New Lien Chieu terminal to ease Danang Port congestion

A pre-feasibility study for the project at Lien Chieu, which has a budgeted cost of roughly US$1.48 billion, is under review by City officials that want to significantly expand the Danang Port’s capacity.

The study, prepared by the engineering consulting firm of Tediport, lays out plans for the work to be completed in 3-phases of construction. The first phase projected to cost US332 million would add 1.87 million tons of capacity by 2020.

Phases two and three would increase capacity by 17.53 million tons by 2030 and 46 million tons by 2050 at incremental estimated costs of US$353 million and US$792 million, respectively.

Unfortunately, said speakers at the conference, the Danang Port is much too far away from Ho Chi Minh City to readily benefit from the overcapacity the country’s southernmost port currently is experiencing.

One of the two main terminals at the Danang Port, Tien Sa, is already operating at maximum capacity, with shippers reporting delays as well as over overloading at storage warehouses in the region.

Ground was broken on a US$49 million project last July to bump up the capacity of the Tien Sa terminal to 12 million tons of cargo per annum and enable it to handle container ships with deadweight tonnage of 70,000.

Official figures showed the terminals at the Danang Port handled a combined 146,000 twenty-foot-equivalent units in the first half of this year, a 19% on-year rise against the same six-month period in 2015.

A record setting 6.5 million tons of cargo passed through the port for the whole of 2015, said speakers at the conference.

The pre-feasibility study proposed that the new Lien Chieu terminal be developed on a public private partnership basis with funding provided by a combination of funding from the city of Danang along with bank loans and ODA.

The study is not clear which country would provide the ODA for the project but speakers at the conference suggested Japan as the most likely prospect to provide the required funds.

Their rational was that the Japan International Cooperation Agency (JICA), agreed last April to provide US$781 million for additional port and road infrastructure at the Lach Huyen deep-water port in the northern city of Haiphong.

The northern region is home to numerous Japanese foreign-invested manufacturing companies that would benefit from the Haiphong port expansion scheduled to open in May 2018, said the JICA in explaining its reasoning for providing the funding.

A similar line of reasoning would apply to the Lien Chieu terminal, said the speakers, as the central region is heavily invested by Japanese businesses who would readily benefit from the expanded capacity.

Vietnam is expected to continue to lead Asian trade growth over the coming decades, said the speakers, noting several forecasts that have projected solid growth for the next two decades.

These projections combined with those forecasting record growth among ASEAN show sufficient cargo volumes would be available to justify the large infrastructure and port investment in the Lien Chieu terminal.

The decision to move forward with the project by the government is prudent, the speakers at the conference concluded.