Thursday, January 20, 2011

HCMC targets 12 percent growth in 2011-2015

Le Thanh Hai, secretary of the Ho Chi Minh Ctiy Party Committee, has said the city will try its best to attain an annual GDP growth rate of 12 percent during the 2011-15 period.

In a political report delivered at the 9th Party Congress of HCMC, Hai said the city targeted an annual value-added growth of 13 percent for its service sector; 11 percent for the manufacturing sector and 5 percent for agriculture.

Hai said in 2015, the service, industrial and agricultural sectors would account for 57, 42 and 1 percent of the city's GDP, respectively.

Other targets contained in the report include maintaining the city's birth rate at less than 1.1 percent per annum.

By the end of 2015, per capital income in the city will reach US$4,800 compared with $2,800 in 2010.

The city will create 120,000 new jobs every year compared with nearly 118,000 per year in the 2006-10 period.

Hai also said that by the end of 2015, skilled workers would make up 70 percent of the city's workforce.

The number of families under the poverty line of VND12 million/person/year would drop to below 2 percent of the city's population, he said.

By the end of the next five-year plan, the city's doctor-patient ratio would be 15 for every 10,000 residents.

The number of households in urban areas accessing clean water would reach 98 percent.

The city targets building 39 million square metres of new housing, raising the per capita housing area in the city to 17 sq.m in 2015 from 14.3sq. m in 2009.

Hai said 100 percent of solid waste and wastewater generated by city enterprises would be collected and treated by the end of the next five-year plan period, and all industrial parks and export processing zones without exception would have central wastewater treatment systems.

He added that the city would pay a lot of attention to envionmental protection by promoting green production and improving development quality.

It would also give priority to developing its service sectors including financial, banking, commerce, transportation, post and telecommunications, warehousing and port services.

Due attention would be paid to the development of the ITC, real estate and tourism industries, as well as the health, and education and training sectors, Hai said.

The city would focus on developing public transportation, including urban railway projects, expressways and beltways to connect the city with the Mekong Delta and other localities in the country, he added.

Authorities would spare no effort to curb traffic jams and prevent flooding. A programme covering 100sq.km had been mapped out to stop flooding in inner districts and to prevent flooding elsewhere.

The city would continue its efforts to create a level playing field for companies from different economic sectors and to assist small- and medium-sized enterprises to access loans, technology and new markets, Hai said.

 

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Malaysia keen on Vietnam’s franchise market

Vietnam is a new strategic market for Malaysian businesses to invest in franchises, announced the Malaysian Franchise Association (MFA).

At a seminar held in the Malaysian capital city of Kuala Lumpur Wednesday, MFA Managing Director Sofia Leong Abdullah praised Vietnam’s potential, a country with a population of 87.9 million and ranked third in economic growth across the world.

Vietnam ’s purchasing power has also rapidly increased, partly thanks to US$20 billion in foreign remittance, he said, noting that the country’s franchise market is strongly developing with the average turnover increasing by 50 percent each year and this trend is expected to last till 2012.

The two Malaysian brands that already operate in Vietnam are Setia and Berjaya, he added.

During talks with reporters after the seminar, Abdullah said that the MFA will work with Perbadanan Nasional, a leading agency employed by the government to develop the country’s franchise industry, and the Malaysia External Trade Development Corporation (Matrade) to promote Vietnam’s potential market to Malaysian businesses.

The MFA intends to bring seven or eight local franchises to Vietnam by the end of this year, he said, adding that the number will increase in 2011.

According to Abdullah, demand for franchises in Vietnam can be seen in the retail sector with 25 percent, beverages 20 percent, restaurant services 16 percent, fashion 9 percent and education 5 percent.

He underlined that education is the sector where the MFA sees the biggest potential, including English language programmes, that Malaysian brands can tap into.

Hanoi, Ho Chi Minh City and other cities such as Da Nang, Can Tho and Hai Phong will be strategic destinations for Malaysian companies to invest in, he said.

 

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Oil refinery slips up on poor market forecast

Failure to precisely forecast demand and supply has left Vietnam’s sole oil refinery with huge volumes of unsold stocks, the state-owned Vietnam National Oil and Gas Group, its operator, said.

The Dung Quat refinery has 750,000 tons of gasoline/oil and 2 million cubic meters of liquefied petroleum gas in stock since domestic demand is 10 percent lower than forecast and the plant’s output is 25 percent higher, Phung Dinh Thuc, general director of PetroVietnam – as the firm is known -- told the media Thursday.

But he did not provide the actual demand and supply figures.

The most practical solution now is to boost demand rather than reduce capacity since the country faces a trade deficit, he said.

At a meeting between PetroVietnam and the Ministry of Industry and Trade earlier this week, the company warned that if measures are not taken to boost exports and domestic consumption, the plant has to cut production due to lack of storage space.

Last month it had asked Quang Ngai Province, where the refinery is located, for permission to expand the plant by 134 hectares to increase its annual capacity from 6.54 million tons to 10 million tons.

But the problem with excess supply dates back to the construction of the plant last year.

It was much delayed and the exact date of its handover by French contractor Technip was not decided until early this year, forcing local oil distributors to sign import contracts.

