it will avoid building new coal fired plants," said Richard Spencer, Project Team Leader.

Work on Trung Son started in January this year. The project is slated to finish by May, 2017.

Trung Son is the first hydropower project the World Bank has financed in the country. The financing is being provided through the WB's International Bank for Reconstruction and Development lending window-with 27 years maturity and 6 years of grace period for loan repayment.



Hue airport runway maintenance delayed by a week




Tuoi Tre

















Vietnam Airlines has said flights to Hue will continue for a week longer than it announced earlier since maintenance of runways at Phu Bai airport has been delayed until May 13.

It had said earlier that flights to the central city from HCM City and Hanoi will cease from May 5 to June 5 for the maintenance.

However, the Ministry of Transport of Vietnam, which will carry out the maintenance, has put off the work to May 13-June 13.

During the maintenance period, visitors to Hue have to fly to Danang and then take a bus or taxi.

Vietnam Airlines also said it plans to begin flights from Da Lat and Nha Trang to Hue after the airport reopens.



PPC finalises electricity price negotiation with EVN

Dau Tu Chung Khoan




The leaders of Pha Lai Thermo Power Joint Stock Co (coded PPC) announced lately that the company has already finished negotiating the electricity price for the period of 2010-2013 with the final price of 698 dong per KWh. Meanwhile, the other power producers such as Vinh Son Song Hinh Hydropower Joint Stock Co (VSH), Thac Ba Hydropower Joint Stock Co (TBC) haven't completed negotiation process yet.

In the resolution that was approved in the latest annual general meeting (AGM), PPC aimed to reach targeted business plan, including total commercial electricity output of 5.395 billion KWh, total revenue of 4.08 trillion dong, pre-tax profit of 254 billion dong.

In Q1 of 2011, thermo power plant reported gaining total pre-tax profit of 171 billion dong. However, up to the end of March, the company's debt in Japanese yen was posted at 31.56 billion yen.



Government okays construction of Long Thanh airport

Thanh Nien





Prime minister Nguyen Tan Dung last week approved a plan to construct a mega airport near HCM City.



The first phase of construction at Long Thanh International Airport in southern Dong Nai Province, some 40 kilometers northeast of HCM City, will begin in 2015 and is expected to finish by 2020.



According to the plan submitted by the transport ministry, three runways and two terminals in the 5,000-hectare airport will be able to handle 50 million passengers a year by 2030.



The cargo terminal will have a capacity to handle 1.5 million tonnes annually.



The airport, estimated to cost $10 billion, will be financed by government budgets, and private and foreign funds.



The Long Thanh Airport is expected to ease the burden on HCM City's Tan Son Nhat International Airport, currently the country's largest, which has a footfall of 12 million passengers and handles 278,000 tonnes of cargo a year.



On completion, the airport will serve 90 percent of international and 20 percent of domestic flights.



Phong Phu and Song Da groups apply for upgrading National Highway No 6




Dau Tu

















Truong Tan Vien, deputy minister of transport has recently asked Hanoi City People's Council to make reports about the implementation process of the expanding and upgrading the National Highway No 6, from Ba La to Xuan Mai, Hanoi under BT and BOT method. Song Da Group had been assigned for setting up the investment proposal.

Previously, Ministry of Transport has received the proposal submitted by Phong Phu Investment and Development Joint Stock Co (under Phong Phu Corp) applying for making investment in this project under BT and BOT method.

The National Highway No 6, from Ba La to Xuan Mai, has total length of 25 kilometres, connecting Hanoi with northwest provinces. It was estimated that the total investment cost for this project may reach 1.764 trillion dong.



Vietnam's $10b Long Thanh international airport gets approval




worldinteriordesignnetwork.com















The Ministry of Vietnam has given the green light to a plan for a $10 billion project to build Long Thanh International Airport in HCM City.

Located in the southern Dong Nai Province of Ho Chi Minh, the 5,000-hectare airport will comprize three runaways and parking place worth $1.27 billion and two terminals costing $1.4 billion as per the plan.

It is also expected to have an annual accommodation capacity of 50 million passengers by 2030 in addition to the cargo terminal, which is expected to handle 1.5 million tonnes per year.

