European Parliament hears progress of EU-Vietnam FTA talks

The European Parliament (EP) heard reports on the progress of negotiations on the EU-Vietnam Free Trade Agreement (EVFTA) in Brussels on February 24 ahead of the final round of negotiations to take place in Vietnam in March 2015.

Chief Negotiator of the EU Mauro Petriccione noted that as Vietnam is the first developing country to get involved in FTA negotiations with the EU, the EU has taken into consideration Vietnam’s development level and has showed certain flexibility in the negotiation process.

He outlined basic contents of the trade pact, including the union’s priorities to government purchase, State-run businesses, and market opening for goods, services and investment.

The chief negotiator said he believed the two sides can wrap up the negotiation at the March talks and the EP will quickly ratify the pact.

Vice Chairman of the EP’s International Trade Committee (INTA) Jan Zahradil expressed satisfaction at the outcomes of the past negotiation rounds, adding that based on these results and the pace of negotiation, the two sides can hope for an early conclusion of the EVFTA.

Vietnamese Ambassador to Belgium and head of the Vietnamese Delegation to the EU Vuong Thua Phong highlighted the significance of the pact to Vietnam.

He underlined Vietnam’s political will to accelerate the negotiation in line with its policy of comprehensive international integration.

Phong said he hopes the two sides will conclude the FTA in the first quarter of 2015 in accordance with the agreements and directions of their leaders.

He also took this occasion to call upon the European parliamentarians to continuously support Vietnam and actively speed up the negotiation process and ratification of this trade deal.

Ore mining rights in four areas to be auctioned

The Ministry of Natural Resources and Environment officially approved a plan on putting up for auction the ore mining rights at four sites, the first bidding event of its kind in 2015.

Bidders will be invited to vie for the right to mine iron ore at Khe Bang in Tan Son district, northern Phu Tho province; metacacbonat (stone for construction and decoration) at Suoi Giang commune in Van Chan district, northern Yen Bai province; gold in Xa Khia in Le Thuy district, central Quang Binh province; and fluorit in Binh Duong in Nguyen Binh district, northern mountainous Cao Bang province.

The auction is held in line with the policy to reform the management of mining activities under the 2010 Law on Minerals.

Mekong Delta to stockpile 1 million tonnes of rice

The Prime Minister has ordered the Mekong Delta to purchase and stockpile 1 million tonnes of rice in the winter-spring crop.

The State Bank of Vietnam (SBV) was requested to direct commercial banks to offer loans for the purchase, with a six-month maturity through August 31.

Interest rates will be wholly subsidised by the SBV until June 30.

In collaboration with the People’s Committees of centrally-run cities and provinces in the region, the Vietnam Food Association will be responsible for allocating the rice to be purchased by each locality.

The Ministry of Agriculture and Rural Development and the Ministry of Industry and Trade will closely monitor the process in line with regulations.

VietJet Air gets trial terminal franchise at Noi Bai International Airport

Private airline VietJet Air has won a franchise for control of part of Terminal T1 at Hanoi's Noi Bai International Airport as it moves to buy the entire terminal under a deal agreed by the Ministry of Transport.

Under the deal, struck yesterday (February 25), VietJet will initially get Lobby E under an overall proposal by the airline to operate the entire T1 and old T2 at Noi Bai for on a 20-year franchise.

T1 serves domestic passengers, with T2 handling international flights.

Some agencies under the ministry recommended VietJet be granted a pilot franchise of Lobby E at T1 to monitor its plans to improve efficiency before taking the negotiations further. The lobby currently serves domestic flights of low-cost airlines, such as VietJet Air and Jetstar Pacific Airlines.

The installation of 52 more wind turbines in phase 2 of the Bac Lieu wind power plant began on February 24 at Vinh Trach Dong commune in Bac Lieu city of the Mekong Delta province of Bac Lieu.

According to the Cong Ly Construction, Commerce and Tourism Ltd. Co., the project’s investor, the construction of facilities in phase 2, which costs VND4.2 trillion (US$197 million), began in November, 2013.

Up to 65% of the workload has been completed to enable the plant’s phase 2 to become operational in the second quarter of 2016, said To Hoai Dan, Cong Ly company General Director.

Dan said that the first 20 turbines of phase 2 will supply electricity to the national grid starting May 29, raising the plant’s capacity to 48 MW, which will be lifted to 73.6 MW by the operation of an additional 16 turbines on September 2, 2015.

