Work begins on city's first metro

HA NOI — Construction has kicked off on Ha Noi's first light metro line.

The US$1billion line will run from Nhon in Tu Liem District to Ha Noi's Railway Station in Hoan Kiem District. The metro line is the largest public transportation project that the city has ever undertaken.

Prime Minister Nguyen Tan Dung highlighted the project's importance during a speech at the groundbreaking ceremony on Saturday. He said the new metro line would aid the capital city's construction and development, while increasing the city's public transportation capacity and easing traffic congestion in the inner city.

He also urged the municipal authorities to join with relevant agencies to expedite other public transport projects.

The 12.5km Nhon-Ha Noi Railway Station section is part of metro route No3, which will be 20km in length. The pilot is one of five metro lines approved by the Prime Minister as part of the city transportation development plan that will be completed by 2020. Ha Noi would develop three more light metro routes in the future, said Ha Noi People's Committee Chairman Nguyen The Thao.

Thao said upon its completion, the metro line, which is expected to carry 300,000 passengers a day, would improve the city's public transport capacity and ease the heavy traffic congestion in the city's western area.

Unlocking the gridlock

The rapid increase in the number of two-wheeled and four-wheeled vehicles have seriously hampered the city's transportation infrastructure.

Traffic jams are common in the city's inner district, especially in the East-West corridor linking Nhon to the city centre, reports Ha Noi Moi (new Ha Noi) newspaper.

A tunnel boring machine (TBM) will be used to build the line's tunnel, which will mitigate the impacts of the project's construction.

There will be 12 stations along the line. Each four-carriage metro is capable of serving more than 900 passengers and will be able to travel at a maximum speed of 80 km per hour. Total travel time is expected to take about 20 minutes.

The metro line is slated to be operational by late 2015 and will be built with consultancy services from France's Systra - International Consulting Engineers for Rail and Urban Transport. — VNS

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First phase of Ha Noi bridge finished

The first phase of the Vinh Tuy Bridge has been completed in time for the 1,000th anniversary celebrations of Thang Long-Ha Noi. — VNA/VNS Photo Anh Ton

HA NOI — Deputy Prime Minister Hoang Trung Hai inaugurated Vinh Tuy Bridge's first phase yesterday in Ha Noi.

The bridge is set to be the widest bridge in Viet Nam and is one of the major construction projects that is celebrating the 1,000th anniversary of Thang Long-Ha Noi.

Construction of the bridge kicked off in 2005. The bridge is the first major project financed by the municipal People's Committee with VND3.6 trillion (US$185 million) in total investment capital.

Hai said he highly valued the effort put forward by municipal leaders, the Ministry of Transport, the Ministry of Construction and related agencies.

He spoke highly of the contributions made by workers and residents, who have overcome difficulties to build the bridge.

Hai said this was an extremely important project and the bridge was a developmental milestone that would promote the city's industrialisation and modernisation as well as the Hong (Red) River region.

"This is an event that marks the maturity and development of Viet Nam's bridge construction sector," Hai said.

He instructed the capital to begin the second construction phase.

The bridge, which opened for public use last September, is one of seven Hong (Red) River crossings, which will help ease congestion in the capital. It will also reduce traffic flow and contribute to the completion of the city's Ring Road No 2.

The bridge has four lanes for traffic. About 34,000 vehicles now can cross the bridge and approximately 72,000 vehicles per day will be able to use the structure by 2020. — VNS

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Vietnam must address concern dong may slide: IMF

Vietnam must work to address expectations its currency will depreciate further, according to the International Monetary Fund’s representative in the country.

The Southeast Asian nation faces an “embedded expectation of a declining trend in the dong,” Benedict Bingham, the IMF’s senior resident representative in Hanoi, said in prepared comments for a presentation. It was delivered at a seminar in Ho Chi Minh City on Sept. 21 organized by a National Assembly committee, and posted on the IMF’s website this week.

