E- /Ap. INEDECOQ Netherlands Engineering Consultants. Vio. 3 INLAND WATERWAYS AND PORT MODERNIZATION PROJECT

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1 Public Disclosure Authorized VIETNAM INLAND WATERWAY INTERNATIONAL BANK FOR DEPARTMENT / PMU-SW RECONSTRUCTION AND DEVELOPMENT E- /Ap Vio. 3 Public Disclosure Authorized INLAND WATERWAYS AND PORT MODERNIZATION PROJECT REHABILITATION AND MODERNIZATION OF THE PORT OF CAN THO Public Disclosure Authorized FINAL REPORT JUNE 1996 Public Disclosure Authorized INEDECOQ Netherlands Engineering Consultants

2 LIST OF REPORTS VOLUME I : EXECUTIVE SUMMARY VOLUME II : INLAND WATERWAYS IMPROVEMENT PROJECT (Main Report) Annex II - 1 Design Report Annex II - 2: Navigation Aids Annex il - 3: Soil Report VOLUME III RESETTLEMENT ACTION PLAN VOLUME IV : ENVIRONMENTAL IMPACT ASSESSMENT & ENVIRONMENTAL MANAGEMENT PLAN VOLUME V : TOPOGRAPHIC MAPS (scale 1:5000) Book 1: Ho Chi Minh City - Cho Gao Cho Gao - Sa Dec Book 2: Sa Dec - Lap Vo Rach Gia - Ha Tien Rach Soi - Ha Giang Book 3: Cho Lach - Mang Thit Can Tho - Ca Mau (PI/O to PI/l 3) (PIl/OtoPIV/21) (PIIl/Oto PIIl/14) (PIV/O to PIV/1 9) (PIV/20 to PIV32) (PV/O to PV/20) (PVI/O to VI/38)

3 CONTENTS 1. INTRODUCTION 1 A. Study Organisation 1 B. The Terms of Reference 2 2. THE EXISTING PORT 3 A. Fixed Facilities 3 B. Equipment 7 C. Management 9 D. Manning 10 E. Access to the Port PORT TRAFFIC 14 A. Historical Traffic 14 B. Port Traffic in the South of Vietnam 18 C. Present Cargo Trends 25 D. Forecast of future cargo volumes CARGO HANDLING 42 A. Present Practice 42 B. Improvements 44 C. Equipment Requirements BERTH OCCUPANCY 48 A. The Main Berth 48 B. The Mooring Buoys FUTURE DEVELOPMENT 49 A. Fixed Facilities 49 B. Equipment 49 C. Environmental Impacts ECONOMIC ANALYSIS 53 A. Background 53 B. The With the Project Case 53 C. The Without the Project Case 54 D. Calculation of Economic Return 55 E. Sensitivity Analysis THE FINANCIAL FUTURE OF THE PORT CONCLUSIONS 61 June 1996/5K 9012.C /R005/SPE/tb

4 LIST OF TABLES Table 2.01 Floating plant - Port of Can Tho 7 Table 2.02 Cargo handling equipment 7 Table 2.03 Other Equipment 8 Table 2.04 Permanent Staff 10 Table 3.01 Can Tho Port ThroughDuts 14 Table 3.02 Can Tho Port - Container Traffic Table 3.03 The current freight for sea transport on domestic routes 23 Table 3.04 International shipping costs from South Vietnam 24 Table 3.05 Gross output of food (paddy equivalent) by provinces 25 Table 3.06 Gross output of food (paddy equivalent) per capita by provinces 26 Table 3.07 Computed data of essential goods for production and living 26 Table 3.08 Export of rice Sout Vietnam, Table 3.09 Number of ships entering and leaving Saigon Port Table 3.10 Cargo throughputs at Saigon Port (Unit: ton) 28 Table 3.11 The first priority investment projects of industry and agriculture dev. in Cantho 31 Table Table 3.13 Paddy demand and projections for Mekong Delta 32 Table 3.14 Forecast of surpluses of rice 32 Table 3.15 Volume of rice for export handled at ports 33 Table 3.16 Demand of phosphate 33 Table 3.17 Demand of Ure 33 Table 3.19 Total volume of Ure transported to the Southern Delta 34 Table 3.20 Scenarios for importing DAP 34 Table 3.21 Cargo throughputs at Cantho port 36 Table 3.22 Cargo throughputs at Cantho port 37 Table 3.23 Cargo throughputs at Cantho port 37 Table 3.24 Port of Can Tho 39 Table 3.25 Trade Projections 41 Table 4.01 Port of Can Tho Rice Export Handling Rates Table 7.01 Handling Rates with Reduces Cranage 54 Table 7.02 Economic Analysis of Can Tho Port Improvements 56 Table 7.03 Sensitivity Analysis 58 LIST OF FIGURES Figure 2.1 Lay-out Can Tho Port LIST OF APPENDICES Appendix 1 Berth Occupancy Calculations Appendix 2 Port Dues and Charges Projections of Income P & L Statements Balance sheets Asset Valuation

