To: Ministry of Planning and Investment

Transcription

1 MINISTRY OF TRANSPORT SOCIALIST REPUBLIC OF VIETNAM Independence-Freedom-Happiness Ref. No. 4398/BGTVT-QLDN Hanoi, April 21, 2016 Re: report on follow-ups of comments and recommendations raised at annual VBF 2015 To: Ministry of Planning and Investment The Ministry of Transport (MOT) received Official Letter No. 2401/BKHDT-DTNN, dated Mar. 31, 2016, of the Ministry of Planning and Investment (MPI), requesting responses on the comments and recommendations raised at the annual 2015 VBF. After reading the comments and recommendations related to the transport sector in the Attachment to Official Letter No. 175/BKHDT-DTNN, dated Jan. 11, 2016, MOT hereunder provides its consolidated follow-up report. 1. Recommendations related to infrastructure development through public-private partnership (PPP) (section 6i, Attachment) As indicated by a World Economic Forum (WEF) study in 2015 covering 140 countries, the utility and quality of infrastructure in Vietnam in 2015 gained 23 ranks compared to 2012, and now stands at 67 compared to 90 in 2012 and 103 in This is proof that Vietnam s efforts of investing in infrastructure had paid off and are internationally recognized, as the sector is increasingly appealing to international investors. But the existing transport infrastructure system still falls short of meeting the requirements for capacity and quality to meet socioeconomic development goals of the country in a fast and sustainable manner. By estimates, the funding need for transport infrastructure development in under MOT s direct jurisdiction is about VND1 quadrillion. Yet, in the current context where the funding need for transport infrastructure development is massive and constantly exceeds what the government budget can afford and will so remain for sustained periods, especially when revenue and government bond resources are unlikely to see any sudden surges, while ODA funding is withdrawing now that Vietnam has become a middle income nation, to maintain transport infrastructure development as a strategic socioeconomic development goal, an inescapable solution will be to call on investment in transport infrastructure development through public private partnership (PPP), including event small sized projects. To increase engagement of nonpublic resources for infrastructure development and transport infrastructure development in particular, the government released Decree No. 108/2009/ND-CP dated Nov. 27, 2009, and Decision No. 71/2010/QD-TTg, providing rules for piloting public private partnership investment. Five years into implementation, to date, this form of partnership has now been formalized by the government in Decree No. 15/2015/ND-CP, dated Feb. 14, 2015, on public private partnership, and Decree No. 30/2015/ND-CP, dated Mar. 17, 2015, on procurement and selection of investors to finalized in time applicable legislation and provide a comprehensive legal framework to meet the practical needs for initiation of mixed public-private investment in transport infrastructure through public private partnership routes. Accordingly, not only smaller PPP projects must follow procurement procedures, but according to Decree No. 15/2015/ND-CP and Decree No. 30/2015/ND-CP, any PPP projects must also use international prequalification steps for projects of Group B and higher, as extensive tender is mandatory for all PPP projects. MPI is working on the drafts, currently at the stage of final

2 consultation with relevant ministries and line agencies, of various Circulars providing guidance on what templates of prequalification and bidding documents will be used for PPP projects prior to release. Even though implementing Circulars are not yet available, since the above mentioned two Decrees came into effect, MOT was very serious in requiring all PPP projects of Group B and higher to follow international prequalification steps, and mandated extensive tender for all PPP projects. 2. Recommendations on the logistic subsector (section 6ii, Attachment) As planned, the Cai Mep-Thi Vai area has in total 38 development projects for mixed function piers and container terminals, including 29 mixed function piers with a gross capacity of million tons and 9 specialized container terminals for a combined capacity of about 10.3 million TEUs. Among the piers in the approved zoning plan, 17 mixed function piers and container terminals have now been in operation, including 11 mixed function piers for a gross capacity of 21.3 million tons and 6 container terminals for a combined capacity of 6.8 million TEUs. Over the years, terminal projects at the Cai Mep-Thi Vai area have been under fast construction to be put into operation, especially container terminals such as SITV, SP-PSA, New Cai Mep terminal and CMIT. The above piers have been receiving hundreds of arrivals of vessels larger than 80,000 DWT tonnage passing through on their way to America and Europe, where CMIT can service up to 157,000 DWT ships and SP-PSA can take on 117,000 DWT ships. Pursuant to MOT s Decision No. 3327/QD-BGTVT, dated Aug. 29, 2014, approving the detailed zoning plan for the Southeastern seaport cluster (Group 5) by 2020 and vision to 2030, Vung Tau seaport (which encompasses the Cai Mep terminal area) will be a national versatile port and international gateway (Class IA) and function as an international transit port. This port will have a designed throughput of about million tons per year by 2020, million tons per year by 2025, and about million tons per year by For containers alone, it will be an estimated million TEUs per year by 2015, million TEUs per year by 2020, million TEUs per year by 2025, and million TEUs per year by International sea passenger throughput by 2020 will be 122, ,700 per year, 157, ,800 per year by 2025, and 201, ,800 per year by The Cai Mep-Thi Vai terminal area is identified in the zoning plan as the core pier group of the area, mostly serving export and import containers for distant-water routes and international transit container routes, capable of docking 80, ,000 ton vessels (6,000-8,000 TEU capacity), with further waterway improvements for acceptance of over 100,000 ton ships. Looking forward to even more robust development of seaport operations in the Cai Mep-Thi Vai area, preferred projects for periods up to 2020 in the zoning plan include: - Cai Mep-Thi Vai route: comprehensive studies of the Cai Mep-Thi Vai sea waterway system will be completed to support investment promotion and planning in order to quickly attract shipping companies to the Cai Mep-Thi Vai area. - The routes connecting HCMC and Cai Mep-Thi Vai area: the Dong Tranh river waterway connecting HCMC and Cai Mep-Thi Vai area is under construction. The project has now completed environmental impact assessment, ready for commencement. - Access roads connecting the terminals: Highway 51 (Dong Nai Ba Ria Vung Tau; Cai Mep-Thi Vai interport road (Ba Ria-Vung Tau); 991B Road, Phuoc Hoa-Cai Mep road will be developed to provide road access to the Cai Mep-Thi Vai area and Cai Mep ha logistics center. In addition to the detailed zoning plan for preferred infrastructure projects, other strategies and policies to help promote seaport operations at the Cai Mep-Thi Vai area have also been released by the government and relevant ministries/line agencies, including load/unload charge stabilization,

