3.4 Viet Nam Port Policy Gaps
3.4.2 Discussion of gap in port governance
From above discussion, we can say that Viet Nam port system have been planned and developed for six geographical groups to support the development of major Special Economic Zones, such as Red River Delta in North Viet Nam, Ho Chi Minh City, Ba Ria Vung Tau and Mekong River Delta.
But, we find that there is a big gap in port efficiency among groups. In particular, SNP dominates the market, and the south group enjoys better productivity: but other ports as well as groups have less productivity against SNP and the south group (see Fig. 3.6 and 3.7). And then, until now there has been no unified body in charge of planning, investment and expansion for each port group individually.
In order to make it easier to understand, we illustrate the hierarchy of Viet Nam port policy decision making process in Fig.3.8. The Prime Minister and ministries set the long term strategies and target achievement for port system/regions, and the belonged port/terminal directors plan and implement short-term business plans in accordance with long-term ones. In this case, we chose two major port operators, Sai Gon New Port (Tan Cang) and Vinalines Holding Company (Vinalines), as examples.
Both are state-owned companies, but under control of different ministries, Ministry of Defense and Ministry of Transport respectively. These two operators are in charge of major ports in all six port groups, but their market shares seems to be overlapping in the same market area (see Fig. 3.7).The consequence of the gap in governing body is the port regional conflict which was mentioned by Duong and Ly (2010). Ports in the same group, but not under one governing body severely compete each other in the “port tariff war” in Cai Mep-Thi Vai Area. Currently, port operators in group 5 suffer heavy loss from reducing the Terminal Handling Charge (THC) for shipping lines (VPA, 2013).
43 Figure 3.7 Illustration of Ports owned/ controlled by Vinalines and Tan Cang
Source: composed by authors, with reference to Vinalines and Tan Cang websites (2014) (http://vinalines.com.vn/vi/partner-category/cong-ty-me-tong-cong-ty/;
https://saigonnewport.com.vn/co-so-logistics/pages/snp-logistics.aspx)
Figure 3.8 Hierarchy of Viet Nam Port Policy Decision Making Source: composed by authors, with reference to port policy documents
From the beginning, the major concern over Viet Nam port system development is modernizing the port infrastructure and facilities. But, our analysis shows that the HHI and Gini co-efficient do not decrease even if more ports are built and more facilities are equipped over time (see Table 3.2). The highly concentrated situation of port system in Viet Nam has not changed since 1995. What is worth- mentioning is that only a few ports (i.e. SNP, Hai Phong port) benefit from this situation (see Fig. 3.8).
Until now, most efforts from Viet Nam government focus on improving the port facilities or “hard infrastructure”, but the weakness of management system - we say, “soft infrastructure”,- has not been highly concerned. We think that the current port management system, in which different ministries with equal power status gain control over ports, needs to be changed. The master plans of development for Viet Nam port groups can only show their effect if the government centralize the control over individual ports of each group into a unified organization. When this systematic dilemma is eliminated, each port group will have more chances to attract cargoes from/to their hinterland area. Individual
Constitution –Code - Resolution of the
Party National Assembly
Ordinance- Decree- Decision on National/
Regional Port Master Plan Prime Minister
Development Strategy for Vinalines Port System
Ministry of Transport
Vinalines-owned Terminas'
strategy Port Director
Joint Venture Terminals'
strategy Port Director
Development Strategy for Tan Cang Port
System Ministry of Defense
TanCang-owned Terminals' Strategy
Port Director
Joint Venture Terminals' strategy
Port Director 5 Year Socio-
Economic Plan National Assembly
44 terminals along rivers can cooperate to share and utilize the facilities. The port conflicts regarding port tariff, port expansion, port congestion can be solved. And Viet Nam ports will be more competitive on the roadmap towards an integrated and competitive maritime transport in ASEAN Economic Community 2015.
3.5 Concluding remarks of this chapter
In this chapter, we reviewed Viet Nam Port Policy with reference to the historical events since 1945, and explained achievements in economy through Doi Moi Policy in 1986. Our main findings are as follows:
1) Port system are scattered along the 3.300 km length of coastline, but the port traffic flows are concentrated into the North and South.
2) The port master plans contain a big difference between the development targets and actual achievements. This is a result of weaknesses in future market demand forecast and the maritime/ port market analysis.
3) In the port governing structure, there is a lack of an organization in charge of port groups individually. In fact, different ministries are controlling ports in various groups, thus, this result in disproportion in the port future development plans. We believe that each port group should establish their own governing body, namely “Port Authority”, who is in charge of port planning, investment and construction for the whole area.
As we know, Viet Nam is a rising economic country in ASEAN, but the inefficient port management system can bring negative effect on Viet Nam’s economy. In particular, issue 3) may be a crucial point for improving the port management system. Confused structure is not desirable for effective management, but due to too much complicated situation, fixing this confused structure is a very challenging matter.
Our research mentions just policy-oriented matters, and then we do not try to measure the inefficiency from a statistical point of view. In the future, we try to analyze the efficiency due to the systematic conflict.
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