5 EXECUTIVE SUMMARY The Nature of the Study This study was commissioned to produce a set of cargo forecasts and to assess whether the throughput of the Port of Can Tho could be increased to handle the predicted cargo over a reasonable time span. The parameters of the study were set so as to exclude the effect of any future deepening of the Dinh An Channel at the mouth of the Bassac River and to not include the option of building extensive new fixed facilities. The study was carried out by staff from NEDECO and the PMU assisted by some input from TESI South. The Present Situation The Port of Can Tho is at present a port which is performing at a fraction of its capacity. This appears to be mainly because the port has not managed to break the shipping community's long established practice of servicing the Mekong Delta through the ports of Ho Chi Minh City. This is partly because many shippers have established facilities in HCMC but also it is because the true level of service and facilities at Can Tho have never really been brought to the shippers' attention. The apparent state of dilapidation of parts of the port does not help its marketing effort. The Findings of the Study The study concluded that the traffic through the Port of Can Tho was likely to grow very quickly to reach approximately 500,000 Tonnes per year by the year The port at present handles only one quarter of this trade but its throughput has doubled in the last year. In reality, the port can handle almost 4 times its 1994 throughput (or twice its 1995 traffic) with its present equipment and some adjustments to the shift patterns. With the addition of a US$ 1.8 million investment split between remedial works to the existing structures, some handling equipment and some training, the port should be able to handle its likely cargo throughput up to the year 2000 or At that point a further investment of US$ 0.8 million in handling equipment will be needed. This expenditure leaves the port financially viable and it shows economic rates of return in excess of 30%. Shortly after the year 2000, the port will need additional quay space if it is attracting cargo in line with the projections. At present there are plans to build two other separate international ports within an 8 km radius of the Port of Can Tho. If this happens it is extremely unlikely that any of them will be successful so it is important that a single site is selected for development.

6 1 1. INTRODUCTION TO THE STUDY A. Study Organisation 1.01 The Mekong Delta Master Plan Study, completed in 1993, identified the possibility of developing the Port of Can Tho to become an international port carrying a substantial part of the cargo exported from the Delta to other parts of Vietnam and to foreign destinations. The benefits of this were seen to be reduction in transport costs, greater wealth generation within the Delta and a reduction of pressure on the infrastructure of Ho Chi Minh City and its surroundings The study forms part of the Inland Waterways and Port Modernisation Project which is funded by a grant from the Japanese Government and administered by the World Bank. The study started in September 1995 and is to be completed in March The object of the study is to define the expenditure which is required to help the Port of Can Tho boost its traffic from the present low levels to a substantial proportion of the goods entering and leaving the Delta. The planned expenditure will form phase 1 of the project with phase 2 being undertaken once the proposed study of the Bassac river entrance (the Dinh An channel) has been completed The original Terms of Reference for the appointment of Consultants for this project were written in terms of the work being carried out by the Project Management Unit of the Southern Waterways (PMU) and the Transport Economic Science Centre in the South (TESI) with the Consultants providing technical assistance and advice Following the World Bank visit to Ho Chi Minh City in late September 1995, the structure of the project was changed such that the project is to be carried out by the Project Management Unit working with the team from NEDECO. TESI are to be contracted by the Project Management Unit to carry out specific tasks on the project The main work for the study was under taken by the following staff.- Richard Clarke - Port planner, engineer and operations specialist, NEDECO. Alexander Mueller - Financial and economic analyst, NEDECO. Tran Doan Phi An - Transport Economist, Transport and Economic Science Centre in the South (TESI). Richard Clarke and Alexander Mueller each made two visits to Vietnam under the project, the first being in September/October 1995 and the second in January/February The majority of TESI's work was done between these two visits An Inception Report for the study was written in October 1995 and it was published as part of the Inland Waterways and Port Modernization Project Phase 1 Report.

7 2 B. The Terms of Reference 1.07 The full Terms of Reference (TOR) for the study are set out in Appendix I. Below are summarised the major points from the TOR:- - Assume that the Dinh An channel remains as at present; - No Major Expansion of Existing Wharves; - Produce traffic Forecasts for years 2000 and 2015; - Survey existing facilities and equipment; - Examine port operations, management practices, accountancy procedures; - Propose improvements to facilities, equipment, operations, management and training; - Evaluate environmental impact of proposed measures; - Economic evaluation of the proposed measures; - Financial evaluation of the proposed measures Although the Terms of reference were written very much in terms of an engineering study, the situation on the ground turned out to be a port which was basically in sound condition but which was under performing because it failed to attract cargo. Part of the study resources were therefore used to investigate why cargo was not using the port and what mechanism decided the distribution of cargo between the various ports of the southern part of Vietnam.

8 3 2. THE EXISTING PORT A. Fixed Facilities a) General Description 2.01 The port is located approximately 8 km north of the city of Can Tho and approximately 3 km south of the Can Tho Export Processing Zone (EPZ). Immediately to the south of the port the land is occupied by a military installation whilst to the north is an open area used by a local construction company The site is approximately rectangular with an average width parallel to the road of 200 m and an average depth back from the waterfront of 135 m. It is basically level with an elevation of approximately 2.8 m above survey datum. (see figure 2.1) 2.03 During his visit, the Port Planner carried out an inspection of the port's fixed facilities and equipment For the fixed facilities, the inspection took the form of a visual inspection recorded as notes and photographs. It included an inspection of the underside of the jetty from a boat. No materials testing was undertaken The plant and equipment survey took the form of an external inspection, watching most of the plant in operation and a discussion with management about the problems encountered with each item. The two lorries have been rented out to another enterprise and were away from the port on both visits. The two barges were also away from the port having been rented out These surveys are sufficient to assess the likely load capacity and life of the port structures but they would have been much more effective had drawings of the structures been available. For the plant, they are adequate to assess the useful life and availability of the individual items. On both counts, the port management seemed to take a realistic and practical view. b) The Main Jetty 2.07 The main quay is a piled platform with a 144 m berthing face and a width of 18 m. It is connected to the shore by four access bridges each 6 m wide. Its surface is at an elevation of 3.0 m above datum. The published minimum depth of water alongside is 10.0 m The southern section of the quay, with a frontage of 61 m (200') was built by the US military before liberation. It consists of H section steel piles supporting in situ cast concrete beams. These in turn support precast concrete panels with in situ infills. At the front of this section of berth there is a fendering grillage on the berthing face. This structure consists of a steel grillage of the same section as the bearing piles but it is damaged and has no timbering attached. It is not evident whether the grillage originally had fender rubbers between it and the jetty. Apart from this damage and a small area of soffit