3 marine due reduction/adjustment, zoning and cargo management solutions, administrative procedure reform, among others. 3. Recommendations related to the corporatization of select companies affiliated to MOT (section 6iii, Attachment) a) Vietnam Airlines Rolling out the Prime Minister s Decision No. 1611/QD-TTg, dated Sep. 10, 2014, approving the plan for the parent company Vietnam Airlines to go public, to date, the corporation has completed the IPO stage to change to a publicly traded company since May 2015, and is wrapping up negotiations to sign an agreement with a strategic partner All Nippon Airways (of Japan) within Q2/2016, so that the government s equity will reduce over time to 75% of the charter capital according to the approved plan. In the immediate future, based on the criteria and classification groups for state-owned enterprises and companies with government equity, and the company s specific needs and context, MOT will report and advise the Prime Minister for consideration and decision making on how to reduce the government s holding in the company to under 75% of the charter capital. As for the Airplane Fuel single member Co., Ltd., the three land-based services companies in Noi Bai, Da Nang and Tan Son Nhat, and Vietnam Airlines Catering Co., Ltd. (a wholly-owned business of Vietnam Airlines), according to the approved restructuring plan, Vietnam Airlines will convert these companies to publicly traded firms, while retaining over 50% its equity in these companies. Nevertheless, since the parent company Vietnam Airlines has transformed to a joint stock company, the aforementioned businesses are not mandatorily subject to going public under existing laws. Thus, the Corporation has finished merger of the three land-based services companies in Noi Bai, Da Nang and Tan Son Nhat to a single member limited liability company to trim down organization. For joint stock companies for which full divestment is required in line with the approved restructuring plan, Vietnam Airlines has basically completed such divestment, and is taking steps to restructure and withdraw the remaining equity from Airlines High-end Plastics JS Co., while guaranteeing disclosure, transparency and efficiency. b) Vietnam Airport Corporation On Oct. 6, 2015, the Prime Minister released Decision No. 1710/QD-TTg approving the corporatization plan for the parent company Vietnam Airport Corporation (ACV). Following this plan, the corporation completed initial public offering on Dec. 10, 2015, and officially changed to a publicly traded company since Apr. 1, According to the approved plan, the government retains 75% of its share in the charter capital, as 20% of the shares were sold to strategic partners and 5% sold through IPO and to employees. As delegated by the Prime Minister, MOT approved the selection criteria and shortlist of strategic investors for ACV, namely Aeroport De Paris (of France). ACV and the strategic partner are now in close negotiations, with an agreement expected to be closed within Q3/2016. The entire process of ACV going public has been reported with disclosure and transparency as required by law. In the foreseeable future, based on applicable criteria and classification grouping for state-owned enterprises and companies with government equity, as well as the company s specific needs and context, MOT will report and advise the Prime Minister for considerations and decision making to the effect that brings the government s share to below 75% of the charter capital. c) Vietnam Railway Corporation In follow-ups of the Prime Minister s directives, MOT advised Vietnam Railway Corporation to complete the transformation of its 24 single member limited liability companies operating in railway

