Current background

Maritime industry is an economic sector of high specificity and deep international integration. In recent years, the maritime infrastructure, especially the seaport infrastructure, has played a very important role in meeting the country's economic development needs and creating a driving force for stronger foreign economic activities and international integration.

Located in major economic centers, seaports serve freight import and export and create a driving force for regional development, for example Quang Ninh and Hai Phong seaports with the northern key economic region; Thua Thien Hue, Da Nang, Dung Quat and Quy Nhon seaports with the central key economic region; Ho Chi Minh City, Ba Ria - Vung Tau and Dong Nai seaports with the Southeast dynamic economic region; and Can Tho and An Giang seaports with the Mekong Delta key economic region. Some seaports have been built with the modern international class like Ba Ria - Vung Tau and Hai Phong seaports. These ports act as international gateways and transshipment terminals. In 2020, Vietnam's seaport throughput was 692.2 million metric tons (about 8.4 times higher than that in 2000) and 1.7% higher than the forecast for the year (640-680 million tons according to Decision 1037/QD-TTg dated June 24, 2014 of the Prime Minister). Every year, Vietnam's seaports clear all imports and exports by sea, accounting for over 90% of the country's total import and export volume. Ports play an important role in circulating and exchanging goods and creating momentum for economic development.

From its open investment policies, over the past time, Vietnam has attracted many professional port operators and major shipping lines in the world to build and operate seaports in Vietnam. For example, DP World Group of the UAE invests and operates Saigon Premier Container Terminal (SPCT) - Ho Chi Minh City; SSA Marine Corporation of the U.S. with Cai Lan International Container Terminal (CICT) in Quang Ninh and SP-SSA International Terminal (SSIT) in Ba Ria - Vung Tau; PSA Group of Singapore with SP-PSA Terminal in Ba Ria - Vung Tau; APMT Group of Denmark with Cai Mep International Terminal (CMIT) in Ba Ria - Vung Tau; Hutchison Port Holding Group of Hong Kong with SITV Terminal in Ba Ria - Vung Tau; Mitsui O.S.K line of Japan and Wanhai Lines of Taiwan with Tan Cang Cai Mep International Container Terminal; and MOL and NYK with Lach Huyen Terminal. Global professional port operators, shipping lines and some domestic port operators such as Saigon Newport Corporation have provided the best seaport services and improved the service quality and competitiveness of Vietnam's seaports.

Better seaport services and rising shipping demands have attracted large shipping lines to open routes from Vietnam to other countries in the world. Lach Huyen Wharf is capable of accommodating vessels of up to 132,000 DWT and Cai Mep Thi Vai Wharf, 214,000 DWT or over 18,000 TEUs. Every week, nearly 40 vessels depart from Cai Mep - Thi Vai Terminal, including 18 to Europe and America, and 10 to Asia, gradually making Vietnam an important link in the global maritime chain.

Advantages and disadvantages of seaport operation

Since opening for international economic integration, Vietnam has entered into many international political-economic forums (ASEAN in 1995, ASEM in 1996, APEC in 1998, WTO in 2007, CPTPP in 2018 and EVFTA in 2020) and its position has been increasingly enhanced. In addition to international integration, Vietnam's import and export value has also continuously grown. Its import and export value was only US$13.6 billion in 1995 but jumped to US$668.5 billion in 2021. Furthermore, cargo throughput at Vietnamese seaports has also continuously increased, from 34 million tons in 1995 to 706 million tons in 2021, nearly 21 times or an annual growth of 12.4% in the period. Boosted by integration efforts, the maritime industry, including the port economy, has played a huge role in both boosting economic development and creating momentum for investment attraction to grow the sea- and port-linked economy.

As an economic locomotive of very high internationalization, acting as transport infrastructure and as an economic infrastructure and international border gates, seaports have shown their obvious advantages in the process of development and operation.