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10 spalling, this area of the quay is in excellent condition and appears to have been well built. The port has no drawings or loading data for this part of the quay and they report that no data exists in Vietnam. The study team is attempted to obtain copies of the drawings and loading data from the US military without success. In the absence of any loading criteria, the port takes the sensible view that this section is stronger than the newer section. Certainly the construction appears more substantial than the newer part and shows no sign of distress from overloading The northern 83 m of the quay was built in It uses 350 mm square precast concrete piles supporting cast in situ beams. These in turn support precast slabs with an in situ topping and infills. There are no fenders apart from irregular bundles of vehicle tyres hung over the berthing edge. At the inshore edge of the slab there is a plate which shows a design loading of 3.0 T/m. This section of the deck is constructed to very poor standards with considerable honeycombing of the concrete and some crude in situ making good around the top of the piles. Despite this the structure has suffered little visible deterioration. No copies of the construction drawings are held in the port and, at the time of writing, copies had not been located in the Ministry of Transport. Since the design criteria have not been established, no absolute view can be taken on the actual strength of the structure. It is understood that low concrete strengths have been assumed for the design and it is likely that the quay achieves the design strengths In September 1995 a project was started to infill the gaps between the bridges at the back of the quay. These sections are similar in design to the northern quay area. The port planner watched the piles being cast and some of the early piles being driven. The standards of workmanship were reasonable even if the cosmetic finish was rather poor. The piles were being driven to a set at a length of approximately 36 m below the finished deck level. The port staff stated that the thinking behind filling in these gaps was that the narrow deck and bridges made manoeuvring trucks difficult when loading large ships. They also wanted the ability to stuff and unstuff containers on the back edge of the jetty. The infill sections have been designed for the same loading as the northern section of the jetty. This work is scheduled to be completed in May The jetty has a small water supply (75 mm) surface run along the joint between the two sections. Behind the berth edge upstand this pipe has a tee fitting to feed two hose connectors. This arrangement is used to supply water to the ships although the port did not seem to know the rate at which water could be supplied. Otherwise the jetty has no services On the shore, some 23 m back from the jetty there are five light poles approximately 10 m high. Each pole carries two or three fittings several of which have no bulb. It is understood that for night working the port relies on the ship providing lighting. 4

11 5 c) Onshore Facilities 2.13 The two main cargo handling facilities on shore are a bitumen surfaced open storage area approximately 95 m x 60 m and a shed with an area of 4,500 m 2. There are other areas available in the port but they are not surfaced or drained The construction of the surfaced open storage area is not known but it was used for container handling for a year and appeared to have suffered little damage. The area is drained by shallow perimeter ditches which again appears to work reasonably well. The entry and exit points across these ditches is not well defined and this aspect needs further investigation and upgrading The cargo shed was built in 1982 but it is apparently never used. The metal roof has perforated over some of its area but otherwise the structure appears sound. The floor of the shed is concrete paved but the strength of the paving is unknown. For modern port use, the doors on the shed are rather small and would have to be widened if the shed were to be used for the handling of bulky cargoes There is general area lighting for the perimeter road around the open storage area. This is just about adequate for security purposes but not for safe working. d) Offices 2.17 At the road edge of the port there is a row of buildings which are offices, workshops, rest rooms and a workers' hostel The largest of the office buildings houses the Port Director's office and the main meeting room. This is in good condition with good quality furnishings and effective air conditioning The other three office buildings are of prefabricated construction and need new roof sheeting. At present they are kept weather tight by a collection of odd sheets and tarpaulins. This gives this area of the port a rather run down appearance. These offices are not air conditioned but they are designed with a verandah and hence provide a comfortable working environment Departments housed in these offices are - Planning and Stevedoring; - Finance and Accounting; - Dock Office; - Material and Technical; - Transportation and General Dockers; - Medical Services.

12 7 B. Equipment a) Port Equipment 2.28 Investment in equipment for the port is minimal and appears to have occurred in a series of discrete packages rather than as a planned programme. The newest items of plant on the port are the forklift trucks which are 1 0 years old. Despite this, and a general lack of spare parts, most of the equipment is in serviceable condition The port does not appear to keep a definitive list of the equipment it owns but the lists given below are as discussed with the port management. This differs in some respects from the list giving the assets of the port and, since not all the equipment was present in the port during the study team's visit, it has not been possible to verify which is correct. b) Floating Craft 2.30 The port owns the following floating plant Table 2.01 Floating plant - Port of Can Tho Item Size Condition: Tug 1400 HP American built,scuttled in Refloated and in sound but basic condition. A single screw tractor tug. Tug 135 H P Built Poor condition. Barge 300 T Built Not inspected. Barge 500T Built Not Inspected. Floating Crane 15 T approx Age unknown. Reasonable condition. This list corresponds closely with the port assets list. c) Cargo HandlinQ Equipment 2.31 The Port owns the following cargo handling equipment Table 2.02: Cargo handling equipment Item Size Age. Co<mnents: : Rubber Tyred Mobile Crane 25 T lift approx Rubber Tyred Mobile Crane ZOT lift approx More than 20 years Moto-Crane Lorrain. Good Condition. Rubber Tyred Mobile Crane Unknown Unknown Derelict. More than 20 years Unknown make. Reasonable condition. 2 No fork lift trucks 5 T 10 years Bulgarian made. Moderate condition. No parts available. Substitute parts used. 2 Tractors 50 HP approx 10 years Czech manufacture. Moderate condition. 4 Trailers 20 T capacity Unknown 2 Usable but poor condition. 2 Derelict 2 Lorries 30 T approx Unknown Russian Mars type. Not inspected. The port asset list shows a further two lorries but these were not present at the port during the study.