Thus, while the plant supplies nine out of the 11 petroleum firms in the country but they only buy 30 percent of its output.

In the January-September period, imports of oil products were worth US$4.87 billion, an increase of 4 percent year on year.

The state-run Vietnam Petroleum Corp (Petrolimex), which has a 60 percent retail market share, also has contracts with foreign suppliers and buys only 19 percent of the plant’s output.

It recently became the third distributor to buy directly from the pant after PetroVietnam subsidiaries PV Oil and Petec.

This followed recent complaints by the company that it is illogical for PetroVietnam to require all oil firms to buy Dung Quat’s products through PV Oil instead of directly.

PV Oil charged a high intermediary fee, it also complained.

The Dung Quat refinery has a monthly capacity of 150,000 tons of gasoline, 240,000 tons of diesel oil, 23,000 tons of LPG and others, enough to meet 33 percent of current domestic demand.

It had produced around 5 million tons of products as of last month after reaching full capacity in May.

It has been unable to sell large quantities of jet fuel to local airlines due to red tape.

Last month it shipped 4,500 tons of jet fuel to BP Singapore.

The plant produces six items -- gasoline, diesel, LPG, polypropylene, jet fuel, and fuel oil.

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2 held in UK over Australia banknote graft

Two men were arrested in raids by Australian, British, and Spanish police over alleged corruption involving a banknote-printing firm part-owned by Australia's central bank, officials said on Thursday.

British and Australian police said they carried out 15 coordinated swoops Wednesday, while there were two more in Spain. Two men were arrested in Britain and are being questioned, Britain's Serious Fraud Office said.

"This action ... involves the activities of employees and agents of Securency International PTY Ltd and their alleged corrupt role in securing international polymer banknote contracts," a statement said.

Melbourne-based Securency is embroiled in a long-running investigation over claims its agents offered bribes to officials in countries including Indonesia, Vietnam, Malaysia, and Nigeria to win contracts, according to media reports.

Australian police on Thursday confirmed raids in six areas in and around Melbourne and said they were part of a joint probe with British investigators.

Securency was not immediately available to comment while the Reserve Bank of Australia, the central bank, said it takes the allegations "very seriously" and "condemns corrupt behaviour of any kind."

Securency is a joint venture between the bank and Innovia Films, which helps design and produce polymer banknotes known for their durability and for being hard to counterfeit.

The company's website says its banknotes have been issued in more than 30 countries around the world, from China to Zambia and Mexico.

Its managing director and company secretary were suspended last November as Australian police probed alleged bribery and kickbacks which reports say amounted to several million dollars.

RBA could take all of Securency

The private equity group that sits behind the Reserve Bank's partner in the troubled Securency polymer banknote business is conducting an asset fire sale that may open the way for the central bank to take 100 per cent ownership of Securency, as a prelude to completely offloading it.

Co-ordinated raids by the Australian Federal Police and Britain's Serious Fraud Office on Wednesday in Australia and Britain were related to allegations that Securency paid millions of dollars in bribes through agents in countries where it marketed its polymer banknote technology.

The allegations were first raised by The Age in May, and are spurring the Reserve's search for ways to get Securency off its books.

Securency is a 50:50 joint venture between the Reserve Bank and Innovia Films, a British-based specialty plastics producer. Innovia was the subject of a €320 million leveraged buyout in 2004 that was led by Candover Partners, the funds management arm of Candover Investments.

Candover was a high-profile private equity investor in Britain and Europe during the boom. But Candover Partners shut its main private equity fund in January after Candover Investments failed to inject new capital, and Candover Investments announced last month that intended to sell its assets, and return the cash proceeds to its investors.

Innovia and its stake in Securency are not automatically on the block following Candover Investments' move. The senior investor in Innovia is Candover Partners, not Candover Investments, and there are other non-Candover shareholders.

 

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Harbour construction delays raise fears among boat owners

THUA THIEN-HUE — The tardy progress of the construction of a US$2.1 million harbour in the central province of Thua Thien-Hue has left hundreds of boat owners worried for the safety of their vessels during the fast approaching stormy season.

The Phu Hai breakwater project was started in 2008 by the provincial Department of Agriculture and Rural Development and was expected to provide safe moorings to 500 boats. It was due for completion in May of this year.

However, the project was still not finished and was unlikely to be completed by the end of this year, said Phan Van Song, Phu Hai Commune's Party Committee Secretary.

Song said that the project's progress was lagging behind because the contractor, Vinashin Infrastructure Construction and Development Company, was short of both construction facilities and human resources.

"The work must be urgent, but there were only a few workers on the construction site," he said.

According to industry expert Tran Cong Dang Tuong, only around 300 metres of the total 625-metre-long breakwater needed had been completed and other sections also remained unfinished.

Phan Thanh Hung, head of the province's Sub-department of Dyke Management, Flood and Storm Control said that relevant parties had agreed to push back the deadline until June 2011.

The province's Department of Agriculture and Rural Development did not want to change to another contractor as the process of tendering and the transfer of documents would take too long, Hung said.

