Vietnam Airlines cancels 30 flights due to downpours

HCMC – Vietnam Airlines on Monday said that torrential rains in central Vietnam in the past days had forced it to cancel at least 30 flights to Vinh and Chu Lai, but it pledged more flights than usual soon to transport stranded passengers.

The national flag air carrier aborted 28 services to and from Vinh City and two from and to Chu Lai in Quang Nam Province from October 15 to 18. Meanwhile, Jetstar Pacific said it had to divert two flights from Tan Son Nhat Airport to Noi Bai Airport instead of landing in Vinh on October 17 and 18.

Vietnam Airlines conducted two flights from Vinh to HCMC on Monday, using Airbus A321, and plans four services out of its normal schedule between the central city and HCMC on Tuesday.

The carrier plans to resume six daily flights between HCMC and Vinh and two daily services between Hanoi and Vinh as usual from Tuesday. Vietnam Airlines said it had prepared for Typhoon Megi, which is forecast to reach the Eastern Sea on Tuesday afternoon and may affect the flights bound for central Vietnam.

The carrier called for passengers to check the latest information about its flights to the region on its website at www.vietnamairlines.com and booking offices.

Jetstar Pacific told the Daily that it was keeping itself abreast of developments of Super Storm Megi in order to have proper plans to operate its flights to central Vietnam and mitigate impact on passengers.

Vietnam’s civil aviation regulations clarify flight cancellations due to storms are unavoidable so airlines do not have to pay compensation for affected passengers. Airlines often help passengers travel by road to their planned destinations if they have to divert their planes to a new destination because of bad weather.

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Deposit rates inch down to reluctant 11%

A customer scrutinizes deposit rates offered by Vietnam Asia Commercial Bank. Deposit rates are now at the same level of 11% for terms from one to 36 months - Photo: Thuy Trieu

HCMC – Almost all commercial banks have complied with a pledge made earlier to reduce their deposit rates, but signs of reluctance are seen in the new move when lenders quote the same rate of 11% for deposits of all terms.

Since late last week, banks have cut their rates for Vietnam dong deposits to a maximum of 11% per year for terms starting from one month instead of the previous level of 11.2% under their commitments with the Vietnam Banks Association.

Some big banks such as Asia Commercial Bank, Vietnam Export Import Commercial Bank and Vietcombank have revised their deposit rates for Vietnam dong with the highest rate standing at 11% per year.

On Monday, many other banks also followed suit.

The new common rate is believed to put smaller banks at a disadvantage in competition with larger institutions. Furthermore, operating costs will also be higher as banks may attract short-term funds only when offering the same interest rate.

That means banks will have to rely on promotions to lure depositors.

At Vietnam Asia Commercial Bank, those who deposit at least VND20 million for six, nine, or 12 months can enjoy a lot of incentives such as added rate for depositors older than 50 years, bonus cash depending on the deposit value, and vouchers to buy goods.

Therefore, depositors now do not need to compare interest rates offered by different banks but will look at available promotion programs.

However, lower borrowing rates will make it possible for banks to cut lending rates as well, a move sought by the Government and the central bank.

Dam The Thai, deputy general director of HDBank, said that if all banks agree to lower deposit rates, the capital cost will fall, offering lenders a chance to cut their lending rates.

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Honda replaces faulty part for 2,154 scooters

Honda LEAD scooters at a product launch in Vietnam in a file photo - Photo: Quoc Hung

HCMC - Honda Vietnam Co., the leading motorcycle maker in Vietnam, will replace a faulty fuel tank part for 2,154 LEAD scooters though it has yet to receive any complaint from customers.

According to a Honda internal test, the defect with a fuel tank bolt does not threaten the motorcycle safety and operation but the company has decided to replace the bolt.

Honda Vietnam said this error affects one lot only.

The replacement is applicable to the LEAD motorcycles with frame numbers between RLHJF240 AY 038651 and RLHJF240 AY 041170 for white stripe and between RLHJF240 AY 715610 and RLHJF240 AY 716800 for gold stripe.

Replacement work is done at HEAD agencies at no cost until the end of this month. HEADs will contact customers by phone and letter.

The company launched the LEAD in late 2008, which is similar in design to the Honda SCR scooter made in China.

The 108cc scooter is manufactured at the company’s second plant in the northern province of Vinh Phuc and hit the market in early January 2009.

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ADB finds dollars dull SE Asian financial controls

Vietnam has made progress in dealing with dollarization but more efforts are needed to enhance confidence in the local currency, the Asian Development Bank said in a statement last week.

The Manila-based bank just published a study about the economic impact of having multiple currencies circulate in Vietnam, Laos and Cambodia. In these countries, the bank found, foreign currencies are widely used, particularly the US dollar.

“The share of foreign currencies ranges from around 20 percent of all currency in circulation in Vietnam, about 50 percent in Lao PDR, and more than 90 percent in Cambodia,” the bank said.

ADB said that, aside from certain benefits, the use of multiple currencies reduces economic authorities’ control over monetary and exchange rate policies.

“Dollarization blunts the tools for macroeconomic stabilization, especially monetary and exchange rate policy, that a country like Vietnam needs in order to tackle a variety of economic and developmental challenges, such as rising inflation,” said Jayant Menon, Principal Economist in ADB’s Office of Regional Economic Integration.

“Vietnam has made good progress in de-dollarization,” says Ayumi Konishi, ADB Country Director. “Yet, authorities, especially the State Bank of Vietnam, are fully aware that administrative measures alone cannot be effective… it is essential to enhance people’s confidence in Vietnamese dong through sustainable and high economic growth, stabilization of the foreign exchange rate, reforms in monetary policies, and strengthening of the capacity of financial institutions.”