13 2.32 In addition to these items of equipment, the port owns a range of cargo slings, nets and three grabs of approximately 1.5 m 3 each. The condition of the nets and slings is very variable. Two of the grabs are in moderate condition and a third is in the process of being rebuilt. 8 d) Other Equipment 2.33 Besides the cargo handling equipment listed above, the port owns two cars, one van and one 12 seat minibus. All appear in good condition and are reported to cover quite small annual milages In addition to the usual tables, chairs and desks, the office equipment consists of the following:- Table 2.03: Other Equipment tenm Age Comments Various typewriters Unknown Used mostly by the traffic department and for correspondence. Various Desk Calculators Less than 5 years A3 size photocopier New Adequate for general office use Intel 486 based desk top New Used mainly by the accounts department computer I_I Laser printer New As above. Fax machine New Frequently switched off and hence not available For the present level of operations this sis satisfactory but further office equipment will be needed to keep up with management functions if the port traffic increases.

14 9 C. Management a) The Control of the Port 2.36 The port of Can Tho was until recently controlled by the provincial government. Approximately two years ago the port was designated as an international port and control was passed to the Ministry of Transport. This change appears to have had little impact on the running of the port with the same management team being retained. b) The Management Structure 2.37 The port is managed by the Director assisted by two Vice Directors. These staff have been in place for a number of years and they appear to have the present operations and manning arrangements. One consequence of their period in office is that many of the present practices have evolved and are not fully documented. This makes any study such as this slightly difficult as most information has to be derived from discussions rather than being available in tabulated form. As an example, the team's requests for an organisation chart were acknowledged politely but no chart was ever forthcoming. Evidently the management knew how responsibilities were divided and saw no need for such documentation Below this upper layer of management, the port is split into the following departments :- - Planning and Stevedoring (Port Operations); - Finance and Accounting (Finance); - Dock Office (Services to ships); - Material and Technical (Maintenance); - Transportation and General Dockers (Personnel). As described above, the exact split of responsibility between these departments is poorly defined and any future management training must start with a review of present roles and a documentation of responsibilities. A discussion with the managers indicated that these departments seem to cover most of a port's normal functions with some overlaps. There are however a number of functions which are not covered :- - There is no marketing department. At present the port's only promotion of its capabilities are occasional advertisements in trade and local journals. This clearly shows the port's history as part of a planned economy. This must be addressed if the port is to take its share of the traffic in the Delta. - There is very little financial planning in the port. This is shown by the port having the same planned trade in each of the last four years, in none of which years has it achieved anything like the target. Similarly budgets for the year are set in a purely nominal way with little regard for the defined needs of the port. The tariffs for the port are set centrally and do not reflect the costs of the port.

15 - The technical department concerns itself purely with the equipment of the port, not even holding any drawings of the port's structures and buildings. If greater use is to be made of the port's facilities, the management must have a better grasp of how they can be loaded and adapted to suit customers' requirements To cover these requirements will need some training of the management team and the addition of an experienced port engineer. The real need is however for the management to be convinced that it is now operating in a market environment and to be trained to handle the changes and pressures which this requires. The introduction of a genuinely performance based incentive scheme would be very likely to provide most of the motivation needed. c) Customer Reactions to Management 2.40 A number of the port's customers were interviewed to find their views on the management of the port. All those interviewed commented that the port management was helpful, responsive and easy to deal with. The comment did however come out that the initiative for changes to operating patterns tended to come from the customers rather than the port staff. 10 D. Manning a) Permanent Staff 2.41 In addition to the three directors and vice directors, the port is reported to have the following full time employees. No documents verifying these numbers have been found. Table 2.04: Permanent Staff Depermem Planning and Stevedoring Finance and Accounting Dock Office Materials and Technical Transportation Staff Numbers 1 manager 2 supervisors 23 tally clerks 1 manager 6 clerks 1 supervisor 3 clerks 1 manager 2 supervisors 3 clerks 3 technicians 6 part time technicians 2 supervisors 24 operators At the present traffic levels, it would appear that these staff are generally under utilised and that they could deal with at least a doubling of throughput.