The airport will serve 90 percent of international as well as 20 percent of domestic flights, diverting a major chunk of passenger traffic from the city's Tan Son Nhat International Airport that is considered to be the country's largest airport.

Funding will be provided by government, private as well as foreign enterprises. Phase one of the project is scheduled to commence by 2015 and complete by 2020.



Governance - Vietnam arrests award-winning publisher

Radio Free Asia




Vietnamese authorities have arrested a local underground publisher on his return home after receiving an international award for courageously upholding freedom to publish, an industry group said Monday.

The Geneva-based International Publishers Association (IPA) said Bui Chat, who was awarded the Freedom to Publish Prize in Buenos Aires last week, was held at the weekend. The award and prize certificate have been confiscated.

"We were really hoping that nothing would happen. I mean we have given Freedom To Publish Prize for many years and this is the first time the government arrests the prize winner upon his return to his country," Alexis Krikorian, director of IPA's Freedom to Publish panel, said in an interview.

Bui Chat (right) with his award, April 25, 2011. (Photo: Da Mau magazine)

Bui Chat is the founder of Giay Vun Publishing House, which is devoted to printing and publishing of the works of Vietnam's "pavement poets" beyond the reach of censorship authorities.

Under Bui Chat's leadership, Giay Vun has directly assisted in the establishment in Vietnam of other publishing houses that operate independently and freely, publishing the works of banned authors and historians, IPA said in a statement.

Detention order

According to reports received by the IPA, Bui Chat was issued a preliminary detention order after Vietnamese authorities searched his home.

He may face up to nine months imprisonment for "purpose of investigation" before an official charge was framed, the association said.

Poet Ly Doi, the co-founder of Giay Vun, was also ordered to report for interrogation, IPA said.

Both men have also been evicted from their rented apartment. The landlord is reported to have said that he was under pressure and ordered by the local security police to evict them.

"We are talking about a young man who is now put behind bars, who is apparently evicted from his rented apartment," Krikorian said. "The landlord is reported to have said he is under the pressure by the local authorities."

Immediate release

The IPA has called on governments and human rights advocates to join publishers in pushing for Bui Chat's immediate release, saying the arrest appeared to be "directly linked" to his winning of the IPA Freedom to Publish Prize.

Human rights groups have constantly criticised Vietnam for lack of freedom of expression. All traditional media in the country are controlled by the state.

In accepting the award on April 25, Bui Chat said: "Books have the power to make the world free; freedom for those who publish books, for those who read books, and for those who discuss what books bring to them.

"We hope this award will be a significant boost to the development of the independent publishing movement and civil society in Vietnam."



Vietnam Ministry: German chancellor to visit Vietnam in October




Dow Jones















German Chancellor Angela Merkel will visit Vietnam in October to strengthen bilateral ties, Vietnam's Ministry of Foreign Affairs said Friday.

Speaking with Vietnamese prime minister Nguyen Tan Dung by telephone Thursday, Merkel said Germany supports the European Union ratifying a Partnership and Cooperation Agreement with Vietnam soon, as well as the start of talks on a Vietnam-E.U. free trade agreement, the ministry said in a statement.

Germany is Vietnam's largest trading partner in the E.U., with bilateral trade growing 15 percent a year recently to reach $4.1 billion in 2010, it added.



Vietnam's economic growth should not rely only on foreign capital




VEF















Currently, in order to create a percentage of the economic growth, Vietnam must invest strongly, while production capacity is nearly stalled, according to economists at the 44th annual meeting of the Asian Development Bank (ADB).

Opening formal discussions at the Summit on business in Vietnam in the framework of the annual meeting of the Asian Development Bank on May 3 morning, Vietnamese deputy prime minister Hoang Trung Hai said it was forecast that in the period of 2011-2015, Vietnam would need about $300 billion for investment and development.

"Therefore, improving the investment and business environment, transforming the model of economic growth, creating and developing the markets, freeing and maximising all the local and foreign resources remains a top priority for Vietnam," Hai stressed.

Prof Kenichi Ohno, an economist who has over 10 years of experience in researching Vietnam's economy confirmed that after the renewal (Doi Moi) policy, Vietnam has achieved a lot of progress in liberalisation, integration and economic development, but the growth has just mainly been based on the opening of trade and foreign currencies rather than innovation.

