Vietnam

Vietnam Shows Big Ambitions In Sprawling New Port Project

Haiphong, the third largest Vietnamese city, could become a new Asian transport hub to compete with Hong Kong and Singapore.

The port of Haiphong, set to become one of the main gateways in and out for north Vietnam.
The port of Haiphong, set to become one of the main gateways in and out for north Vietnam.
Michel de Grandi

HAIPHONG — The ship leaves the city of Haiphong behind, headed towards the Red River Delta. The contrast between the two riverbanks is striking. On one side, a never-ending line of boats are waiting to unload at the wharf. On the other, there is nothing but a preserved site. The sea is more than 15 kilometers downstream, and visitors need a lot of imagination to picture what a greatly expanded Haiphong port will look like in 2025.

Today, this sea access is crammed, but a series of projects are expected to transform it into a vast complex equipped with, among other things, a deep water port. Construction began in 2013, and it is scheduled to open in 2016 or early 2017.

The new port, which will be called Lach Huyen Port, will eventually allow ships over 80,000 tons — as opposed to the current 15,000 to 20,000 tons — to stop in Haiphong, some 100 kilometers from the capital Hanoi. The project includes the construction of more 10 kilometers of docks along a channel with a draft up to 14 meters. Financed in part by Japanese funds, the plans also involves building a 9-kilometer bridge, the connection by highway to Hanoi and power plants, sewage treatment plants, etc.

These installations are only a small part of a much bigger development plan to build industrial parks inspired by those created in 1997 in Dinh Vu, which is home to investors such as Knauf, Chevron, Shinetsu and, more recently, Bridgestone.

Fortified by its first successful experience in Dinh Vu, the Belgian company Rent-A-Port has been entrusted with the development of 1,800 hectares (4,448 acres) of these new industrial parks around the deep water port.

The interest in the Red River Delta stems from the fact that the area has 40 million inhabitants and many companies. "We position ourselves where there's a market," explains David Thomas, general manager of the Vietnam-based branch of German company Knauf, which is investing 30 million euros in a new factory.

Multinational corporations like Samsung are turning Vietnam into one of the support bases for their production. For that, the South Korean company was granted significant tax advantages. Still, those are offered "on a case-by-case basis, nothing is automatic," says Nicolas Audier, a French lawyer who has been living in Asia for more than 20 years.

Creating a new hub

Along with its attractive tax deals, Vietnam uses its political and social stability to its advantage, highlighting the cheap cost of labor. The country also wants to offer an alternative to China — a country many Koreans, Japanese and even Europeans are leaving because of skyrocketing production costs.

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Haiphong and the Red River Delta — Photo: NASA World Wind

By developing the new port at Haiphong, Vietnam's third biggest city with an anticipated three million inhabitants by 2025, the authorities wish to dispense with the international hubs of Singapore or Hong Kong for all goods from and towards Europe and the American continent. In theory, this shouldn't be too difficult because major ship owners such as CMA, CGM, MSC or Maersk are already prepared to include this stop in their regular Asian lines.

But that's not all. As the southern part of the country has been enjoying rapid development since the 1990s, the north now wants to make up for lost time, giving birth to the craziest projects. For example, using Haiphong as a gateway for some of southern China's traffic, especially for the Yunnan province. The idea is not entirely without merit because there is already a project to create an economic corridor between Kunming, the capital of Yunnan, and Haiphong. It has financing from several organizations, including the World Bank and the Asian Development Bank.

A first section of 245 kilometers stretching from Hanoi to the border with China already divides the journey's length by two. But although traffic alone is enough to completely justify such construction, the project is nonetheless dependent on the sensitive political relationship between Vietnamese and Chinese authorities.

Last spring's riots, following Beijing's deployment of an oil rig in disputed waters off the Vietnamese coast, quickly turned into anti-China protests. The events are still fresh in everybody's mind, with the apparent exception of the Vietnamese authorities, who are well aware that China remains a top trading partner despite everything.

Regardless of the sometimes chilly relationship between Beijing and Hanoi, the port at Haiphong is set to become one of the main gateways in and out for north Vietnam. A return to its origins in a way. Indeed, when the French created the port in the early 20th century, Haiphong was Tonkin's main port and, more importantly, the favored link between Europe and what was then called the French Indochina.

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