Vietnam's first BOT power plant opens

A US$450 million (VND7.07 trillion) gas-fired power plant, Vietnam's first power plant built under the BOT (build-operate-transfer) form began commercial operations in the southern coastal province of Ba Ria Vung Tau.

The plant, which took 26 months to build, is fueled by gas from the Nam Con Son basin off the coast, under a 20-year agreement with a consortium including Britain's BP; SembCorp Utilities Pte Ltd of Singapore; and Japanese Kyushu Electric Power Co Inc/Nisso Iwai Corporation alliance.

The plant will be handed over to Electricity of Vietnam (EVN) after the 20-year agreement expires,

The plant can consume about three million cubic meters of gas per day at full capacity. With a design capacity of 716.8 megawatts, it is expected to add almost 10 percent to the current total designed capacity of all power plants in Vietnam.

The nation's power demand is expected to surge between 14 and 15 percent this year (2004) according to EVN who warn against a shortage of power in forthcoming months following under- performance at a major hydroelectric power plant due to the falling level of water in reservoirs.

"Power supply will face many difficulties in the April-June period and power shortage at peak hour[s] would be probable" the EVN Power management center advised.  http://www.atimes.com/atimes/Southeast_Asia/FC04Ae03.html

Vietnam's biggest Japanese car assembler, Toyota Motor Corp , said it recently laid off nearly 20 percent of its workforce in the country because of a tax hike that has hit sales.

From March 1, Toyota shrank its Vietnam workforce to 545 from 670.

The firm, which controls about 26 percent of the country's auto market, became the first among 11 foreign car makers in the country to slash jobs after new taxes, up to 24 percent on car sales, came into effect this year.

"We have to let people go because of the shrinkage in sales," said an official from the firm, which operates in a joint venture with a Vietnamese partner.

Sales figures for February were not available but company officials were quoted by state media as saying January-February sales dropped 50 percent from a year earlier.

The firm sold 667 vehicles in January this year while sales for the whole of 2003 stood at 11,769 units.

Foreign auto makers have said they expect to almost halve production in 2004 to a combined 22,000 cars as the new taxes squeeze demand.

In May last year, the government slapped the special consumption tax on locally assembled cars along with a 25 percent tariff on imported auto parts from January this year.

The taxes and duties are scheduled to rise until 2007, when the special consumption tax will reach 80 percent for automobiles with fewer than five seats.

Ford and General Motors Corp protested the moves, which Hanoi said were needed to offset projected falling revenue in 2006 when it joins the ASEAN free trade agreement.

Vietnamese buyers, scrambling to beat the higher ticket prices this year, sent car sales surging 59.4 percent in 2003.

Foreign car makers say they employ more than 7,500 workers. They have warned that if the higher taxes are not repealed, investment in the sector will drop to $1 million by 2007 from previous projections of $18.7 million.

 Copyright 2004, Reuters News Service  http://www.forbes.com/home_asia/newswire/2004/03/03/rtr1284191.html

Continental Airlines, the world's seventh largest carrier, opened its first sales office in Vietnam ahead of an expected formal code-share agreement with Vietnam Airlines.

The formal commencement of air links will be another significant step in the full normalization of relations between Washington and Hanoi, who only established diplomatic ties in 1995, two decades after the war ended.  http://www.usatoday.com/travel/news/2004-03-03-continental-vietnam_x.htm

American Airline routes link Vietnam with US west coast 

Three airlines will offer flights from either Hanoi or Ho Chi Minh City to Los Angeles, San Francisco, San Diego or Las Vegas via Tokyo starting next month.

American Airlines, Japan Airlines and Vietnam Airlines will begin operating the routes on April 5. It will cost US$499 (VND7.86 million) to fly one way, and $899 to fly return.

American Airlines, which opened an office in Vietnam in February, has been flying from Hanoi and Ho Chi Minh City to San Jose (California), Chicago, Dallas, New York and Los Angeles through Tokyo since January 1.

Passengers can connect with flights to 250 other destinations in the US and around the world from the US cities. American Airlines offers about 2,400 daily flights from the United States to destinations around the world.

Ngo Minh Duc, country general manager at American Airlines, said the airline was still working on plans for direct routes between Vietnam and the United States.

Vietnam Airlines announced plans to offer flights again from Quy Nhon to Hanoi through Da Nang, and will offer 10 weekly flights on the Quy Nhon-Ho Chi Minh City route, to meet rising demand.

However, the 0% tariff is seen as a temporary solution by the Minister. http://www.steelvillage.com/readTitle.cfm?ID=2833&title=Vietnam%20Reduces%20Steel%20Tariffs%20to%20Stabilize%20Prices

Vietnam's giant cement plant under construction

Construction of northeastern Vietnam's largest cement plant began in the mountainous province of Yen Bai on Sunday.

The Yen Binh cement plant, which is designed to produce 910,000 tonnes of cement per annum, will cost the Yen Bai Cement Joint Stock Co VND1.16 trillion (US$73.8 million).

Company president Phi Thai Binh said the plant will be equipped with overseas technology and is scheduled to start operating in December 2005, generating 600 jobs.

At Sunday's ground-breaking ceremony, Deputy Prime Minister Nguyen Tan Dung asked the company to strive for high-quality construction while not exceeding its budget.

Dung urged provincial administrators to ensure resettlements for a yet-to-be-determined number of households displaced by the new plant, with plans to finish a new residential area before the plant's completion.

The deputy prime minister held working sessions with Yen Bai leaders, where he praised the province's socio-economic achievements but pointed to problems with unemployment.

During his visit to Yen Bai, Dung also inspected the Van Phu bridge construction site, Thac Ba hydroelectric power plant and Hoang Lien Son Technical China Joint Stock Co.

Meanwhile, the Vietnam Cement Corp said it would invest more than VND3 trillion ($191 million), double last year's expenditure, to put the Tam Diep and Hai Phong cement plants into operation over the next two years. Construction of these plants had stagnated due to design changes and rising steel prices.

After the corporation's discussions with investors, the Hai Phong plant will focus on installing a 110-kilovolt electricity line, production lines and warehouses. The Tam Diep plant should conduct a trial run late this year.

The corporation would also continue building the Hoang Thach 3, Binh Phuoc, But Son 2 and Ha Tien 2-2 cement factories. http://www.atimes.com/atimes/Southeast_Asia/FC05Ae04.html

Vietnam must seize the day on FDI
Foreign investment in Vietnam has had a rocky ride since 1996. Recent statements by Hanoi, however, indicate that the ride will be much smoother from now on. True, the economy is healthier now than a decade ago, and investments are coming in at a stronger rate than in the dismal late 1990s. But several business people with long experience in the country suggest that cautious optimism is the wise man's creed when considering investing in Vietnam. A look back at the unstable investment patterns of the past eight years will additionally help any would-be investor grasp the lay of the land.

Read the full story. (Copyright 2004 Asia Times Online Co, Ltd)

 Our offices |  Back to index

Historic Issues (1997-2003) On Line | Back Issues (2004) On Line | Current Issue