On April 30, 2016, the plant’s capacity will reach 99.2 MW with the last 16 turbines running.

In phase 1, the plant’s 10 turbines with a capacity of 16 MW have supplied 58 million KWh to the national grid after 14 months in operation.

With over 3,000 kilometres of coastline and numerous islands within its national boundaries, Vietnam has one of the largest potentials for wind power in Southeast Asia with a total estimated capacity of 24,000 megawatts, equal to the combined capacity of all the currently existing thermoelectric plants consuming high levels of imported coal.

According to figures from the Ministry of Industry and Trade, Vietnam currently has 48 wind power projects with a combined capacity of 5,000 megawatts registered at different stages and mainly located in central and southern provinces.

According to the national power plan through 2020, wind power is being prioritised and encouraged to fulfil the target of installing a combined capacity of 1,000 megawatts by 2020 and 6,200 megawatts by 2030.

Food prices fall following Tet holiday

After Tet (Lunar New Year holiday), prices of food and farm produce at traditional markets in HCM City fell significantly compared to normal days, especially for vegetables, due to an abundant supply.

At Van Thanh, Thi Nghe and Tan Son Nhat markets, a kilo of Da Lat kohlrabi, for instance, was priced about VND7,000-10,000 compared to VND10,000-VND15,000 (US$0.46-$0.7) before Tet.

Broccoli prices fell to VND25,000-VND30,000 ($1.17-$1.4) a kilo, according to traders. Many other kinds of vegetables sold at prices 20 per cent lower than before Tet.

The price of Da Lat Lys flowers fell from VND100,000-VND180,000 ($4.69-$8.4) for a bundle of five sprigs before Lunar New Year to VND80,000 ($3.75).

The supply of farm produce and flowers were abundant while demand after the New Year was still modest, resulting in lower pices, said traders.

Prices of seafood and aquatic products were rather stable, with about VND55,000-VND60,000 for a kilo of pink tilapia, and VND55,000-VND65,000 for a kilo of carp or snakehead fish.

Supermarkets and convenient stores all reopened after Tet, but sales remained low compared to normal days of last month.

At supermarkets, customers mainly shopped in the morning, with fresh food being the bestseller.

Commodity prices at supermarkets remained stable. In addition, to stimulate sales, supermarkets such as Co.opmart, Big C and Lotte Mart have launched promotions with discounts between 5 and 49 per cent on offer on many products.

But prices remained high for eatery services because many of them applied a "Tet surcharge".

Le Thi Thu from HCM City's District 7 said that the service price hike during Tet was acceptable.

"While other people are off, they still have to sell food. Sellers have the right to set a price and customers can decide if they want to use those services," she said.

For instance, a pho eatery on Xo Viet Nghe Tinh Street in Binh Thanh District charged VND30,000 for a bowl of pho, VND5,000 higher than the normal price.

The owner of the shop said that the "Tet price" will be applied until the middle of this lunar month.

Similarly, many eateries and coffee shops in many districts in the city are still applying "Tet prices", which are 15-25 per cent higher than normal prices.

Many hair salons increased prices by VND5,000-VND10,000 for their hair washing services before Tet, and they plan to maintain that prices for this year.

Parking fees, especially near pagodas, including Pho Quang in Tan Binh District, and Vinh Nghiem in District 3, remain high at VND10,000-VND15,000 for a motorcycle compared to the normal price of VND5,000.

Construction of Mekong Delta bridges speeds up

The Ministry of Transport accelerated the construction of four major bridges in the Cuu Long (Mekong River) Delta, aiming to increase socio-economic development in the region.

The completion date for Co Chien Bridge, with investments totalling VND2.31 trillion (US$108 million), will be moved up from the beginning of August as originally planned to May 19, says Deputy Minister of Transport Nguyen Van The. The change comes after a request from Transport Minister Dinh La Thang.

Once complete, Co Chien Bridge, together with Ham Luong Bridge and Rach Mieu Bridge, will connect Tra Vinh with Highway 60 in Tien Giang Province. They will cut 70 kilometres off of the drive from HCM City to Tra Vinh, and help ease traffic on Highway 1A.

Another important project in the delta that should be completed as soon as possible is My Loi Bridge, which will connect Tien Giang and Long An provinces. With an estimated cost of VND1.44 trillion ($67.3 million), the bridge should be finished by the end of August.