16 1 1 b) Casual Labour 2.42 The labourers working in the port are employed on a casual basis being drawn from a pool of about 300 registered workers. They are employed almost entirely on a piece work basis with no guaranteed minimum payment. On this basis a man could report for work but if it rains all day, he will get no payment. On average the labourers work in the port for approximately 1 2 days per month, most being farmers for the rest of the time. The labourers are responsible for their own transport to work and most seem to walk or travel by bicycle This system has of casual labour has many advantages for the port but at present the labour pool is probably too small to handle a higher throughput or true multi shift working. With the high population density in the Delta, there should be no problem increasing the labour pool so that an increased throughput can be achieved without disrupting the workers' other activities. c) Skill Levels 2.44 During a few days observation, the work of the port appeared to be carried out with good personal skills and the loading gangs achieved good throughputs for the technology used The checking and monitoring procedures seemed to be well organised and worked in a smooth but very labour intensive manner The ability of the maintenance technicians to look after an elderly, if lightly used, collection of equipment is impressive. They are obviously well practised at repairing and rebuilding components with whatever materials come to hand. With new plant, these technicians may well have to learn some new skills and the introduction of proper lighting and reefer power supplies will require the port to take on a full time electrician The finance department seemed to produce rather erratic figures but it is difficult to tell whether this was a function of the individuals or the systems in use. The introduction of a new accounting system this year should address this issue As described above, the main skill deficiencies can be identified as being in the areas of marketing, operations planning and budgeting. These are all functions carried out at a senior level in the organisation and it is at manager level and above that the training effort should be concentrated.

17 12 E. Access to the Port a) Access by Road 2.49 The port is situated adjacent to the main road north-west out of Can Tho and this is able to handle considerable volumes of traffic. Like all major roads in the Delta it suffers from the many bridges having very poor transitions and not being able to carry trucks above 1 8 or 25 Tonnes. This makes it impossible to carry full 40' containers more than a few kilometres from the port. There is a programme of upgrading bridges but this will take many years to complete The proposed bridge across the Bassac River just downstream of the port will make it much easier to bring cargo from the east and north but other trunk road improvements will also make it more attractive to take this cargo to Ho Chi Minh City The immediate entrance into the port is rather sharp with very little run off area from the main road. This is readily corrected by small changes to the layout and safety would be greatly improved. b) Access by Barae 2.52 At present, more than half the port's cargo arrives by barge or country boat. This is a very efficient form of transport and is encouraged by Can Tho's position at the centre of the Delta waterways system. Inland waterways access to Can Tho will be improved by the upgrading of the waterways proposed elsewhere in this study One problem with the present fleet of inland waterways craft which serve Can Tho is the layout of the typical wooden country boat. This craft has developed around loading and discharge by manual labour and generally the hatches are.too small to allow the use of full sized cargo nets and slings when handling bagged cargo. As more of the rice mills develop mechanised loading docks, the country boats will be adapted to have larger hatches. Also with time, it is likely that there will be more steel built barges in the fleet and these are likely to have modern hatch arrangements. c) Shivoina Access 2.54 The published information about Can Tho shows it to be accessible to ships of 3,000 DWT at all states of tide and 5,000 DWT at high tide. These figures have led to the perception that Can Tho is a small port only suitable for coastal trades In fact these published figures are highly misleading since access to the port is fixed by the water depths available in the Dinh An channel at the mouth of the Bassac River. The charting of this channel is not good with insufficient soundings being available to determine the true water depths available at different seasons. There is a planned study of the regime of the Bassac entrance and this is very important for the future of the port.

18 2.56 It would appear from the available information that there is sufficient depth in the entrance to allow ships with a draft of 7.0 m to transit the channel and it is known that vessels of up to 7.5 m have used the river. Given the tidal range of m, this would equate to full tide access for vessels of up to 4.0 m draft. Appendix II gives details of typical general cargo and container ships in this size range These shipping lists clearly show that there are many vessels of up to 7,000 DWT able to access the Dinh Ahn channel and that careful choice of ship gives up to 1 2,000 DWT. These figures assume that the vessel is laden to full draft but often cargo densities leave a ship at less than her maximum draft even when fully laden. A recent example of this was the call at Can Tho by an 11,000 DWT ship which left with 8,000 T of cargo at a draft of 7.2 m If the ability to take ships of up to 7.5 m draft were more widely publicised, it would make the port much more attractive to shippers even without the planned deepening of the Dinh An channel The Port of Can Tho has a minimum alongside depth of 10 m so the capacity of the quay is not a constraint on ship size. 1 3

19 14 3. PORT TRAFFIC A. Historical Traffic a) Overall Traffic Handled 3.01 The traffic through the port of Can Tho has varied widely over the last few years. Full historical cargo data for the years and preliminary data for 1995 were obtained from the port and have been analysed The statistics kept are reasonably comprehensive for the size of port but they suffer somewhat from the headings changing year to year. It has therefore been found necessary to modify the cargo groups in order to give a consistent picture of the cargo passing through the port. Table 3.01 shows the modified version of the same table. Table 3.01: Can Tho Port Cargo Throughputs (Tl Year Cargo Total 92, ,419 53,903 65, ,277 Exports 43,758 46,101 30,570 9,710 44, Rice, food, Agri products 33,253 20,683 10,889 9,107 26,081 98,774 Seafood 7,992 Wood 19, Miscellaneous 10,505 25, Imports 43,818 55,034 6,210 28,533 13, Construction Materials 7,937 3,261 6,300 8,685 2,756 Fertiliser 15,507 15,555 5,501 20,807 Flour, sugar 11, Miscellaneous , ,426 4,922 5,445 Domestic Cargo 5,113 4, ,660 8, Fertiliser Cement 2,498 2,603 17,107 13,385 15,392 Food 1,080 1, ,513 5,527 Wood Coal Agricultural Products 1,193 Miscellaneous , Ship Calls Foreign Vietnamese Barges Working Days ? Weather Delays ? Holidays No Ship ? 3.03 Domestic cargo in the above tables is defined as being import cargo from within Vietnam. This may have arrived by sea from northern Vietnam or it may have arrived by barge from a more local source.

