Vietnam Seaports Challenging Conditions to 2010

1. Vietnam SeaportsChallenging Conditions to 2010 Tan Hua Joo Vietnam Business Forum – Infrastructure Group/Ports

2. Contents

3. Overview – Vietnam At A Glance (2006) Area: 331,041 sq km (64 provinces & municipalities) Population: 84.4 million Labor force: 44 million Capital: Hanoi (3m) Main Cities: Ho Chi Minh (6m), Dong Nai (2m) Haiphong (1.8m), Danang (0.7m) GDP growth rate: 8.2% GDP: $57.5bn GDP per capita: $724 Exchange Rate : Vietnam Dong VND16,100 :US$1 (2006 Jan) Inflation rate: 6.6% Exports: US$39.6 billion (Growth rate: 22.1% ) Imports: US$44.4 billion (Growth rate: 20.1% ) Foreign Investment: US$10.2 billion WTO member since January 2007

4. Vietnam – Main Commodities Major exports – 2006 (US$m) 1. Crude oil 8,323 2. Garments/textiles 5,802 3. Footwear 3,555 4. Aqua products 3,364 5. Wood products 1,904 6. Electronics 1,770 7. Rice 1,306 8. Rubber 1,273 9. Coffee 1,101 10. Coal           927 Total export value : US$39.6bn (Growth 22.1%) • Major imports – 2006 (US$m) • Machinery/Parts 6,555 • Fuel 5,848 • Fabrics 2,954 • Steel 2,905 • Electronics 2,055 • Footwear/Materials 1,959 • Plastic materials 1,846 • Chemicals 1,026 • Chemical materials 1,001 • Cars/parts 705 • Total import value : US$44.4bn • (Growth 21.1%) Figs in US$bn (Source: General Dept. of Statistics/Ministry of Trade)

5. Key Challenges – Vietnam Seaports • Demand is highest for containerised segment • Strong preference for dedicated container ports compared to mixed-use/multi-purpose ports • Midstream operations declining • Older ports to be phased out • Vessel size limitations • Potential congestion problem 2007-2010 • New deep water ports urgently needed • Significant landside infrastructure investments required

6. Major Container Ports in Vietnam Five major ports in Vietnam now receive container vessels regularly Hochiminh City handles the largest container volume Cai Lan (4%) Haiphong (20%) Total container throughput (2005 Estimates in TEUs): Danang (1%) Quinhon (1%) Containerised volume growth is 19% p.a. from 1995 to 2005 Hochiminh City (72%)

7. Saigon Port Saigon Port Hochiminh City Ports and Infrastructure 5 main ports including midstream operations VICT and Cat Lai Port have dedicated container quayside cranes. Maximum draft 10.5m. North • Cat Lai • VICT ICD Transimex Tan Son Nhat Airport ICD Phuoc Long ICD Tanamexco • Ben Nghe Port • ICD Phuoc Long • (midstream) New Port ICD (Tan Cang) Cat Lai Port VICT Ben Nghe Port • New Port ICD Container Ports Inland Contr Depots Primary Road Secondary Road Ferry • ICD Transimex • ICD Tanamexco

8. Hochiminh City Ports – Key Challanges • Road congestion • Shallow draft conditions • Mixed breakbulk/ container handling • Lack of dedicated container handling crane • Slow and inefficient buoy/ midstream handling

9. Hochiminh City – Container Volume Growth 1995 2007 No of dedicated container ports 0 2 No of mixed-use ports 3 3 No of quayside gantry cranes 0 16 • CAGR 19.1% over last 10 years • Only 2 dedicated container ports • Cat Lai • VICT

10. 2006 Volume Growth • Amongst main HCMC ports that have announced preliminary 2006 container throughputs, • TEU (m) 2006 2005 Growth • Cat Lai Port 1.46 1.09 +34% • VICT 0.45 0.38 +19% • Saigon Port 0.24 0.28 -16% • Ben Nghe Port 0.19 0.16 +17% • HCMC main ports 2.34 1.91 +22% • ICD Phuoc Long (Midstream) operations not available

11. HCMC – High Demand Growth @ 20% Growth per annum

12. Challenging conditions for 2007-2010 HCMC – Potential Shortage

13. Potential Port Shortage

14. HCMC – Port relocation Navigation Channel - 85 Km (46 nautical miles) - 10 knots - 4 hrs navigation time Access channel draft restriction –11m Maximum vessel size ~1500TEU Restrictions on night time navigation for vessel LOA >170-175m Ho Chi Minh City Ports New Port Cat Lai Port Saigon Port Cai Mep – Thi Vai Ports Ben Nghe Port VICT Go Dau Port (planned)) Government plans to relocate the existing ports in the inner city of HCMC to 2 new locations:- 1) Hiep Phuoc - due 2008 2) Cai Mep/Thi Vai - due 2010 Of these only Cai Mep/Thi Vai is able to accommodate larger vessels with draft of -14m Maximum vessel size in 2010 ~ 6,000TEU Baria Serece (Phu My) Port (existing) Hiep Phuoc Port (under construction) Thi Vai Port Complex (under construction) Long An Port (planned)) Cai Mep Port Complex (under construction) Existing Channel Vung Tau Port (planned) Vung Tau Ports