Currently there are 4,000 boats and ships operating in the waters off the province and of the 32 harbours available, only 12 were correctly constructed with safe wharves. — VNS

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Infrastructure projects seek investors

Construction work on Ngoc Thap Bridge which is being built with State fund in the northern province of Phu Tho. The Government is looking for investment under Public-Private Partnership into infrastructure projects. — VNA/VNS Photo Anh Ton

Construction work on Ngoc Thap Bridge which is being built with State fund in the northern province of Phu Tho. The Government is looking for investment under Public-Private Partnership into infrastructure projects. — VNA/VNS Photo Anh Ton

HA NOI — Viet Nam is calling for infrastructure investment under the Public-Private-Partnership (PPP) model as funds from the State budget, Government bonds and ODA (Official Development Assistance) capital are insufficient to meet demand.

Dang Huy Dong, deputy minister of Planning and Investment, said Viet Nam hoped to cooperate with Italian businesses to attract capital and exchange work experiences in infrastructure improvement.

Dong spoke at a conference on Viet Nam's infrastructure development held on Monday in Ha Noi by the Ministry of Planning and Investment, in collaboration with the Italian Trade Commission and the Transport Ministry.

The Italian ambassador to Viet Nam, Andrea Peregini, said his country had used the PPP model for several projects that were expected to be profitable in the future.

"Italian businesses are interested in highway projects in Viet Nam because similar projects under the PPP model in Italy had been successful," he added.

Marco Saladini, Italian trade commissioner in Viet Nam, said more than 5,000 kilometres of highway in Italy were built mainly under the PPP model by large European companies.

Apart from highway projects, Italy has used the PPP model for underground parks as well as electricity and transport-management projects.

Saladini said the Vietnamese Government had implemented an online auction for projects that was more transparent than in the past, creating a more favourable climate for investors.

He added that Italian businesses were committed to creating jobs for local workers at their projects in Viet Nam.

In the 2006-10 period, investment capital for infrastructure development was about VND140 billion (US$28 billion) per year.

However, the need for transport, energy and environmental projects has not yet been met.

Dong said infrastructure improvement was the top priority for Viet Nam because of increased development.

Viet Nam needs to have 3,000-5,000km of highway, 300-400km of metro, and dozens of seaports in the next 10 years.

To meet the demand, Viet Nam needs to attract billions of US dollars to develop infrastructure in the next five to 10 years.

To meet the demand, Viet Nam needs to attract billions of dollars to develop infrastructure in the next five to 10 years.

Viet Nam has used the PPP model to attract more private and foreign-direct invested capital for its projects, including the Ninh Binh-Thanh Hoa Highway and Dau Giay-Phan Thiet Highway. The two highways are expected to be completed by 2014.

Other projects using the PPP model include Highway No.1 Upgrade Project, Ha Noi-Lao Cai Railway, and Phnom Penh-HCM City Highway, according to the Ministry of Transport.

In the near future, Viet Nam will call for more PPP and FDI capital for transport projects, such as Da Nang-Quang Ngai, My Thuan-Can Tho, Noi Bai-Ha Long, Dau Giay-Da Lat, Ben Luc-Long Thanh, the international port in Hai Phong and HCM City-Can Tho Highway. — VNS

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Developers focus on lower-cost housing

Apartment blocks in Tan Phu District, HCM City. Property developers remain optimistic about the medium- and low-cost housing segments. — VNA/VNS Photo Manh Linh

Apartment blocks in Tan Phu District, HCM City. Property developers remain optimistic about the medium- and low-cost housing segments. — VNA/VNS Photo Manh Linh

HCM CITY — Property developers remain optimistic and are focusing on the medium – and low-cost housing segments though demand has yet to recover from a prolonged slump.

Hugo Slade, deputy director of market research company Viet Nam Cushman & Wakefield, said so far this year, 46 development projects with 8,550 apartments costing an average of VND15.5 million per square metre came into the market.

Developers continued to launch their products despite low demand caused by high interest rates and tortuous loan procedures for buying houses, he added.

According to the director of a property company who wished to remain unnamed, since the market has been dull for two years, most developers have run out of money.

Among those are Happy Plaza in Binh Chanh District which consists of 600 apartments priced at VND12.5 million-13.5 million per square metre and with an average size of 60sq.m.

Thu Duc Housing Development Joint Stock Co is confident that the medium-priced apartment segment will continue to do well for at least the next 10 years and has begun the Truong Tho apartment project at an average price of VND15.5 million per square metre.

It has sold all 120 units in the first phase and kicked off sale for the second phase on September 24.

Van Phat Hung Joint Stock Co plans to initially offer 110 apartments in its La Casa tower in District 7. It is building a total of 2,000 units there.

Foreign property developers have begun to show interest in the medium-priced segment unlike earlier when they were completely focused on the luxury segment.

An executive at Singapore-owned CapitaLand Co said the company will start building apartments costing less than VND20 million per square metre.

He did not mention a time frame but said it was to diversify the firm's offerings in the Vietnamese market.

Small apartments priced at VND400 million-VND800 million are the most in demand, property brokers said, adding 80 per cent of successful housing transactions are in the medium – and low-cost segment. —VNS

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