20 1 5 These changes in throughput are demonstrated below. Can Tho Port Cargo Throughputs 140, ,27 120, , , ,89 s0, ,870 60, b ,00e ± Yea As can be seen, the total throughput of the port has almost doubled between 1994 and b) Changes in Traffic Patterns 3.04 The cargo traffic using the port has seen quite substantial changes over the last few years. This is not unusual in small ports but the presence of the competing Ho Chi Minh ports close by makes the trade through Can Tho particularly volatile One example of the irregular pattern of trade is the container trade through the port. In November 1 993, Maersk started a container service between Can Tho and Singapore. This service was operated by the small (1,210 DWT, 61 TEU) container vessel Marie Riis following a triangular route Singapore - Vung Tau - Can Tho - Singapore. In the second half of 1994, this route was varied to be sometimes direct Singapore - Can Tho - Singapore and some times calls in Thailand were included. In late November 1994, the larger Mekong Harmony (3061 DWT) took over the route but the service was cancelled with one month's notice at the end of Despite its short period of operation and slightly irregular scheduling, (intervals varied from 7 to 17 days with a 9 day mean) this service attracted regular business from the frozen food export market, a field which is otherwise not addressed by Can Tho Port. Table 3.02 shows the cargo types and tonnages carried by the service.

21 16 Table 3.02: Can Tho Port - Container Traffic 1994 Call Vessel Arrival DepartLsre Cargo in Torks Cargo Out Tons Number Misc Agricultural Reefer Wood Rice 4 Marie Riis 31-Dec 01-Jan Marie Riis 07-Jan 10-Jan Marie Riis 17-Jan 17-Jan Marie Riis 03-Febi 03-Feb Marie Riis 14-Feb 14-Feb Marie Riis 23-Feb 23-Feb Marie Riis 03-Mar 04-Mar Marie Riis 11-Mar 11-Mar Marie Riis 19-Mar 19-Mar Marie Riis 26-Mar 26-Mar Marie Riis 11-Apr 11-Apr Marie Riis 19-Apr 19-Apr Marie Riis 03-Apr 03-Apr Marie Riis 27-Apr 27-Apr Marie Riis 03-May 03-May Marie Riis 13-May 1 3-May Marie Riis 20-May 20-May Marie Riis 28-May 29-May Marie Riis 05-Jun 05-Jun Marie Riis 13-Jun 13-Jun Marie RAis 21-Jun 22-Jun Marie Ails 29-Jun 30-Jun Marie Riis 08-Jul 08-Jul Marie Riis 14-Jul 16-Jul Marie Riis 21-Jul 22-Jul Marie Riis 27-Jul 27-Jul Marie Riis 05-Aug 05-Aug Marie Riis 20-Aug 20-Aug Marie Riis 26-Aug 27-Aug Marie Riis 01-Sep 01-Sep Marie Riis 07-Sep 08-Sep Marie Riis 13-Sep 13-Sep Marie Riis 19-Sep 19-Sep Marie Aiis 25-Sep 25-Sep Marie Riis 03-Oct 03-Oct Marie Riis 11 -Oct 11 -Oct Marie Riis 19-Oct 19-Oct Marie Riis 27-Oct 27-O0t Marie Riis 05-Nov 05-Nov Marie Riis 14-Nov 1 5-Nov M e k o n g 25-Nov 25-Nov Harmony _ 88 Mekong 15-Dec 15-Dec Harmony Totals Averages

22 1 7 Call Vessel j Arrival Departure Cargo In Tons Cargo Out Tons Number Misc Agricultural Reefer Wood Rice N o o f Imports Export Voyages full empty full empty E Average cargo weight per container Imports l Exports Average box exchange per call Full (Total on and off) Empty _ 3.06 Without a container service from Can Tho it is going to be very difficult for the port to diversify away from the shipment of bagged agricultural products. The full reasons for the Maersk service closing have not yet been established but the fact that a service has already been seen to fail will make it much more difficult for the port to attract a replacement service. It is most likely from the figures that the main reason for the closure was simple lack of trade To establish a new service, a sustained marketing campaign will be needed and it may be necessary for the port to provide additional facilities in support of the operation. With the earlier service, virtually all the containers were taken from the ship's side by trailer and put down in the container yard. there they were emptied and the cargo loaded onto lorries. Outgoing cargoes arrived by lorries and were stuffed in the port. This is a relatively inefficient way to use containers but it is dictated by very few of the end customers having facilities to handle containers on their own premises. This could be addressed by the *port operating a container delivery service using self discharging container lorries helping to boost traffic. Ideally the port should stick to its core business but it may be difficult to persuade an outside operator to invest in the necessary plant In a similar way, there may be scope for the port to operate a cold store facility to assist in the groupage of refrigerated cargoes. Alternatively, an existing cold store operator may be able to provide this service, possibly in conjunction with the container delivery service described above One feature of the earlier service was the very high proportion of empty containers (43% of imports, 30% of exports) carried. This is quite common with small container services and is a result of differing patterns of trade inbound and outbound. In this case most of the inbound trade is miscellaneous cargo shipped in plain containers whilst most exports are refrigerated cargo in reefer containers. Unless there is an increase in consumption of frozen food in the delta, which is unlikely, there seems no way of correcting the imbalance for reefer containers. When Can Tho develops as a regional distribution centre, more goods should be shipped in direct by container and hopefully this can be balanced by the development of new industries exporting manufactured goods.