"But growth cannot rely forever on FDI, ODA, natural resources, major projects, investment in securities and real estate... Resources for growth must be value generated by residents and local businesses," Ohno said.

Ohno said that Vietnam is receiving more FDI; therefore, the country should boost localisation of production and development of supporting industries. Next is the localisation of working capacity [skills] and improvement of management capacity.

This is a big challenge for Vietnam's economy, especially when Vietnam is in danger of being stuck in the middle-income trap.

Vietnam should have industrial policy initiative with a strong commitment to global integration and growth, in which the private sector plays a key role. There is a need to collect and share complete information about industries between the government and businesses and boost the effectiveness in public-private partnership. At the same time, acquiring knowledge, skills and technology must be regarded as national objectives.

Policy making in Vietnam still lacks coordination between ministries and the participation of stakeholders, and lack of coherent policy structures.

"The country should better only choose a few strategic choices to positively work," said Ohno. "Each strategy must be assigned to a department to take responsibility to make planning, budgeting, staffing, supervision and international cooperation and coordination is needed at higher levels than ministry-level to avoid duplication.

Hai said that Vietnam will focus on investment in both static and dynamic fields, which are those areas where the country has traditional advantages and work out new areas.

"We must carry out many socio-economic programmes, then we can discover the dynamic competitiveness," Hai said.

Two upcoming investment focuses will be the areas of training and infrastructure because these are the bottlenecks of the national economy. If not solving the problem of labour quality, the country will not develop properly.

Hai said that in recent years, supporting industries in Vietnam have also achieved remarkable accomplishments. For example, Vietnam has met the 100 percent demand for cement, 40 percent nitrogen fertiliser demand, it look forward to meeting 100 percent of this demand in near future and for export sectors, the country has met 40 percent localisation of garment and textile.

According to Hai, the government has issued policies for the development of supporting industries to shift to industries with higher value, but according to the Vietnamese deputy prime minister, this is the process to go faster, but not be impatient. "If you have yet not kept up high-technology industries, you cannot miss the basic industries.

Vietnam spends $34m on legislative elections

Thanh Nien




Vietnam has spent 700 billion dong (US$34 million) on preparations for the elections of the central and local legislative bodies scheduled for May 22, the Ministry of Finance told a press conference Wednesday.

Vietnam has spent 700 billion dong (US$34 million) on preparations for the elections of the central and local legislative bodies scheduled for May 22, the Ministry of Finance told a press conference Wednesday.

The expenditure will probably increase as the election nears.

According to the VnExpress, a financial ministry representative said last Friday that the ministry together with the Ministry of Home Affairs, and the National Assembly's office submitted a proposal for more financial supports.

The proposal now is still waiting for approval.

While both the elections of the National Assembly and the People's Council happen once every five years, they are usually two years apart.

However, this time they are organised at the same time so the amount of work has become bigger, according to Nguyen Huu Duc from the Ministry of Home Affairs.

People will vote for 500 members of the National Assembly, 3,200 members of People's Council at cities and provinces, and over 300,000 members of People's Council at districts and communes, VnExpress reported.



Vietnam to cut 10pct total investment capital in 2011: MoIT




StoxPlus.com















Vietnam planned to cut roughly VND97 trillion social investments and development capital or 10 percent total estimated investment capital in 2011

Vietnam planned to cut roughly VND97 trillion social investments and development capital or 10 percent total estimated investment capital in 2011, the local newspaper Vietnam Investment Review reported on April 28, citing the Ministry of Planning and Investment (MoIT).

In details, the country set to cut VND50 trillion by reducing 32 percent capital from government bonds, 10 percent credit of the state. The capital cut followed the government Resolution 11 is VND nearly VND47 trillion this year.

The Vietnamese government ordered to reduce current expenditures by 10 percent of the year's estimate and raise collecting revenue by between 7 percent-8 percent of the year's estimate in the efforts of taming inflation.

Vietnam's state budget deficit is estimated to amount to VND11.465 trillion in the first quarter of this year, equal to 2,6 percent of the country's gross domestic product(GDP). The figure was classified by Vietnam, the Ministry of Finance (MoF) said.