Firstly, the seaport economy is one of the focuses of the maritime sector and a high concern of the government. Vietnam Maritime Law, enacted for the first time in 2005 and revised in 2015 by the National Assembly, is a very important milestone as a basis for the formulation of specific policies on the development of maritime industry in general and seaports in particular and the expansion of maritime cooperation with countries around the world.

Particularly, being adjacent to the world's leading international maritime routes in the East Sea, Vietnam has a long coastline with many locations favorable for the construction of seaports to serve economic development. Besides, with the open-door policy, Vietnam has strongly attracted a lot of investment funds for economic development, with the export-driven economy being increasingly expanded. At the same time, the accession and signing of transport agreements with countries around the world have boosted trade, resulting in a continuous increase in cargo volume via Vietnam's seaports.

In addition, the government has paid attention to and directed seaport development according to approved plans in the past 20 years. This is the basis for drawing investment resources (mainly non-government budgets) for seaport infrastructure development.

Besides achievements, seaport infrastructure development still has shortcomings and challenges. Being a highly internationalized economic sector, impacts of the international economy and maritime industry also knock Vietnam's seaport operations, especially in the context of wars, epidemics and trade tensions among major economies. Moreover, the plan forecasting capacity remains weak, leading to frequently revised planning.

In seaport investment, the subdivision of planned port functional areas, based on investors’ capacity, has fragmented port development, restricted the working capacity of shore roads and port spaces for development and caused local competition among ports in the same area.

Except for a few newly built ones, most ports are built deep in the mainland where passageways to ports are limited and urban transport systems are facing enormous challenges, thus diminishing the quality of transport services and seaport operations. Traffic connectivity to ports is weak in some locations and major modes of transport such as railways and highways to ports are still inadequate to stimulate investment in port operations.

Notably, the need for investment capital for maritime infrastructure development is huge while the budget is limited, especially for important projects.

The development potential of Vietnam's seaport system is linked to the upcoming seaport system planning to meet international integration requirements

On September 22, 2021, the Prime Minister approved the Master Plan on Vietnam Seaport System Development in 2021-2030, with a vision to 2050, with remarkable contents as follows:

The master plan defines seaports as an important component of maritime infrastructure, socioeconomic infrastructure, and one of three strategic breakthroughs according to the Resolution of the 13th National Party Congress. There is a need for synchronous and modern development investment to support large-volume cargo transportation.

The plan emphasizes applying achievements of the Fourth Industrial Revolution in the construction, management and operation of green seaports, conserving energy, and effectively using natural resources of coastline and water surface.

With the achievements of seaport development in the past 20 years, it is important to give priority to international gateway seaports and large-scale seaports to serve national and inter-regional socioeconomic development; develop international passenger ports with tourism-motivating development regions and large-scale ports to serve economic and industrial zones; and island ports to serve socioeconomic development with national defense, security and territorial sovereignty of the sea and islands.

The seaport capacity is expected to reach 1,140-1,420 million tons by 2030 (1.64-2 times higher than the seaport throughput in 2020), of which container cargo throughput is 38-47 million TEUs (1.7-2 times higher in 2020).

Regarding development priority areas: (1) On public maritime infrastructure: Investing to upgrade Cai Mep - Thi Vai Terminal to accommodate vessels of up to 200,000 tons (18,000 TEUs); dredging channels and passageways for ships of 20,000 tons into Hau River; upgrading channels into Nghi Son Port, installing sea-lights on islands and archipelagos under Vietnam's sovereignty, infrastructure for maritime safety. (2) On port infrastructure: Investing in new berths in Lach Huyen Terminal, ​​Nam Do Son Terminal (Hai Phong), Cai Mep - Thi Vai Terminal (Ba Ria - Vung Tau), main first-class seaports, international passenger terminals, large-scale ports dedicated to serve coal, gas, petroleum, metallurgical and power centers; ports for coastal economic zones, and potential Van Phong and Tran De seaports.

Resources for seaport development are mainly mobilized from the private sector, accounting for 95% of the total VND313 trillion of seaport investment capital needs. State budget capital is concentrated on public infrastructure and key areas to create ripple effects on investment attraction.