23 18 B. Port Traffic in the South of Vietnam a) The Network of Ports 3.10 At present, together with the development of Saigon port complex, a system of sea and river /sea ports has been developed from the southern area of the Middle Region to the South Region such as : Cat Lo port (Ba Ria - Vung Tau), Go Dau port (Dong Nai), My Tho (Tien Giang), Tran Quoc Toan (Dong Thap), Vinh Thai (Vinh Long), Can Tho port (Can Tho), My Thoi (An Giang), Hon Chong (Kien Giang), Nam Can (Minh Hai). These are small scale ports with the accessibility for 1,000-5,000 DWT ships and the capability of ,000 T / year. The main reasons for these low trade levels are inability to attract cargo and shallow access channels As shown in National Transport Development Strategy, 3 Maritime Trade Centers will be developed in the South in near future. They are: HCMC port complex, Thi Vai - Vung Tau port complex and Can Tho port. 1. HCMC port complex: Though there will be many changes of the cargo flows from Mekong Delta to outside provinces; a proportion of agricultural products, foodstuff, agricultural materials and some other cargoes will not be trans-shipped to HCMC area. HCMC still takes the key role as the main gateway to the South. HCMC has an dominant position of trade, service, industry and socio - economic advantages. It would take at least 20 years and the investment of about 2 billion dollars to develop a port with equipment to match the HCMC port complex. Hence the HCMC port complex will continue to be upgraded, improved and developed in parallel with other ports. 2. Vung Tau - Thi Vai port complex: At the end of the 20th c.entury, the international deep sea shipping market has made may changes, especially in transporting container, bulk cargo, liquid cargo and over-length, over -weight cargoes. With the tendency of using largesize vessels worldwide, there should be deep-water ports with modern equipment to facilitate the cargo handling. The HCMC port complex access channel along the Long Tau river has restrictions of width and depth. The rehabilitation of this access channel needs much of investment and effort. As a result a deep-water port complex will be developed in Vung Tau - Thi Vai area for large vessels in case as a more effective option. Functions of Vung Tau - Thi Vai deep-water port complex: - Handling bulk cargo : bauxite and alumina. - Specialized berth for oil exploitation in the South. - Specialized berth for paper materials from eucalyptus wood. - Specialized berth for Go Dau industrial park, Long Thanh phosphate fertilizer factory. - Trans-shipment berth for cargo and raw materials from other provinces for export. - Berth for International Maritime Services.

24 Can Tho port: The Mekong Delta Master Plan indicated that Can Tho will become a major centre in the economy of Mekong Delta. Can Tho port will be a major port for handling bulk, bagged cargoes and container in Mekong Delta. Once the improvement ot the Dinh An access channel is completed and the Bassac river becomes the major navigation route, Can Tho port should be upgraded to become the trans-shipment port for Saigon, Vung Tau ports and international ports such as Singapore and Hong Kong. It will also be the port for transferring cargo between the Mekong Delta and Cambodia. Can Tho port will be the gateway for cargo transport to the 5 provinces in the southern area of Bassac river (An Giang, Can Tho, Soc Trang, Minh Hai, Kien Giang) and a part of the provinces: Vinh Long, Tra Vinh, Dong Thap. At present, cargo from the North and foreign countries transported to these provinces must be transferred through the ports in HCMC. The upgrading of Can Tho port will share the huge volume of cargo at these ports, and concurrently push up the production, thus making an important contribution to the economy of the above provinces and changing Can Tho into a trade center of domestic and international significance The access channels: 1. Saigon - Vung Tau access channel: The present Saigon - Vung Tau access channel runs along Nga Bay river, reaches to Long Tau, Nha Be rivers and goes into Saigon river. The bed river has the width of 800 m at some widest places and about 200 m at the narrowest place. The bed channel elevation is about m except some hard clay shallow places. There are several bending sections with small bend radii on the channel line that makes difficulties for vessel passage (especially at L'EST point). The 95 km long of the access channel is divided into 7 parts Part 1: From the beginning to Bai Yen (Ganh Rai) + Channel width : 200 m + Smallest channel depth : 9.6 m / OTS Part 2 : From Bai Yen to Bon Mat river ( Stand N 13) + Channel width : 400 m + Smallest channel depth : 10 m / OTS Part 3: From Bon Mat river to An Thanh point (Stand N 1 5): + Channel width : 200 m + Smallest channel depth : 8.2 m /OTS Part 4 : From an Thanh point to Dong Tranh river (Stand No1 6): + Channel width : 150 m + Smallest channel depth : 7.0 m/ots Part 5 : From Dong Tranh river to Pha Mi point (light stand No1 8): + Channel width : 200 m + Smallest channel depth : 9.6 m/ots

25 20 Part 6: From Pha Mi point to Den Do point: -+ Channel width : 200 m + Smallest channel depth : 8.5 m/ots Part 7 : From Den Do point to Saigon port: + Channel width : 150 m + Smallest channel depth : 8.5 m/ots 3.13 To provide the accessibility for large vessels, the Maritime Bureau has approved the channel improvement project. After being rehabilitated the shoals then have the depth of about m deep. With little dredging work and unchanged natural conditions the channel can provide the accessibility for fully - laden ships of 18,000 DWT at high tide (> m) There are 5 segments that have the depth of under m on channel alignment from Vung Tau to the port: - Can Gio mouth : about 3.5 km - Dan Xay area : about 1.0 km - Keverlla point area : about 1.5 km - LEst point area : about 3.5 km - The area near red light : about 1.5 km The dredging volume at 11 km of shoals is 1,350,000 m 3. Some sections with bending radius R = 1,000 m will be widened with B = 250 m, so that bending radius will be 5,000 m. From 2000 forward, according to the study on the changes of current, the L'Est point and bending sections will be straightened for safe passage of vessels. The volume of dredging and bending is about 2,000,000 m Beside, with urgent requirements to widen the field of action to meet the demand of international shipping route, the People's Committee of HCMC has decided to carry out the study on dredging of Soai Rap river to provide surface for the urbanization and industrial development. Soai Rap river is the second navigation channel for foreign vessels going in and out of the HCMC port complex. The present depth of Soai Rap river is less than that of Long Tau river but it is short and straight with the width of 1,000 m The purposes of the dredging of Soai Rap river: - Forming a new, safe and short navigation channel for foreign ships going into / out of the HCMC port complex; - Taking sand from the shoals, transferring to the lowlands in the south of HCMC to provide the surface for the construction of the new urban and industrial areas such as the Hiep Phuoc Industrial Zone; - Developing a new berth to meet the increasing demand of exporting in HCMC and the Southern region.