The Southeast Asian country spent VND36.15 trillion for investments for development projects, equal; VND118.77.5 trillion for current expenditure, and around VND12.075 trillion for foreign loans payments in the period.

Last year, Vietnam state budget deficit fell to 5.8 percent of the value of the country's gross domestic production in 2010 from the earlier target of 6.2 percent, the Ministry of the Planning and Investment reported at the government on October 2.



Cut public spending at all costs, says academic




Tuoi Tre















State firms should not be allowed to hijack the anti-inflation agenda in their pursuit of profits, he warns in an interview to Tuoi Tre.

What do you think about the effect of Resolution 11?

The government's Resolution 11 issued early this year to cut public spending will only produce results in the next six to nine months. So investment still surged 19.6 percent in the first quarter.

Moreover, the resolution itself has some flaws in it that can be taken advantage of. State agencies and companies can change invoices for their luxury goods to predate them.

But people say since the benefits of state-owned companies are involved, public spending may not be cut much.

The resolution cannot produce results right away.

The government should taken into consideration state-owned firms' benefits and provide clear and transparent guidelines and regulations since every group wants to benefit by boosting public spending. Otherwise the cuts may be foisted on those firms with less power whose projects may actually be more profitable.

Investment by the state sector grew 15.2 percent in Q1, while FDI growth was only 3.8 percent. What do you think about the two figures?

The latter is an economic indicator, showing that during times of economic woes, the private and foreign-invested sectors will cut investments.

The former, on the other hand, has accounted for 45 percent of total investment for many years for GDP growth and without consideration of profitability.

The lesson to be learned here is that the government should support the private sector so that investments from the state budget can be cut further.

Key national projects are often inaccessible to the private sector and are given to inefficient subsidiaries of state-owned groups.

So to reduce public spending, the country should sacrifice GDP growth for a while to filter out such inefficient firms.

In 2008 the same ambitious target to cut public spending seemed unworkable. How about this year?

The government should take drastic measures against those who want to grow at all costs and penalise them.

The inflation rate this year is reaching the 2008 rate, but Vietnam does not have as much room for maneuvering the economy as it did in 2008.

In 2008 the budget deficit, credit tightening, and businesses' health were not as bad as they are now. Moreover, the people were more optimistic about future prospects and globally there was deflation then.

So containing inflation this year will be more challenging and the government should address the core problems of our economy: scaling down the state sector to boost efficiency and redirect public spending to healthcare, education, and infrastructures in remote areas.

The private sector should be given more room to grow and sharpen its competitive edge.

Administrative measures as we are taking now will only curb inflation in the short term which will then rise more regularly, challenging the economy over and over again.



Sri Lanka, Vietnam economic links to widen with re-opened embassy: Envoy




lankabusinessonline.com















Sri Lanka could attract investments from Vietnam if the path is clear and the two nations could increase two-way trade and tourism rapidly, Ton Sinh Thanh, Hanoi's envoy heading a newly re-opened embassy in Colombo, said.

"We are ready to serve you, the business people to promote the traditional friendship and cooperation between Vietnam and Sri Lanka," ambassador Thanh said.

"We should join hands with each other boost our ties for the prosperity of both countries."

Investment

Several Vietnam firms were keen to invest in Sri Lanka including PetroVietnam. Vietnam's mining groups have been leading the country's outward investments.

"We have a lot of experience in oil and gas exploration now," Thanh said. "So now we can join with Sri Lanka to explore oil and gas."

According to data published in Vietnam Economic Times, the state petroleum firm has a pipeline of 25 projects in 17 countries with 900 million dollars already invested in 18 ventures.

Neighbouring Cambodia and Laos have been top recipients of Vietnam investments in natural resources, rubber, leisure, hydro power and other areas.

Thanh says the establishment of a branch of a Vietnam bank would boost business and there is interest from in the financial sector in Sri Lanka.

"We need support from the Sri Lankan people, the government, for licensing and clearing procedures," he said.

FDI

Vietnam itself is receiving tens of billions of dollars of investment from Japan, Korea, Western Europe and the United States.

Thanh says three 120,000 foreign invested projects in Vietnam after it liberalised foreign investments and later decentralised investment approval to regions.

