All the three ports SP-PSA, TCCT and SITV have reported the sharp falls in the yield which is much lower than the designed capacity.
“Ports are getting very cheap because they are unable to find customers. The fee for 50-year leasing plus the unused land is VND10,000 per square meter only,said Tuoi, a broker of a real estate trading floor in Tan Thanh district of Ba Ria – Vung Tau. If you want the land with construction works on it, you have to pay VND40,000 per square meter,” said Tuoi.
“If you buy definitely, you just have to pay VND5 billion per hectare. Believe me, it would be a lucrative deal. When the port gets bustling, you would make a fat profit,” he added.
When the reporters said they wanted to lease a large land area to develop a port, Tuoi warned them that there are too many ports in the locality already, while very few ships dock at the ports.
A report of the Vietnam Seaport Association showed that in 2012, the 7 international container ports in the Cai Mep – Thi Vai deep water port complex area ran at 15-20 percent of the designed capacity only.
Since 2007, a lot of investors flocked there to pour money into deep water ports with the estimated total investment capital of $2 billion. The ports include SP-PSA, CMIT, SSIT, Gemalink, TCCT, TCIT, SITV and the Cai Mep container international port.
The “port investment movement” has triggered a new competition among the deep water port developers who have been trying to slash the port service fees. According to the Vietnam Seaport Association, the service fees at the ports is now just $32 per container on average, while port developers need to charge $88 per container to break even. Especially, some service providers now charge $23 only per container.
Both CMIT and SP-PSA, the joint ventures between the Saigon Port and foreign partners have reportedly taken loss. According to the Vietnam National Shipping Lines (Vinalines), by the end of December 2011, SP-PSA and CMIT had incurred the loss of VND460 billion.
“With the current low service fees, SP-PSA and CMIT would still incur loss,” said Nguyen Xuan Ky, Deputy General Director of CMIT.
An expert has warned that if the current situation cannot be improved, the material facilities and infrastructure items at the ports would degrade rapidly. “I am afraid that the port system would be damaged one day,” he said.
The ports’ developers said they have applied some temporary measures to “survive the difficulties.”
Cao Xuan Dung, Deputy Director of TCCT, said since August 2012, TCCT has accepted bulk cargo, general cargo, farm produce and steel as well. Prior to that, since late 2011, SITV and SP-PSA also shifted to receive bulk cargo and serve tourism cruises as well.
As for Gemalink, which is the $345 million joint venture of Vietnamese Gemadept, South Korean Samwha and French CMA-CGM, the company’s shareholders’ meeting in 2012 decided to slow down the investment process until the national economy recovers.
Experts have suggested removing the port system in HCM City out of the inner area to avoid traffic jam, and to use the golden land areas to develop commerce and residential quarters.