‘Savings banks’ proliferate in response to State Bank curb on ‘branches’

Over the last two months, many commercial banks have been opening ‘saving banks,’ a move perceived as a way to expand even though the State Bank (SBV) has tightened controls over the opening of full service branches. The savings banks only accept deposits; they do not make loans.

Saigon Commercial Bank (SCB), Techcombank, Vietnam Tin Nghia and Maritime Bank have all opened savings bank subsidiaries in HCM City

A savings bank only accepts deposits, delivers valuable papers for the parent bank, pays out kiều hối remittances from the overseas Vietnamese relatives of clients and wires funds. If customers want a loan, the savings bank can report the cases to the parent bank. Commercial banks see the savings bank model as a way to increase their presence in HCM City.

A branch director of a Hanoi-based bank commented that banks now barred from opening more full service branches are opening savings banks that they hope to upgrade into branches when there are favourable conditions.

Because savings banks it is easier to obtain permission from the watchdog agency to open them, especially in Hanoi and HCM City.

An official of the HCM City Branch of the State Bank said that SBV has decided that it will not allow banks that already have many branches in Hanoi and HCM City to open more. SBV is drafting an instruction which stipulates stricter requirements on the network operations of commercial banks.

To open a savings bank, commercial banks need only register its opening with the SBV branch where the savings banks are situated. Also according to the official, the requirements are easy and no limit has been set on the number of savings banks a bank can open in a city.

Experts say they do not see any risks in the boom of savings bank. However, the Vietnam Banking Association expresses concern over the rapid expansion of some banks’ networks. The association warns that a high density of banks in some areas will lead to unhealthy competition to attract customers.

Source: Thoi bao Kinh te Saigon

Power generators says it’s high time to raise electricity prices

VietNamNet Bridge – During a midyear review at the Ministry of Industry, power sector chieftans called on the Government to raise electricity tariffs, saying that the current low tariffs dissuade enterprises from investing in power generation.

General Director of the Vietnam Coal and Mineral Industries Group Tran Xuan Hoa said that Vinacomin is considering developing its own power grid in the Quang Ninh coal mining area to ensure the safety of production now troubled by regular electricity cuts.

Dao Van Hung, Chairman of the Electricity of Vietnam (EVN), citing ‘world experience,’ asserted that every dong of underspending on power causes at least three dong of real and intangible costs to Vietnam’s society. Continued power shortages will threaten Vietnam’s ability to reach other targets, including the 2010 target of 6.5 percent growth.

Hung called the electricity shortage the consequence of an average electricity price so low that investors refuse to make investment in power projects.

Currently, power producers are paid just 5.3 US cents (1058 dong) per kwh, much less than producers nearby regional countries. Investors insist that they must have a guaranteed offtake price of at least 8 cents.

Under fire for mismanagement of power shortages this year, EVN has consistently blamed ‘bad weather.’ Hung’s stance is a considerable turn-around. There now appears to be an industry consensus that it is high time to reconsider the power pricing scheme. “With power prices set so low, we cannot attract investment in power projects,” Hung said.

“We may consider subsidizing electricity costs for poor people, but if we do not adjust the general power price, the nation’s plans for power project development will not be fulfilled,” said CEO Hoa of Vinacomin.

Hung, the EVN CEO, said that in the context of the increasingly high demand and serious drought, the national electricity monopoly has mobilized power from all available sources to sustain production and support the people’s life. It has had to buy power from some sources at high prices. In the last six months, EVN’s losses have totalled 4700 billion dong (about $250 million).

Hung emphasized that the current electricity shortage is not a result of EVN’s monopoly control of the sector.

He reported that EVN has equitised nine power plants, including Cat Ba, Pha Lai, Vinh Son-Song Hinh, and Vung Ang. EVN now has 18 power of Vietnam’s 40 plants and accounts for only 47 percent of Vietnam’s power generation capacity. This will fall to 37.5 percent of the total capacity by 2015. Independent power producers including TKV and PetroVietnam will account for the rest.