"To develop fast we need as much investment from abroad as possible," Thanh said. He said his government was striving to combat some negative aspects of foreign investment and improve the quality of investments.

Vietnam was ready to share its experience and strategy with Sri Lanka if needed, he said.

In the first four months of 2010 foreign collaborated projects in Vietnam had invested 3.62 billion dollars, though new project approvals have fallen 47 percent to 4.0 billion dollars, a Vietnam news agency report said.

For the entirely of last year Sri Lanka received about 500 million dollars of foreign investment.

Vietnam's southern HCM City area alone had attracted a billion dollars to 58 new and seven expanded projects. The country is expecting about 20 billion dollars in new sign ups in 2011.

Sri Lankan firms had invested about 13 million dollars in Vietnam so far.

Trade Leap

Two-way trade between to two countries had risen to 93 million dollars last year, up more than 50 percent from 60 million a year earlier, Thanh said.

"This is a big leap forward," he said. "I hope with the opening of the embassy here, we can do some other measures and the trade volume can increase even further."

Sri Lankan businesses who are investing and trading with Vietnam have been eagerly awaiting the re-opening of the embassy as getting pre-approved visas or visa's from Delhi took several weeks and cost as much as 270 dollars.

Thanh says the embassy which is operating from a temporary office, will begin to issue visas from the middle of next month.

Vietnam is a efficient food producer and a net exporter of rice.

Travel Ties

The opening of the embassy could also boost two-way tourism making it easier for Sri Lankans to get visa and giving confidence to Vietnamese people to travel to the island.

Vietnam has a growing middle class that is travelling out, but there is a reluctance to visit a country in which there is no embassy.

"Vietnamese people also want to visit Sri Lanka, it is beautiful country," Thanh said.

"It is also a Bhuddist country and Vietnamese are becoming rich now and they want to go to new destinations."

In the first three months of 2011, Vietnam had received 1.2 million foreign visitors which 893,000 coming from holiday, 249,000 for business and the balance to visit relatives and other purposes data from Vietnam's tourist office said.

In the first quarter, 143,000 visitors came from South Korea, 136,000 from Japan, 133,000 from USA and 86,000 from Australia. China was the top source of visitors with 287,000.

Sri Lanka received a total of 215,000 foreign visitors in the first quarter of 2011.



Vatican envoy in 'historic' visit: Vietnamese church

AFP




The Vatican's first representative to Vietnam since 1975 has made a "historic" visit to the communist country, according to a local Catholic church statement.

The trip by Holy See envoy Leopoldo Girelli is part of efforts to improve long-strained ties between the two states, which have no diplomatic relations.

Girelli presented his letter of credentials issued by Pope Benedict XVI to Archbishop Nguyen Van Nhon, who heads the Catholic church in Vietnam, during a meeting of bishops in HCM City, the church's website said.

Last week in Hanoi the envoy met deputy Foreign minister Bui Thanh Son, who "acknowledged recent encouraging progress in relations with the Vatican," the official Vietnam News Agency (VNA) reported earlier.

On Monday in HCM City the head of the local government held a reception for Girelli, whose visit ends on Sunday, VNA said.

The envoy expressed happiness at his visit, "a historical moment as it was the first time since 1975 the Vietnamese church has an envoy of the pope", the church said in a statement dated Tuesday.

The pontiff in January appointed Girelli as non-resident envoy to Vietnam, which severed diplomatic ties after communist victory reunited the country.

A trip by Vietnamese prime minister Nguyen Tan Dung to the Vatican in 2007 marked a major boost in relations, after regular visits by Vatican cardinals to Vietnam.

Catholic land confiscated since the end of French colonial rule in 1954 remains a contentious issue between the church and state, and has led to demonstrations.

Vietnam has Southeast Asia's largest Roman Catholic community after the Philippines -- about six million among a total population of 86 million.

Religious activity remains under state control.



Vietnam Govt proposes to spend extra 10tr dong to repay debts on FX fluctuations

VnExpress




The government proposed to spend extra 10 trillion dong to increase its capacity to repay foreign debts due to the forex exchange rate differences and short-term debts or repay part of debts falling maturity.