The inauguration of Co Chien Bridge and My Loi Bridge this year will create more motivation for the development of Tien Giang, Ben Tre, Tra Vinh and all provinces in the Ca Mau Peninsula, Deputy Minister of Transport Nguyen Van The told the Tuoi Tre (Youth) newspaper.

The ministry asked investors and contractors to finish construction on Cao Lanh Bridge and Vam Cong Bridge by May 2017, six months ahead of schedule.

These two bridges will help traffic flow more efficiently in the western region, creating better conditions for the development of the Long Xuyen Quadrangle.

The total investments for Cao Lanh Bridge and Vam Cong Bridge are VND3 trillion ($142.7 million) and VND5.7 trillion ($267 million), respectively.

The Ministry of Transport is also looking to speed up the construction of highways in the delta. The Trung Luong-My Thuan Expressway Project, with an estimated cost of VND14.68 trillion (US$672.8 million), is expected to open in December 2018, and shorten the travel time from Ho Chi Minh City to My Thuan to one hour.

The ministry is also preparing to submit to the Government a mechanism for supporting My Thuan - Can Tho Expressway Project investors. Upon completion, the My Thuan 2 Bridge and My Thuan - Can Tho Expressway will reduce the distance between HCM City and Can Tho, creating favourable conditions for Mekong River Delta investors.

According to The, accelerating construction requires getting consensus on site clearance from authorities and residents near the infrastructure. In addition, all projects' progress should be reviewed and contractors should choose strategies that can reduce the time needed to build but still ensure quality.

Local agriculture sector reliant on seed imports

Viet Nam imports over 80 per cent of its vegetable, flower and fruit seeds, according to Ha Noi Moi newspaper.

Domestic breeding technology remains underdeveloped and is unable to meet production demands.

To address the situation, the Ministry of Agriculture and Rural Development said it would evaluate varieties across the nation to determine their strength and weaknesses, with the aim to create high-quality varieties.

In a Government-approved plan, 1.3 million hectares will be set aside for growing vegetables, flowers and fruits by 2020. 

Da Nang port hastens infrastructure construction

The management board of Da Nang port in the central city of Da Nang is focusing on the second phase of the Tien Sa port upgrade, aiming to better manage container goods.

When completed at an estimated cost of nearly 1 trillion VND (47 million USD) in 2018, the Tien Sa port is expected to be able receive 50,000 DWT vessels.

Additionally, the port authorities are paying more attention to developing logistics services as a part of its future strategic direction. They are seeking investors to build a logistics service centre on a 20h plot of land in Hoa Vang District.

As the projects are fulfilled and commissioned, they will improve the capacity of the Da Nang port and the quality of its services, contributing to reducing the overload of container ships.

In 2014, nearly 130 billion VND was dedicated to building infrastructure, modernising equipment, training human resources and improving service quality in the port.

The port of Da Nang has handled over 1 million tonnes of cargo thus far this year, a 3 percent annual increase. The number of containers transported through the port increased 22.4 percent compared to the same period last year.

The port’s management board aims to handle 6.5 million tonnes of cargo this year with the intent to make the port one of the ten leading container ports in Vietnam.

Under the seaport development plan through 2020, the Da Nang port will construct a new wharf capable of handling container vessels of 3,000-5,000 TEUs.

Da Nang port, which comprises of the deep-water Tien Sa seaport and the Han River Port, is an essential component of the logistics supply chain in the Central-Central Highlands region.

Government gives guidelines on Public-Private Partnership agreement

The Government has issued a decree on investment in the form of public-private partnerships (PPPs), which sets out five conditions for a PPP project.

Accordingly, in order to get approval, a PPP project should be relevant to the development master plans of the relevant sector and region and the socio-economic development plans of the area where the project is to be carried out.

Secondly, the project should meet legal conditions relevant to the field of investment.

Thirdly, the project should be capable of attracting and absorbing investor’s capital, technology and management experience.

Fourthly, the project should be capable of supplying products and services continuously at stable quality and meeting the needs of consumers.

Fifthly, the project must have a minimum investment capital of 20 billion VND (952,000 USD), excluding those in the form of Operations and Maintenance (O&M) and those operating in agricultural and rural infrastructure, and production services related to agricultural product processing and sales.

Projects not listed on development plans of sectors and regions or local socio-economic development plans require approval from authorized bodies and provincial People’s Committees.

Priority will be given to projects meeting the above requirements and have the ability to recovery capital from business activities.

