FROM OUR CORRESPONDENTVIETNAM
The limited presence of heavy lift cranes and trailers is one of the major operational
challenges for transporting heavy cargo in Vietnam, according to VN Projects.
John Truong, managing director of VN Projects.
development manager for heavy lift specialist A&L Cargo Services, heavy industry, power generation and the currently depressed oil and gas industry generate the bulk of project cargoes. “The project cargo market has
encountered the downward trend associated with the current global crisis in the oil and energy industry,” Le explained. Producing 340,000 barrels per day, Vietnam
has the second largest crude oil reserves in East Asia after China. The country’s sole refinery at Dung Qat, owned by Qatar Petroleum, opened in 2009. A second refinery at Nghi Son is well behind schedule; further developments in this field have been deferred or cancelled, including the recently scrapped Can Tho plant in the Mekong Delta. Low fossil fuel prices have also prompted
the government to shelve plans for Vietnam’s first nuclea r power plant as cheap oil and coal mean it is no longer economically viable.
Coal-fired plants Instead, new coal-fired power plants will be built to meet the country’s rapidly expanding energy consumption, which has reached 162 billion kWh and is growing at 11 percent per annum. Some 45 GW of new coal-fired power production will be added within the next ten years, shifting coal from 30 percent to 55 percent of the country’s total installed power generation capacity. For A&L’s Le, new thermal power
projects mean a more positive outlook for project logistics is on the horizon. “We estimate that the market will become
better in the year ahead due to the development of wind energy projects and
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thermal power projects to accommodate the growing need of domestic economic growth,” he said. Vietnam plans on generating renewable
energy production of 800 MW by 2020 and 6.6 GW by 2030. As a result, a burgeoning wind energy industry is expected to generate considerable project cargo activity. For example, in November, Irish developer Mainstream Renewable Power announced a USD2 billion deal to develop three wind projects with a combined capacity of approximately 940MW. Le said wind farm projects currently
under development at Trung Nam, Huong Linh and Khai Long are driving demand for imported blades and towers, while large thermal energy projects include Van Phong 1, Duyen Hai 3, and Nam Dinh, he added. Another factor driving Vietnam’s energy
industry is an uptick in steel fabrication outsourcing by engineering, procurement and construction (EPC) contractors in South Korea and Thailand. “The labour cost in Vietnam is more
competitive, plus there has been increasing investment in fabricators by heavy industry players like Metacor and SMV. Raw materials are imported and finished products
We estimate the market will become better in the year ahead due to the development of wind energy projects and thermal power projects. – Henry Le, A&L Cargo Services
such as diverters, dampers and transformers are exported,” said Le. Ho Chi Minh City based Vietnam
Projects Transport (VN Projects) also experienced a downturn, resulting from the weak energy and shipping markets. “The current market conditions are quite
slow due to the crisis in the shipping market. There is not so much cargo coming to Vietnam except some cargoes for thermal power projects which are imported from China and South Korea,” said John Truong, VN Projects’ managing director.
Shore cranes Shore crane capacity is one of the major operational challenges for transporting heavy cargo in Vietnam, according to John Truong. A&L’s Le agreed: “The limited presence of heavy cranes and trailers, and of specialised and professional suppliers such as port stevedores and transport engineers, means the purchasing power is very low as there are not many choices. As a result, the transport cost is very high and cannot be controlled.” Le said poor infrastructure also makes
transport costs extremely high, especially in some rural areas on the border with under-developed Laos and Cambodia. He added that regulations are also
hampering faster project logistics development: “Government regulations are volatile and unsuitable for heavy cargo. On average you need three additional transport licences and five updates every year. It is a long and time-consuming procedure to process documents with the government. It sounds strict, but it is not strict if the right agents are involved.”
January/February 2017
HLPFI 95
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