This information was given in the evaluation report on the plans for "allocation and usage of over-collected revenue and expenditure estimates for the central state budget in 2010" by the National Assembly's Finance - Budget Committee at the session of the NA Standing Commission on April 26.

The evaluation report clearly stated in the proposal from the government that state budget revenues in 2010 exceeded 21.2 percent (equivalent to 97.67 trillion dong) and increased compared to the figure of 31.07 trillion dong previously reported to the National Assembly. However, 2010 was a quite variable year so the government proposed additional funds for debt repayment, reinvestment, and overcoming the consequences of natural disasters.

At previous meetings, the government proposed to the National Assembly the budget deficit ratio to GDP in 2010 at 5.6 percent, down 0.6 percent over the estimate. In particular, government spending was expected to exceed revenues of 10.240 trillion dong in 2010 to reduce the deficit on the level of 109.640 trillion dong. After review, real GDP increased by more than 30 trillion dong, so the government proposed for using extra 8.26 trillion dong of revenues to reduce budget deficit to 5.6 percent, while the absolute deficit was 111.44 trillion dong.

The government also proposed to spend 10 trillion dong to increase its capacity to repay debts due to the foreign currency exchange rate fluctuations and repay a portion of short-term loans or loans falling maturity.

Most of members of the NA Finance – Budget Committee agreed with the principle of revenue allocation, and budget estimates towards reducing the deficit, increasing debt payements, contributing to strengthening the national financial security, reducing government debts and national debts.



Vietnam cuts sentence for official turned activist

The Star




A Vietnamese appeals court on Tuesday reduced the jail sentence given to a former Communist Party official turned democracy activist convicted of posting articles on the Internet calling for a multiparty system and democracy, his wife said.

Hoang Thi Tuoi said the court cut the prison term for her husband, Vi Duc Hoi, from eight years to five years at an hourlong proceeding in northern Lang Son province. The term for the house arrest he will serve after his release from prison also was reduced, from five years to three years, she said.

Hoi, 54, joined the Communist Party in 1980 and quickly rose to a high-ranking position that involved overseeing the education of future local party leaders. But he started calling for democratic reforms in 2006 and was expelled from the party a year later.

He has blogged online and written essays calling for change in the government.

Tuoi said the judges from the Supreme People's Court of Appeals announced they were decreasing the jail term because of Hoi's sincerity and cooperation with investigators and his contribution to the party in the past.

"I think the sentence is still too harsh for what he did," Tuoi said by telephone from Lang Son. "He just wrote articles to express his views. He did not do anything against the state."

New York-based Human Rights Watch issued a statement last week urging the court to immediately release Hoi. The organisation honored him with an award in 2009 for his pro-democracy work.

"The government makes a mockery of rule of law when it imprisons former officials and party members for nothing more than their constructive criticism," Phil Robertson, the group's deputy Asia director, said in the statement.

Vietnam's government maintains tight control over all aspects of life and does not tolerate any challenge to its one-party rule. It maintains that people are free to express themselves and that only lawbreakers are jailed.



Legal News - Income from securities could get tax waiver

Tuoi Tre



To revive the stock market, the Ministry of Finance has recommended waiver of tax on income from securities this year, reported Dau Tu Chung Khoan (Securities Investment).

They now pay a 5 percent tax on dividends and a 0.1 percent flat tax on transactions.

Deputy minister of Finance Do Hoang Anh Tuan said the recommendation is in light of the fact that the securities market has been on a downtrend since the beginning of this year.

The 10 percent-plus fall in the VN Index in the first quarter caused many investors, especially securities companies, to suffer losses.

Generally, income from securities was negligible, he said.

Besides, it is unfair to tax dividend earnings but not interest paid on bank savings accounts, and this also dissuades investors from buying stocks, he said.

A detailed personal income tax exemption scheme would be submitted to the government for approval during the monthly Cabinet meeting next month, he added.



Retired diplomatic cars may be taxed

Vietbiz24



About 1,100 diplomatic vehicles sold to Vietnamese owners may be taxed at a rate of 20-30 percent of their value, the Ministry of Finance said yesterday.

The tax is being proposed for cars which otherwise would have qualified for tax exemptions enjoyed by diplomatic agencies and embassies in Vietnam.