The decree also stipulates in detail the investor’s ownership capital and mobilised capital. For projects with a total investment capital up to 1.5 trillion VND (71.4 million USD), the investor’s ownership capital must be at least 15 percent of the total capital. The percentage of ownership in projects with capital exceeding 1.5 trillion VND must be at least 10 percent.

Government funds are not included in the calculation of the total investment capital to determine ownership ratios.

Trade relations between Kuwait and Vietnam have made satisfying progress, the Consulate of Kuwait in HCM City said in a statement released for the 54th anniversary of its independence day.

Trade exchange value between the two countries reached US$691 million in 2014. Vietnam's exports to Kuwait in 2014 grew twice as much as the previous year, according to figures from the Vietnam Customs Bureau.

Omar Al-Qenaei, Consul General of Kuwait in HCM City, invited Vietnamese companies to make investments in a mega-development plan approved by the Government of Kuwait. The plan comprises 1,100 projects worth a total of US$107.8 billion. It includes the creation of Silk City, a commercial hub and free trade zone with the capacity for 700,000 residents.

Kuwait and Vietnam established diplomatic relations in 1976.

Government puts stop to exports of coal dust

As per a recent Government directive, Vietnam will stop exporting coal dust in 2015, in order to ensure the supply of coal for thermal power production for the 2018 to 2020 period.

In keeping with the Government instruction, Deputy Prime Minister Hoang Trung Hai has asked the Ministry of Industry and Trade (MoIT), and the Vietnam Coal and Mineral Industries Group to adjust its coal production and formulate plans to meet the target.

Deputy PM Hai also directed the Ministry and the group to adjust the coal industry's development strategy, by suggesting stable and long-term exploitation to ensure sustainable operations for the coal industry to meet power demand. The coal industry will produce roughly 50 to 60 million tonnes of coal annually during the period.

The strategy also suggests that domestic coal will meet demand at existing power plants and industrial establishments in other industries. The country will have to import coal only for new plants.

MoIT has also been asked to formulate policies that support the development of recycled energy sources that have so far not gotten the Government's support.

As domestic coal demand for thermal power plants is very high, the country will have to import an estimated 20 to 30 million tonnes of coal by 2016. This need will increase to 40 to 50 million tonnes of coal annually by 2020.

HCM City targets US$35 billion for export earnings

The southern economic and business hub, Ho Chi Minh City, targets export revenues of US$35 billion this year, a year on year rise of 8-10%, according to the municipal Department of Industry and Trade.

To reach the goal, the city has steered businesses to focus on shipping industrial and processed goods with high added value.

The businesses are also advised to strengthen their presence in big markets in Europe, the America, and Asia, while seeking new potential outlets in Africa and Oceania.

In 2014, excluding crude oil, the City’s export revenues reached US$27.8 billion, up 12% from 2013.

In the first month of 2015, it raked in over US$2 billion from overseas shipments, a 9.1% increase year on year.

Vietnam’s second richest man buys new aircraft at $20-27 million

In middle-income Vietnam where buying a new motorbike is already a reason for celebration, there is a man well off enough to even purchase a new business jet to replace his old turboprop.

Doan Nguyen Duc, 53, is the man who has just bought a Legacy 600 at more than US$20 million, according to VTC News.

But newswire VnExpress said the price could be as high as $27 million.

Legacy 600 is a business jet derivative of the Embraer ERJ 145 family of commercial jet aircraft and it has seating for two crew and 13-14 passengers, according to its maker Embraer.

Embraer says that the Legacy 600 can carry four passengers for 6,297km and eight passengers for 6,019km, adding the plane can reach Mach 0.78 for a normal speed cruise and Mach 0.80 at a maximum operating speed. (Mach 1 = the speed of sound)

The aircraft has five 8″ x 7″ LCD displays and CCD, charts and maps capability, a data loader 1000 with SD card and USB ports, dual integrated computers, touchscreen PCUs at each seat, and other modern equipment, according to Embraer.

Tien Phong (Vanguard) newspaper said that in order to buy an aircraft, Vietnamese individuals have to prove that they have had pilots work for them, have maintenance facilities, and ensure aviation and defense security.

Buyers are required to register their airplanes with competent agencies after meeting these requirements, the paper reported, adding that they have to apply for a license before each flight.

Duc splashed out about $7 million on a Beechcraft King Air 350, imported from the U.S., in 2008 and said he would use the turboprop for business trips.