Also according to Hung, it is necessary to establish a national power authority to purchase and sell electricity. It should belong to a state agency instead of EVN. In that case, EVN will not hold the monopoly in powergeneration and power distribution any more.

When asked why EVN does not purchase more electricity from independent thermal power producers, Hung said that EVN wants to purchase electricity, but the problem here is the price. If EVN purchases power at high prices, it will have to sell power at high prices which will burden businesses and people.

It is planned that from 2013, Vietnam will begin to import coal. “The question here is whether power companies will have the money to purchase coal at high prices. It is necessary to harmonize the prices of coal to be imported and the prices of electricity to be sold,” Hung said.

Source: Dan tri

• Goods getting stuck because drivers have no FC lic...
• Senator Harkin vows to seek more help for Vietname...
• Elite Hanoi hotels reduce rack rates

Goods getting stuck because drivers have no FC licenses

The transport of goods in many localities of the country has become stagnant because many truck drivers do not have FC licenses as required by the Ministry of Transport.

Under a new decision, released by the Ministry of Transport on July 1, 2010, all truck drivers must have a new kind of driver’s license—an FC license.

Dragon fruits cannot be sold because of lack of FC licenses

According to gardeners and dragon fruit export companies in Binh Thuan province, since July 1, when the decision took effect, the volume of dragon fruits carried to the north and exported to China has dropped by 30 to 40 percent.

It is now the highest point in dragon fruit harvesting season. However, enterprises have announced they would not collect dragon fruit from farmers any more, because they still have hundreds of tonnes of dragon fruit in stocks. The problem is that most truck drivers do not have FC licenses as required. Therefore, many trucks have to stay idle, and only a few trucks can carry dragon fruit to other provinces to sell. As the result, gardeners cannot sell the products.

The owners of enterprises now have to move heaven and earth to look for truck drivers who have FC licenses. However, there are only a few drivers who have licenses.

Hieu Ngoc Enterprise in Binh Thuan province, for example, has 10 trucks and 20 drivers who specialize in carrying dragon fruit for HIeu Ngoc itself and providing services to other enterprises. However, as only two of the drivers have FC licenses, the other 18 drivers have to stay off work.

Meanwhile, in Binh Thuan province, there is only one center which trains vehicle drivers. The center will only be able to organize the test to grant FC license in September 2010.

According to the Binh Thuan Police, there are some 800 truck drivers in the province, and only 30 percent of them have FC licenses. Therefore, most of the drivers now have to sit idle until they can get them.

Goods getting stuck, businesses suffer

In Hai Phong port city, the goods transport has become stagnant after the decision on requiring FC driving license took effect.

Pham Thi Thu Huong, Deputy Director of Hoang Nga Transport, said that the company only has two drivers who have FC license, therefore, only two trucks can carry goods, while 30 other trucks have been laying idle. Huong said that the total expenses for the 30 idle trucks may reach 15 million dong. Meanwhile, the company cannot fulfill the orders of clients.

Similarly, Nam Duong Transport Company has 11 trucks, but only one driver has FC license. In order to fulfill the orders of clients, on July 1, the company had to hire three trucks to carry goods. Representativeof the company said that it loses seven million dong per day because of the 10 trucks that have been left idle.

Ly Lien Binh, Deputy General Director New Hope Company, said that the company needs to import nearly 20,000 tonnes of materials a month. If the transport stagnation cannot be improved, the company will lack materials for production.

At Chua Ve port, goods have been stuck because of no container lorries to carry goods. Vu Nam Than from Chua Ve Container Loading and Unloading Company said that from June 28 to July 4, the port received 9,027 TEUs, but only 5,019 TEUs have been cleared. A total of 11,300 TEUs have been left sitting at the port.