The ministry said it was developing a management mechanism for diplomatic vehicles of foreign agencies, organisations and individuals working in Vietnam and would assign the Ministry of Foreign Affairs to oversee the system.

The Foreign Ministry would be responsible for controlling the volume of imported cars and the expiry of tenure of car users and managing the re-export by foreign agencies, organisations and individuals to their countries.

The finance ministry also proposed measures to deal with all kinds of vehicles with diplomatic number plates which were transferred or sold to Vietnamese owners without paying taxes.

The most difficult problem was now to handle individuals who had expired diplomatic terms but had not yet re-exported, destroyed or transferred their cars, the finance ministry said.

By the end of 2009, the finance ministry reported that 4,300 automobiles of diplomatic missions were imported into Vietnam, of which 2,300 cars were not re-exported, destroyed or transferred according to regulations. Of the 2,300, about 1,100 had their foreign owners leaving Vietnam after expired tenures.

As a result, the Ministry of Finance proposed to levy taxes on vehicles of this kind.

The ministry is considering levying a tax rate of 20-30 percent of their value.

The import tax rate for new cars is now 83 percent.



Agribank staff detained for causing $2m loss

Tuoi Tre

Police in HCM City Tuesday detained former Agribank staff Vo Duc Hung and Nguyen Minh Hoa for irresponsibility in their work, causing serious consequences.

They were arrested for violating regulations on lending schemes for credit institutions.

Earlier they were indicted and put under house arrest for the crime.

According to the preliminary investigations, Hung, former head of the Assessment Department at Tan Binh District Agribank branch, offered a loan of 43 billion dong (over $2 million) to Cat Phuong Nam Ltd Company and Truong Phat Dat Ltd Company without checking their illegal loan documents.

Meanwhile, Hoa, an internal inspector at the bank branch, was convicted of agreeing with leaders of the bank branch on lending money to Cat Phuong Nam and not reporting this case to his superiors.



Ministry suggests increase in income-tax threshold

Tuoi Tre



The Ministry of Finance has recommended to the government to increase the income-tax threshold to 5 million dong (US$240) per month from the current 4 million dong.

It requires to be approved by the National Assembly which convenes next in July.

The law also allows a deduction of 1.6 million dong a month each for up to two dependants.

Out of the 7 million income-tax payers in the country, more than 200,000 are in the lowest income bracket of 4 million dong which is subject to a tax of 5 percent.

Thus, if the ministry's proposal is approved, it will mean a loss of tax revenue of nearly 3 trillion dong ($143.5 million).

The proposal will partly mitigate the "irrationality" of the tax law and ease the burden caused by inflation, the ministry said.

There have been complaints for long that the tax threshold is too low, especially in the context of prices that have been galloping for the last few years, a point conceded by the ministry.

But for many the ministry's action is too little too late.

The new threshold too is very low, Vu Quang Hai, a member of the NA Law Committee, said. "Although a little is better than nothing, I think the ministry should have come up with a better proposal."

"In my opinion, the taxable income threshold should be 8 million dong ($383), or 10 times the minimum wage."

Economist Pham Chi Lan said the proposal is a positive move towards amending the Law on Personal Income Tax but the new taxable income threshold shows the ministry has still not listened to taxpayers.

"How can the ministry advocate a threshold of 5 million dong when prices have risen so much, especially in the last few months?"

She too demanded an increase to 8 million dong.

Dr Le Dang Doanh, a senior economic advisor to the Ministry of Planning and Investment, said the ministry has responded too late to developments in the economy.

The ministry's response was too "weak" given that prices have shot up, seriously affection people.

This month's CPI is estimated at 3.16 percent, he said.

Many other countries with lower price rises than Vietnam have already raised income-tax thresholds to help their citizens, he added.



Wine, cosmetic imports may be limited to three ports

vietnambusiness.asia

The government may limit the import of wine and cosmetics products to the three ports of Hai Phong, HCM City and Da Nang, according to the Ministry of Industry and Trade.

The move is being considered as many ports that process imports lack facilities to test the quality of wine and cosmetics products.



Income at 5-8.3m dong/month would enjoy PIT exemption

Nguoi Lao Dong

Ministry of Finance (MoF) has said it is waiting for the National Assembly (NA)'s resolution to give an exemption on personal income tax (PIT) for some taxpayers to lessen difficulties for people amid high increasing inflation context.