That turboprop is 10 meters long and has its wings spread over 15 meters, An Ninh Thu Do (Capital Security) newspaper said, adding that it can fly 3,500km on end and hit the maximum speed of 583km per hour.

The newspaper, which is managed by Hanoi police, said that state-owned Vietnam Air Traffic Management Corporation will buy Duc’s turboprop for its operations.

Duc is now chairman of Hoang Anh Gia Lai Group whose portfolios range from mining, cow raising, rubber planting to real estate and hydropower plant construction.

He owns a Vietnamese league club, Hoang Anh Gia Lai, and an Arsenal-supported football training center, the Hoang Anh Gia Lai-Arsenal JMG Football Academy, which he spent $4 million founding in 2007.

He is the second richest man in Vietnam with his stock value topping VND7,575.118 billion ($353 million) in 2014, too whopping for Vietnamese whose GDP per capita was around $2,000 last year.

Pham Nhat Vuong topped the 2014 list of the wealthiest people on the stock exchange in Vietnam by VnExpress, with his assets worth 20,188.252 ($941 million). Vuong currently chairs real estate conglomerate Vingroup.

Many Vietnamese would throw a party and invite friends to celebrate when they purchase a new motorbike, the favored means of transport in the Southeast Asian country.

But there is no word from Duc as to such celebration for his new airplane.

Vinachem targeting equitization of units this year

The Viet Nam National Chemical Group (Vinachem) intends to complete the equitisation of all its subsidiary companies this year, said Deputy General Director Bui The Chuyen.

These companies, in which Vinachem holds registered capital, include the Ha Bac Nitrogen Fertilizers and Chemicals Company, the Ninh Binh Nitrogenous Fertilizer and Chemical Limited Company and the Viet Nam Chemical Import & Export Corporation (Vinachimex).

Chuyen said the group will also divest its investment capital from eight businesses, including the Vietnam Industrial and Commercial Securities JSC, the Hanoi Soap JSC and the Additives and Petroleum Products Joint Stock Company.In addition, he said the group will have to reduce its holdings to 30 per cent of the working capital of Chemical Industry Engineering JSC and Construction and Investment Consultancy JSC.

"These developments are important tasks that Vinachem will have to carry out this year, and are aimed at synchronising organization, reducing spending, focusing on human resource training and renovating technology and production lines," said Chuyen.

It is also expected to boost trade and production in 2015 and going forward," he stressed.

In 2015, the domestic economy is expected to encounter many difficulties, owing to the impact of the world's disparate situation.

As for good markets, especially in the fields of chemicals and fertilizers, the economy will experience medium-intensity disorders because of the supply and demand impact, fluctuation in oil prices, and due to fierce competition between Viet Nam and other ASEAN countries.

This year is also the time when free trade agreements between Viet Nam and its partner countries officially come into effect, gradually erasing trade protection barriers, such as tariff and other policies.

The General Director of the Vinachem Group Nguyen Gia Tuong said the group has submitted to the Prime Minister, its development strategy for the 2015 to 2020 period with a vision to 2030 for approval. At the same time, the group has been working with the ministries of Finance and Industry and Trade to study and issue a financial regulation, which aims to orient the group's operations and implementation of tasks and plans the next time around.

The group also completed the equitisation of its subsidiary companies in 2014, including the Southern Basic Cheminal JSC, DAP-Vinachem JSC and Industrial Gases and Welding Electrode JSC.

The group is targeting a 7.2 per cent jump in its industrial production to more than VND45 trillion (US$2.14 billion) and a similar fillip in revenue to over VND49 trillion ($2.33 billion) this year. Its employees' salaries are also expected to increase by 5 per cent.

Ministries instruct steady petrol prices

The Ministry of Finance and the Ministry of Industry and Trade on February 24 instructed wholesale businesses to keep petrol prices steady in order to stabilize the prices of necessary items in the market.

The price has been capped at VND15,686 a liter of Ron 92, VND15,356 for E5 gasoline ethanol blend and VND15,183 for diesel.

Kerosene and engine oil prices are not permitted to surge more than VND15,623 a liter and VND11,861 a kilogram.

Businesses have also been ordered to reduce contribution level to the price subsidization fund by VND40 to VND300 a liter of gasoline and 0 dong to E5.

The contribution rate slides to VND300 a liter of diesel and kerosene but increases by VND30 to reach VND300 a kilogram of engine oil.  

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