Source: Saigon tiep thi

• Elite Hanoi hotels reduce rack rates
• Luxury cars find plenty of buyers
• Vietnamese keen on iPhone 4
• Police to check pre-paid mobile subscribers

Senator Harkin vows to seek more help for Vietnamese Agent Orange victims

Four American senators are visiting Danang to check up on the Agent Orange clean-up there.

Iowa Senator Tom Harkin, who as a young US Congress staffer discovered the infamous “tiger cages” at the Saigon regime’s Con Dao island prison, talked with Tuoi Tre before he and three other American senators made a July 6 field trip to Da Nang, a hot-spot for Agent Orange in Vietnam.

Tuoi Tre: We’ve heard that you struggled for Vietnam-US relation normalization before 1995. . . .

Senator Tom Harkin: There were many difficulties over a long period of time. Many Americans didn’t want to establish diplomatic relations with Vietnam because of the previous war, but President Bill Clinton made normalization and establishment of diplomatic ties with Vietnam a priority. Our first ambassador to Vietnam (Pete Peterson) was a former war prisoner in Vietnam. He likes and loves Vietnam and the Vietnamese people very much and exerted great effort for the bilateral relationship.

Many American didn’t want to set up ties with Vietnam but the Ambassador, a former war prisoner, talked positively about Vietnam and it had influence on many people.

Tuoi Tre: Are you going to visit Da Nang because it’s a dioxin hot-spot?

Harkin: That’s my concern. We Americans conducted a chemical war which perhaps didn’t directly aim to humans but it turned out spraying Agent Orange defoliant can cause prolonged effects on people. My colleagues in the Senate have agreed to allocate funds each year to clean up hot-spots in Da Nang, Bien Hoa and Hue. We’re trying to increase that amount.

Tuoi Tre: But besides dioxin hot-spots, we still have 3-4 million AO victims!

Harkin: I know. That will be the next step. I think we will have to do something for victims. We know dioxin persists in the food chain and affects humans. It is a fact that in the US, the Department of Veterans has compensated AO victims who suffer from cancers, blood cancer, Parkinsons, etc., around 15 diseases believed related to their exposure to AO, but not for any cases of disability.

The thing I want to do is to help victims in Vietnam who suffer from AO-related diseases (those recognized in the US) obtain compensation as American victims. The fund for Vietnamese AO victims is now around $3 million a year. We are tryng to raise it to $20-30 million a year. The Ford Foundation is working well in this area.

Tuoi Tre: Our nations established diplomatic ties in July 1995. What do you think about the upcoming 15^th anniversary?

Harkin: In the last 15 years, the relationships between the two countries have developed strongly, especially in trade and economic exchange. The US is Vietnam’s top export market. Though there are some issues with fish, shrimp, etc. but I think everything will be fine. We have very good relations now. Many overseas Vietnamese have returned Vietnam to visit their families.

We will go to Da Nang with an American Viet kieu doctor. He was born there but he left Vietnam at the age of one. He will see his uncle in Da Nang the first time. Our next consul general in HCM City will be a Vietnamese-American. I think it is very good. Vietnamese in the US are participating more in business, health and the military services.

Source: Tuoi Tre

Elite Hanoi hotels reduce rack rates

Rates advertised by high grade hotels in Hanoi in the second quarter of 2010 were twelve percent below their rates a year earlier. The biggest drop is at the five star level.

Demand is strong. The number of Vietnamese travelers to Hanoi in the April-June period reached 1.85 million, up 33 percent over 2Q09. Foreign visitors totaled nearly 300,000, up 32 percent. tourists came to Vietnam, increasing by 32 percent in comparison with the second quarter of 2009.

CBRE, a real estate service provider, reports that multi-star hotels in Hanoi have seen considerable improvement in room occupancy; 54.5 percent of their beds were filled, 10.3 percent better than a year earlier. Four star hotels gained a full 14 percent, to 53 percent occupancy.

Even though demand’s up, room rates are generally down. High grade hotels are now charging about $75 per night on average. In the 2^nd quarter of 2009, they charged nearly $84.