Accordingly, under MoF's proposal, the single people with the income of five million dong per month, peope with income of 6.6 million dong per month but having one dependent, and people with income of 8.2 million dong per month but having two dependents will be subject to the tax exemption. The tax exemption will be from the NA's resolution issuance till the end of 2011.

This draft will be submitted to the NA in the session in July 2011. If the NA approves, the tax exemption duration will be implemented in the last six months 2011.

As expected, there will be about 200,000-220,000 people enjoying this tax exemption, accounting for 40 percent of the total PIT payers.

The PIT exemption will not affect much the state budget revenue because the total budget collection from PIT for the whole year 2011 would reach about 29 trillion dong while the total amount of tax exemption would be only three trillion dong.



Government restrictions unable to stop import of non-essential goods

Tuoi Tre

Despite government insistence to restrict import of non-essential goods in 2011, imports continue unabated.

Imports in the first two months of this year have soared sharply as compared to the same period last year.

The government advocates restricting import of essential goods to allow local home made products to reach the local markets with an aim to boost economic growth.

Products that cannot be made well or in sufficient quantities within the country should be given priority for imports.

Products such as various kinds of equipment, materials, state-of-the-art technology, fuel, fertiliser, steel, textile and garments can be imported, as the country is unable to supply adequate amounts.

Import of unnecessary commodities like cigarettes, consumer goods, small automobiles of less than 12 seats, auto parts, motorbikes, cosmetics and alcohol beverages must be locally made.

According to the Ministry of Industry and Trade, import turnovers of non-essential goods reached nearly $1.1 billion in the first two months of 2011, accounting for 7.4 percent of the total import turnover and up 24.8 percent year-on-year.

As many as 10,600 autos worth $180 million and over 266,000 mobile phones worth $7 million were imported, a year-on-year rise of 177.4 percent.

The import of luxurious goods also soared sharply, with a total turnover of $3.42 million, an increase of 36.1 percent over the same period last year.

Cosmetic imports rose 111.3 percent and hair product imports jumped 69.9 percent.

The hike in import of non-essential goods has raised concerns that relevant agencies might not be strictly controlling the import of goods and people not being encouraged to use domestically made goods.



SMEs owned by large firms denied tax extension

Tuoi Tre

Small and medium-sized enterprises which are at least 50 percent owned by large companies are not eligible for the government's one-year tax deferral programme.

Besides, SMEs' income from property, financial, banking, insurance, and securities transactions and services that attract special consumption tax too will not be eligible under the programme. In other words, tax on these incomes has to be paid in the normal course.

A company is considered an SME if it has a capital of less than 10 billion dong and no more than 300 employees.



Duty on used cars may be raised

Vietbiz24

Import of used cars may be levied on progressive duty in respect to car value, in which absolute import tariff on luxuriously and super-luxuriously used vehicles will be higher than current levels, according to Ministry of Finance's proposal, VnExpress reported.

Time to apply the proposal may be May if being approved by the government.

Currently, the lines of used vehicles imported to Vietnam are subject to the absolute tariffs according to capacity of cylinder. Ministry of Finance said, the imposing triggered a paradox that the sorts of super luxury cars like Maybach or Rolls-Royce with the cylinder capacity of more than 4 litres bear the same absolute import duty as luxury vehicles namely BMW or Audi. So the agency said it is right time to re-adjust tariff benchmark so as to be matched with the present situation.

Ministry of Finance recommended two plans of amending absolute tariffs on used vehicles, including a rise in duty on vehicles with cylinder capacity of over 4 litres from $30,000 to $54,000 per unit or imposing of progressive tariff on car value.

Citing a source from the customs agency, the first plan of increasing import tariff on vehicles with the cylinder capacity of over 4 litres was not supported. It is said that applying progressive tariffs on used vehicles in line with unit value is more appropriate with practical conditions. "It is impossible to impose the same import duty on a $500,000 Maybach car and a $50,000 BMW unit", the source added.

Importers also see that a suitable change in import tariffs on vehicles should be done. However, the Ministry of Finance should offer a roadmap and a plan to amend the tariffs.