The study also suggested that “sharing information and experiences would help the monetary authorities of Cambodia, Lao PDR, and Vietnam to find a solution to the dollarization issue.” The three countries have a lot to gain from closer cooperation, it added.

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Dung Quat refinery faces year-end surplus

PetroVietnam, the nation's state-owned oil and gas group, has said that its Dung Quat refinery will face a surplus of around 157,200 cubic meters this year even if local fuel traders try their best to purchase its products.

Petrolimex, a subsidiary of PetroVietnam that owns more than a 50 percent share of the domestic fuel market, plans to buy 273,100 cubic meters this month and at least another 407,300 cubic meters in the next two months, VnExpress reported Monday.

Other traders, including PV Oil, Petec and the jet fuel firm Vinapco, also announced plans to purchase Dung Quat’s products.

PetroVietnam said that, by the end of December, fuel companies will not be able to use up all of their inventory.

On October 4, the group announced that Dung Quat, Vietnam’s first oil refinery, had 750,000 tons of oil and gasoline products in stock and not enough space to store them.

The plant has been running at full capacity, or 30 percent higher than the plan for this year.

The Ministry of Industry and Trade has ordered PetroVietnam to balance supply and demand in the domestic market next year.

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Access to bank loans seen easier for SMEs

HCMC – The biggest concern raised by almost all enterprises at a seminar on capital for small and medium enterprises (SME) last week is difficult access to loans at commercial banks but the situation is expected to improve in the near future.

A business executive said at the seminar that commercial banks should keep their promises. He had joined a lot of similar seminars where banks promised to support SMEs, but after that he got disappointed when no bank approved his borrowing application, he said.

Nguyen Xuan Lam, director of L.V. Company, which produces auto parts, said his SME falls under the category of having priority access to bank loans in line with Government policy as his enterprise exports all output and operates in the hi-tech industry. However, no bank has lent to his business, causing its loss of contracts, he noted.

“In the past big foreign customers expressed interest in placing orders with us but we could not secure them because our facilities do not meet their requirements,” Lam said. His enterprise is borrowing capital from ACB, he said, and it needs long-term capital to build a factory.

The two are among the many businesses that have found it impossible to take out bank loans due to high interest rates and hindrances along the way.

Do Lam Dien, deputy head of corporate clients at Maritime Bank, said there existed many obstacles to SMEs’ access to bank loans, such as lack of mortgages, banks’ unwillingness to lend to SMEs, problematic tax payment reports, unsound business plans, and high lending rates.

However, the situation is seen changing for the better in the coming time. Commercial banks, seeking to boost lending, have begun to see SMEs as a potential market, and mapped out plans to tap those corporate customers.

Banks, including foreign ones, have set up a department in charge of SMEs, and most of them said SMEs are their potential clients.

Many programs targeting this segment have come out. For example, An Binh Bank has combined with IFC to support SMEs, and HDBank has earmarked VND2 trillion for financing enterprises in the coffee sector.

Nguyen Dinh Tung, deputy general director of Maritime Bank, said the bank had gauged demand of local SMEs over the past two years to work out a qualitative model to assess corporate clients, instead of the quantitative model that used to be applied.

“We will learn about SMEs as clients by accessing and interviewing them,” Tung said at the seminar.

According to the HCMC Institute for Development Studies, Vietnam now has 500,000 enterprises of which SMEs account for 97%. SMEs are responsible for about 30% of GDP, 30% of industrial output value, nearly 80% of total retail sales, and 64% of total goods transport volume every year.

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City explores new routes for river tourism

HCMC – The HCMC tourism authority will survey a new tourist route upstream the Saigon River to the neighboring province of Dong Nai early next month as the city government on Monday gave approval, an official said.

Nguyen Viet Anh, head of the Travel Division of the city’s Department of Culture, Sports, and Tourism said the city’s vice chairwoman, Nguyen Thi Hong, had allowed the department to undertake the survey following a meeting on Monday about a plan to explore some river tourist routes to develop this kind of tourism for the city.

Officials at Monday’s meeting also discussed the possibility of opening another river tour linking the city’s center, neighboring Binh Duong Province, and Cu Chi District in the city’s outskirts.

A report prepared by the tourism department after a survey in July shows that this medium-length river tour is of high potential owing to the beautiful scenery and attractions along the route.

The route should start from Bach Dang Wharf, take in Thanh Da-Binh Quoi and then Binh Duong Province’s craft villages before ending in the historical Cu Chi Tunnels.

But at Monday’s meeting, some expressed concern that this tourist route could hardly be launched later this year as had been expected due to the lack of required infrastructure facilities.

La Quoc Khanh, deputy director of the tourism department, told the meeting that there were not enough berths along the route for boats to anchor, let alone the mobilization of other transport means along the route to cater to tourists.

Khanh also complained that several bridges along the route had a low vertical clearance, preventing bigger boats from navigating underneath.

So far, the tourism department and some tour operators have surveyed a short route from Bach Dang Wharf in District 1 to District 7. “We will launch this tourism product by the year-end or early next year,” Anh of the city’s tourism department said.

The city is pining high hopes on river tourism as strong potential of the industry, which once brought into play will also help linking attractions in the city with those in other provinces.

The city government has asked the tourism authority to draft an action plan this year to develop a river tour taking tourists from HCMC to attractions in the city and to other places such as the Mekong Delta province of An Giang and Cambodia.

At Monday’s meeting, vice chairwoman Hong also agreed in principle to assign Saigontourist Holding Company to build a tourist wharf in District 1. Earlier, Hong also gave the company the go-ahead to build a tourism wharf in Nha Be District.

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