15. New Port Development – Hiep Phuoc Investors : P&O Ports (80%) Tan Thuan IPC (20%) Ground breaking : June 2006 Expected completion : 2008 (1st phase) Total area : 40ha Quay length : 950m Draft : less than 9m (before dredging) Location Total Investment $249m Hiep Phuoc

16. New Port Development – Hiep Phuoc Dredging the Soai Rap Project Name : Rehabilitation of the Soai Rap Access Channel Scope of Works : Dredging of 30km access channel to accept ships to 30,000DWT Estimated Cost : $125m Project completion : 2008-2011 Source : Ministry of Transportation

17. New Port Development – Cai Mep/Thi Vai Investors : Up to 9 potential local & foreign investors Ground breaking : Jan 2006 Expected completion : 2010 (1st phase) Total area : > 300ha Quay length : > 3000m Draft : 14-16m Location Thi Vai Cai Mep CAI MEP – THI VAI INTERNATIONAL PORT COMPLEX

18. Saigon Port - SSA Saigon ICT Phu My General Port Saigon Port - APM Gemadept - Hutchison Saigon Port - PSA Saigon New Port ODA Port Cai Mep – Thi Vai Port Complex

19. 2010 2011 2011 2012 2009 2010 2010 2012 Cai Mep – Thi Vai Port Complex Potentially up to 9 new terminals by 2012-2015 Up to 26 new berths available vs 10 berth currently in operation

20. Cai Mep – Aerial View New Port Cai Mep Container Port Flour Mill LPG Port Site of future container ports: Saigon Port – APM ODA Saigon Port – SSA Upstream Downstream Busan Port Authority JV Gemadept–Hutchison Cai Mep Port To Vung Tau/Open Sea

21. Thi Vai – Aerial View My Xuan A2 General Port Phu My – Thi Vai Port Saigon ICT Co Baria-Serece(Phu My Port) ODA – Breakbulk Port Saigon Port – PSA

22. Cai Mep Container Port – Artistic view Upstream Downstream

23. Thi Vai - Cai Mep Complex – Artistic View Cai Mep International Container Terminal - ODA/Saigon Port – APM/SSA Downstream Tan Cang - Cai Mep Container Port Saigon Port/PSA Container Port Thi Vai – General Cargo Port Upstream

24. Phase 2 – Expected Completion 2010-2012 Phase 1 – Expected Completion 2008 New Port - Cai Mep Container Terminal Saigon New Port expected to be first terminal to start operations

25. 90km HCMC to Cai Mep • 2 lane road • 2 hr travel time • will not be able to cope with container traffic Proposed new highway could cut travel time. Expected completion 2012 Future Port System – HCMC/Dong Nai/Vung Tau

26. Infrastructure – HCMC/Dong Nai/Vung Tau Main landside infrastructure projects 1) Tan Son Nhat–Thu Thiem Elevated Road 5.2km Est cost : $219m Duration : 2007-2010 2) Bien Hoa–Vung Tau highway 72km/4-6 lanes Est cost : $367m Duration : 2008-2012 (1st phase 2010) 3) Saigon–Long Thanh–Dau Day highway 55km/6-8 lanes Est cost : $610m Duration : 2007-2012 4) Nhon Trach Bridge 1.5km/4 lanes Est cost : $77m Duration : 2009-2010 5) Phu My-Rac Chiec Eastern Ring Road 3.2km/8 lanes Est cost : $24m Duration : 2006-2008 6) HCMC Ring Road No 3 91km/6 lanes Est cost : $162m Duration : 2007-2010 7) HCMC Ring Road No 4 113km/6 lanes Est cost : $119m Duration : 2009-2012 8) Ben Luc-Long Thanh highway 100km/4-6 lanes Est cost : $81m Duration : 2007-2010 Proposed Long Thanh Airport

27. Conclusions • Significant potential for growth • Very high demand for modern port facilities • New investments in both ports and landside infrastructure is critical • Port congestion is a real concern especially in Hochiminh City area • Ability for seaports to absorb new volumes is key to Vietnam’s ability to meet growth targets