Vietnam’s central bank devalued the dong last month for the third time in the past year, citing the need to curb the trade deficit. Further pressure on the currency “would be negative” for financial stability, Fitch Ratings said in July when it lowered the nation’s debt rating.

The state of the country’s foreign-exchange market has “undermined confidence in the dong” in part because it has “increased transaction costs and uncertainty for Vietnamese businesses,” Bingham said. The currency market has also “impaired Vietnam’s standing among international investors,” he said.

The State Bank of Vietnam weakened the dong’s reference exchange rate by 2 percent on Aug. 18 to 18,932 per dollar. The currency can fluctuate 3 percent on either side of the figure.

Concerns about an overheating economy, the balance of payments and a high inflation rate will probably “keep the currency under stress,” Capital Economics Ltd. analysts said in a research note sent yesterday, predicting an exchange rate of 20,400 per dollar by the end of 2011.

The Vietnamese have shifted from dong to US dollar assets or into gold because of expectations of dong devaluations, the IMF said in a report this month.

Vietnam’s financial system has faced excessive volatility, Bingham said. A lack of transparency has hurt confidence in the country’s macroeconomic management, partly due to a reluctance to adjust the central bank’s benchmark interest rate, he said. The benchmark was left unchanged at 8 percent for the ninth consecutive month in September.

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Vietnam must address concern dong may slide: IMF

Vietnam must work to address expectations its currency will depreciate further, according to the International Monetary Fund’s representative in the country.

The Southeast Asian nation faces an “embedded expectation of a declining trend in the dong,” Benedict Bingham, the IMF’s senior resident representative in Hanoi, said in prepared comments for a presentation. It was delivered at a seminar in Ho Chi Minh City on Sept. 21 organized by a National Assembly committee, and posted on the IMF’s website this week.

Vietnam’s central bank devalued the dong last month for the third time in the past year, citing the need to curb the trade deficit. Further pressure on the currency “would be negative” for financial stability, Fitch Ratings said in July when it lowered the nation’s debt rating.

The state of the country’s foreign-exchange market has “undermined confidence in the dong” in part because it has “increased transaction costs and uncertainty for Vietnamese businesses,” Bingham said. The currency market has also “impaired Vietnam’s standing among international investors,” he said.

The State Bank of Vietnam weakened the dong’s reference exchange rate by 2 percent on Aug. 18 to 18,932 per dollar. The currency can fluctuate 3 percent on either side of the figure.

Concerns about an overheating economy, the balance of payments and a high inflation rate will probably “keep the currency under stress,” Capital Economics Ltd. analysts said in a research note sent yesterday, predicting an exchange rate of 20,400 per dollar by the end of 2011.

The Vietnamese have shifted from dong to US dollar assets or into gold because of expectations of dong devaluations, the IMF said in a report this month.

Vietnam’s financial system has faced excessive volatility, Bingham said. A lack of transparency has hurt confidence in the country’s macroeconomic management, partly due to a reluctance to adjust the central bank’s benchmark interest rate, he said. The benchmark was left unchanged at 8 percent for the ninth consecutive month in September.

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Vietnamese inflation quickened in September to 8.92 pct

Vietnamese inflation accelerated for the first time in six months as food and education costs rose, signaling the government may have less scope to push for lower lending rates to bolster the economy.

Consumer prices climbed 8.92 percent in September from a year earlier, compared with an 8.18 percent advance in August, according to figures released Friday by the General Statistics Office in Hanoi. The reading is the highest since May. Prices rose 1.31 percent in September from the previous month.

Prime Minister Nguyen Tan Dung’s government is targeting a 25 percent expansion in credit this year and 6.5 percent economic growth, even as inflation has held above its 8 percent goal for eight consecutive months. Today’s data may fan concerns that the drive to increase loans and a recent devaluation of the dong conflict with price stability.