26 3.18 The natural resources and environmental condition at the mouth of Soai Rap river have been surveyed by the Tan Thuan Industrial Development Company belonging to the People's Committee of HCMC in association with experts and specialized agencies such as Professor Tran Kim Thach - Doctor of Geology, Southern Hydraulics Science Institute (Ministry of Hydraulics) to study the possibility of developing the channel for large - size vessels. The study consists of - Positioning the channel alignment and planning the dredging of the channel on Soai Rap river, study on the stability of the channel; - Bending the Nha Be - Long Tau T-junction to improve the navigation capacity at present natural condition; - Evaluating the effect and influence of the dredging work on the meteohydraulics behaviour of the downstream river network of Dong Nai - Saigon rivers and changes of saline intrusion The feasibility study was due to be completed at the end of If the technical features and economical effects are feasible, the HCMC port complex new access channel will be at the same grade with Thi Vai - Vung Tau access channel and it's potential will be beyond the present predictions. 2. Thi Vai access channel: 3.20 The operating access channel of Thi Vai with the length of about 40 km including 12 km from channel dividing buoy to the mouth of Cai Mep river and 28 km from Cai Mep river to Go Dau port is divided as follows Part 1: From channel dividing buoy to buoy N 5 + Channel width :150 m + Smallest channel depth :10.5 m / OTS. Part 2 : From buoy N 5 to buoy N1 5 + Channel width :150 m + Smallest channel depth : 9.8 m / OTS From buoy N 5 to Go Dau port + Channel width :80 m + Smallest channel depth : 6.5 m / OTS VEDAN access channel part : from buoy N 0 20 to VEDAN berth + Channel length :1,400 m + Channel width :80 m + Smallest channel depth : 6.2 m / OTS 3.21 The Thi Vai river system consists of Thi Vai river, Go Gia river and Cai Mep river. Thi Vai - Cai Mep river, 40 km long, runs in South - North direction almost in parallel to the National road N The average depth is m, the deepest place (Thi Vai-Go Gia - Cai Mep junction) is 30 m deep. It's average width is m and on Cai Mep river there are some places having a width of 1,000 m. With little volume of dredging the access channel of Thi Vai and Cai Mep river can accommodate 30,000 DWT vessels at high tide. 21

27 3.22 At present, there is a bending segment with bending radius R = 300 m from Ganh Rai bay to Go Dau whose accessibility only for 3,000 DWT vessel; if using tug - boat, the 5,000 DWT vessel can go through. There should be measures of dredging and bending at Go Dau access channel for 10,000 DWT vessel passage. 3. Dinh An access channel 3.23 Dredging through the outer bar in and again in 1983 failed to sustain improved depths of 4.2 m below chart datum (= Lowest Low Water) and the channel was lost after a few months. However, in July 1991 a channel with a bottom width of 75 m was dredged to -4.5 m over a 75 km reach on a different more northerly alignment, again with the intention of permitting high water access for ships of 5,000 DWT or more. This dredging was more successful and the latest bathymetric survey in September 1993 shows a least depth of 3.5 m below chart datum along the channel and generally channel levels are in excess of 4.0 m. Since the last dredging it is reported that several vessels with drafts up (equivalent in government tables to fully laden cargo ships of 5,000 DWT) have made the passage to Can Tho and in some instances to Phnom Penh. However, the pilots had to time the crossing of the bars to make entry to the Bassac river on the Higher High Water of Spring Tides i.e when water levels were at least 3.0 m above chart datum The operating access channel to Can Tho port is 110 km long (59 miles) including 31 km of Dinh An access channel (from buoy 0 to the stand 13) with the channel width of 150 m and the average depth of 3.9 m / OTS. b) Comparative Shiwoina Costs from Can Tho 3.25 In considering future trade from Can Tho, the most important single factor is the competition between Ho Chi Minh City and Can Tho. Since the main Vietnamese shipping industry is based in HCMC, and has all its storage facilities there, the natural tendency is to ship through that port. Only if Can Tho shows a significant voyage cost advantage will it gain a significant market share. Set out below are the significant shipping cost differences between Can Tho and HCMC. 1. Current transport costs for different categories of cargo HCM City to Cantho and vice-versa ( rice, fertilizer, container, general cargo, refrigerated cargo). Transport costs: By waterways Rice 3.60 USD/T Fertilizer 4.10 USDIT Container 3.64 USD/T By road: General cargo 7.60 USD/T Refrigerated cargo USD/T The above are the bare freight costs between the two centres. It is understood from shippers that there are other costs associated with shipping delays which push the total costs above US$ 6 per Tonne. 22