At five star hotels, a guest will be pampered for a mere $120 per night, over twenty percent less than a year earlier.

At the three star level, rack rates are up a bit, however, and average $39 per night.

A CBRE executive says that the Hanoi hotel market still has great potential. “The Hanoi 1000 year anniversary festivities in October will increase the number of tourists,” he said. Many international hotel management groups are seeking investment opportunities in Vietnam, including Accor, InterContinental and Marriott.

A survey by the Grant Thornton firm has not surprisingly reported that 2009 was a difficult year for Vietnam’s hotels. Afflicted by the global financial crisis and an eleven percent drop in foreign visitors, most saw reductions in room occupancy and in profit. By Thornton’s estimate, the average charge per room at luxury hotels fell 32 percent in 2009.

Source: VnExpress

• Luxury cars find plenty of buyers
• Vietnamese keen on iPhone 4
• Police to check pre-paid mobile subscribers

Luxury cars find plenty of buyers

Though they retail for four billion dong ($220,000) or so, the Porsche Cayenne S2011, BMW X6 and Mercedes S550 are selling well in Vietnam.

LookAtVietnam - Though they retail for four billion dong ($220,000) or so, the Porsche Cayenne S2011, BMW X6 and Mercedes S550 are selling well in Vietnam. The newest models of luxury cars arrive at Saigon Port every week, only a few months after their launch onto the world market, reports the HCM City newspaper, Tuoi Tre.

Car importers confirm that the number of ‘super cars’ imported to Vietnam over the last few years has risen significantly. Most luxury brands now have sales agents and distributors in Vietnam.

‘Special care’

Rolling out the new Audi Q5 model in HCM City recently, Director General Laurent Genet of A Chau Company, the authorized distributor of Audi series in Vietnam, commented on the Audi’s remarkable success in Vietnam. The brand name has developed very rapidly, faster than in countries where Audi has been present for the last many years.

Genet says Audi now puts Vietnam on a par with other regional developed countries, and Audi headquarters in Germany gives the Vietnam market ‘special care.’

Audi’s Q5, introduced in Vietnam with a sticker price of 1.84 billion dong, has been selling so well that eleven cars headed for the Philippines have been rerouted to HCM City. People who ordered the Q5 in May must wait till August for delivery.

General Director Tran Tan Trung at Lien A International, an Audi distributor, says sales have doubled this year. “Our clients are typically 21 to 35 years-old, Trung adds.

Then there’s the Maybach 62S supercar. Of the four $500,000 Maybach 62S sedans built so far in 2009, it’s said, two – one white, one black — have shown up in HCM City.

For those interested in something a little more sporty that also screams ‘money,’ four black Ferrari 458 Italia two-seaters are reportedly enroute to Vietnam where, after tax is applied, they’ll sell for $600,000.

Double digit growth rates

Among the 23,000 fully-assembled autos imported in the first half of 2010 – costing the nation some $394 million in foreign exchange — it seems that hardly any luxury cars were overlooked. At an exhibition in May, many people paid attention to the two seat Mercedes SLS gullwing AMG selling, after taxes, for 8.4 billion dong ($462,000).

Car dealers said that the car was imported by Mercedes Benz Vietnam for a young client who then changed his mind. However, the importer had no trouble finding another buyer. In May, as soon as it introduced models priced from 1.4 billion to 4 billion dong, Mercedes Benz signed 100 contracts.

Further, after introducing the Model E 250 CGI BlueEfficiency last December, Benz sold 200 of the 1.7 billion dong ($87,000) sedans within two months. Similarly, Euro Auto, the importer of BMW cars, claims to have sold 50 Series 5 sedans priced at 1.9-2.3 billion dong.

The importers and distributors of these luxury cars are on a roll. They say that the business plans set for the Vietnam’s market can always be fulfilled. As proof, they point to double-digit sales growth even in 2009, a difficult year for they world economy.