4 management and maintenance, railway communication and signaling, railway transport and trains to joint stock companies within These 24 companies have now been functioning as joint stock firms since January 2016, while the parent company retains controlling shares in those companies in line with applicable laws and the Prime Minister s instructions. The entire corporatization process was reported with disclosure and transparency in line with the procedures and steps required by law. For joint stock companies subject to divestment in line with the restructuring plan approved by the Prime Minister, MOT advised the Corporation to take quick actions and complete the process within Divestment from 07 joint stock companies has completed to date, while holding was reduced at 14 other JS companies, and further divestment has been underway with the remaining 16 JS firms. The entire divestment process went on with disclosure and transparency in line with the procedures and steps required by law. d) Vietnam Maritime Corporation In follow-ups of the restructuring plan approved by the Prime Minister, MOT submitted to the Prime Minister for review and acceptance of the corporatization plan for the parent company Vietnam Maritime Corporation, where the government is expected to retain 36% of the charter capital. Upon receipt of the Prime Minister s advice, MOT will further improve the plan and start offering shares to interested investors once the Prime Minister approved the plan. As for joint stock companies that are seaport operators, after going public and in line with the Prime Minister s advice on reducing equity in seaport operations to give way to capable investors to get involved in governance, management, enhancement of performance and competitiveness of the local seaport system, MOT has started divestment from several seaport operations as planned. In sum, over the past months, in line with the Resolution of the Central Party 3 Term IX, and instructions of the government and Prime Minister on restructuring state-owned enterprises, with a focus on reshuffling, renovation and improvement of the performance of state-run corporations and groups, MOT has been concentrating efforts on accelerating corporatization of state-owned enterprises and divestment from businesses where the government no longer needs to hold controlling shares, non-core businesses and inefficient investments, to draw available resources from other interested stakeholders to get involved in management, governance, improvement of performance and competitiveness for the targeted companies and the economy as a whole. The corporatization and divestment process at various MOT corporations in the past months took place in line with applicable laws and guidelines of the government and Prime Minister, while meeting disclosure and transparency requirements. 4. Recommendations on strengthening road safety (section 6iv, Attachment) Since 2012, the Prime Minister had approved the National strategy for maintenance of road safety and order by 2020 and vision to 2030 (in Decision No. 1586/QD-TTg, Oct. 24, 2012), with a key component of taking actions to ensure road safety and order through five road safety pillars introduced by the United Nations public sector management for road safety, road infrastructure, means of road transport, road users, and responses to road accidents. Based on the road safety strategy approved by the Prime Minister, MOT has been rolling out the following specific sets of activities: - Development and perfection of the legislative and regulatory framework for road safety with consistency, relevance with the current context, and the ability to meet current needs for road safety and order; particular attention was given to revising Decree No. 171/2013/ND-CP of Nov. 13, 2013, providing on penalizing civil offences in road and railway transport to the effect that increase

5 punitive levels for high-risk behaviors that may lead to road accidents, including street bike racing, riding motorcycles on freeways, drink driving and so on. - Strengthening education and law communication and dissemination on road safety and order, focusing on specific themes including wearing helmets when riding motorcycles, compliance with speed limits, slowing down and observation for safety before moving from branch roads to main roads, If you drink, don t drive, having in place proposed outlines for increasing the efficiency of education and law dissemination on road safety travelling on freeways, developing websites providing information and updates on road safety and assisting road users on freeways; - Accelerating construction in various projects, especially the upgrades and expansion of Highway 1A and Ho Chi Minh Road at the Central Highland section; improving safety features of road infrastructure; increasing inspection and monitoring of compliance with road safety rules at job sites on roads in use; holding project owners, engineers and contractors accountable for road safety, workers safety, sanitation and environment concerns during construction of road structures; addressing in time any black spots and unsafe sections on roads, railroads and inland waterways; scanning and making necessary adjustments to the signage system on roads, road safety equipment, addition of roadside rails and emergency escape lanes on roads that run through winding mountainous areas; increasing road safety assessment of new construction projects, road upgrade and rehabilitation projects and roads in use that are at high risk of unsafe travel; - Increased inspection of commercial vehicles, vehicle weight control, driver training and licensing; asking inspection centers to increase cooperation with local traffic inspectors and road police in monitoring vehicles that have passed their retire age or inspection deadline; - Upgrading the capacity and responsibility of road safety enforcement personnel; increased use of information technology in the management of commercial transportation, use of transport infrastructure, and beefing up checks, monitoring and penalizing road safety and order infringements. Above is our report on follow-ups of the comments and recommendations raised at the annual 2015 VBF. MOT will continue cooperation with relevant stakeholders to help make it easier to do business in Vietnam, and report outcomes to the Ministry of Planning and Investment for consolidation and further reporting to the Prime Minister. C/c: For the MINISTER - As listed on top; VICE MINISTER - Minister (for updates); - VM Nguyen Hong Truong; - VM Nguyen Ngoc Dong; - Government Office; - Filing: Corres., Business Administration (Tuan 02b) Le Dinh Tho