The latest inflation figure is “surprisingly high, even though we had expected greater price pressures this month as the effect of the dong’s devaluation kicked in and world commodity prices rose,” Hai Pham, a Singapore-based analyst at Australia & New Zealand Banking Group Ltd., said in a note. “We are concerned about high inflation becoming more entrenched in the coming months.”

The State Bank of Vietnam weakened the dong’s reference exchange rate by 2 percent last month, citing the need to narrow the trade deficit.

‘Weak currency’

The dong traded at 19,490 per dollar at 1 p.m. in Hanoi from 19,099 before the devaluation was announced. The Ho Chi Minh City Stock Exchange’s VN Index fell 0.2 percent today to 449.71, and is down 9.1 percent this year.

“Vietnam’s expansionary fiscal and monetary policy are resulting in a weak currency and high inflation,” said Jonathan Pincus, a Ho Chi Minh City-based economist with the Vietnam Program at the Harvard Kennedy School. “Unless we see evidence of tighter policy, we would expect prices to continue to rise.”

The government has been urging commercial lenders to cut loan rates. The central bank said this month short-term lending rates in dong ranged from 12 percent to 15 percent, and that credit growth reached 16.3 percent in the first eight months of 2010 from the end of last year.

While the government is concerned that high lending rates could affect industrial activity, “premature” monetary loosening may cause a “deterioration” in the trade deficit and boost inflation, the International Monetary Fund said in a report this month.

Overall food prices gained 10.81 percent in September from a year earlier, while costs in a category including rice advanced 14.01 percent, today’s report showed. Education prices jumped 15.56 percent from a year ago, and surged 12.02 percent from August.

“The lofty rise in education” largely reflects an increase in tuition costs as well as back-to-school spending, Matt Hildebrandt, a Singapore-based economist at JPMorgan Chase & Co., said in a note.

Economic growth may reach 6.7 percent this year, exceeding the government’s target, Deputy Minister of Planning and Investment Cao Viet Sinh said on Sept. 17.

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Telecom firms top list of corporate tax payers

Telecom giants MobiFone and Viettel have headed the top ten list of Vietnamese companies with the highest corporate income tax payments from 2007 to 2009, news website VnExpress reported Friday.

MobiFone, run by state-owned Vietnam Posts and Telecommunications Group, paid a total corporate income tax of nearly VND6 trillion over the period, followed by military-run Viettel, the report said.

VnExpress said it was a surprise that the two telecom firms topped the list, instead of large banks or the state oil and gas group PetroVietnam.

“The results show that telecom was the most lucrative sector over the past three years,” the report said, noting that both MobiFone and Viettel posted an average growth rate of 70-80 percent a year despite the economic downturn.

Together the companies in the top ten list paid a combined VND25.8 trillion in taxes. PetroVietnam Gas, Vietcombank and PetroVietnam were other companies making up the top five.

The figures were compiled by Tax Magazine, run by the General Tax Bureau, and VnExpress said they were confirmed by an official of the bureau.

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Telecom firms top list of corporate tax payers

Telecom giants MobiFone and Viettel have headed the top ten list of Vietnamese companies with the highest corporate income tax payments from 2007 to 2009, news website VnExpress reported Friday.

MobiFone, run by state-owned Vietnam Posts and Telecommunications Group, paid a total corporate income tax of nearly VND6 trillion over the period, followed by military-run Viettel, the report said.

VnExpress said it was a surprise that the two telecom firms topped the list, instead of large banks or the state oil and gas group PetroVietnam.

“The results show that telecom was the most lucrative sector over the past three years,” the report said, noting that both MobiFone and Viettel posted an average growth rate of 70-80 percent a year despite the economic downturn.

Together the companies in the top ten list paid a combined VND25.8 trillion in taxes. PetroVietnam Gas, Vietcombank and PetroVietnam were other companies making up the top five.

The figures were compiled by Tax Magazine, run by the General Tax Bureau, and VnExpress said they were confirmed by an official of the bureau.

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