Source: Tuoi tre

Vietnamese keen on iPhone 4

Some mobile shops in Hanoi and HCM City have sold Apple’s new model iPhone 4G at the price of $2500, three times higher than the price in Britain and Japan.

VietNamNet Bridge – Some mobile shops in Hanoi and HCM City have sold Apple’s new model iPhone 4G at the price of $2500, three times higher than the price in Britain and Japan.

PhoneGee Manager Phong admitted that current prices for iPhone 4 16GB and 32GB at his company are $1800 and $2000. He estimated that around six customers visit PhoneGee daily to ask for iPhone 4 and two of them decided to buy. Thoughthe price is very high, the firm doesn’t have enough products to sell.

Nguyen Ngoc Minh, who owned one of the first in Vietnam, commented: “I have been using Apple equipment at work and for entertainment for a long time. Whenever Apple’s new products appearin Vietnam like iPad or iPhone I would immediately buy one. The prices for these products are much higher than their true value, but I’m satisfied with them because they are top hi-tech products that many people in the world desire.”

In Hanoi, iPhone 4 (international version) is priced lower than in HCM City, ranging from $1600 to $1800.

On Ba Trieu street, iShop Deputy Director Tuan confirmed that his company has received a dozen orders for iPhone 4. The prices are very high, Tuan added, because they are imported from the UK and Japan.

Moreover, iPhone 4 is scare owing to Apple’s policy of restricting two phones per customer. Tuan predicted that once this product is distributed in many Asian countries in late July, its price will drop.

For many Vietnamese, it is not too extravagant to pay nearly $2000 to own the “hottest” technology in 2010.

PV

Vietnam, EU conclude the eighth round of PCA talks

Vietnam and the European Union wrapped up the eighth round of a new Partnership and Cooperation Agreement (PCA) in Hanoi on July 5.

High on the agenda of the two-day talks were a number of important articles of the agreement, including migration, legal cooperation, market economy status, Generalized System of Preferences, taxation, labor and employment.

The two sides did not reach an agreement in a clause relating the EU’s recognition of the Vietnamese market economy.

Both sides are moving to ratify the new PCA, which will supplant the earlier agreement, drawn up in 1995.

If the PCA is signed this year, it will be even more significant, as the year marks the twentieth anniversary of Vietnam-EU diplomatic ties and the fifteenth anniversary of the Framework Agreement on Vietnam-EUCooperation, said James Moran, the head of the EU delegation.

He said the two sides would still have to negotiate several issues like migration, human rights and legal cooperation.

The Vietnamese delegation was led by Deputy Foreign Minister Bui Thanh Son.

Vietnam and the EU concluded the first round of talks on the PCA in June 2008.

Ties between the two have shown marked growth since the establishment of diplomatic relations in 1990. The EU is now one of Vietnam’s top trading partners and, as a bloc, is one of the biggest providers of Official Development Assistance to the country.

Source: Tuoi Tre

Police to check pre-paid mobile subscribers

The Ministry of Information and Communications will cooperate with the Ministry of Public Security to verify the personal information of pre-paid mobile subscribers in big cities.

LookAtVietnam - The Ministry of Information and Communications (MoIC) will cooperate with the Ministry of Public Security to verify the personal information of pre-paid mobile subscribers in big cities, confirmed Deputy Minister Le Nam Thang.

According to MoIC statistics, 100 percent of pre-paid mobile subscribers have registered their personal information with operators, but Deputy Minister Thang claimed accuracy is a big problem.

MoIC will work with the Public Security Ministry this week to seek measures for controlling information of pre-paid mobile subscribers in Hanoi, HCM City and Da Nang, because these cities account for over 50 percent of total subscribers.

MoIC and local Departments of Information and Communications will tighten management and punishment over violators.

“We will have measures to define the accuracy of information and to manage pre-paid mobile subscribers,” confirmed Telecommunications Department Chief Pham Hong Hai.

PV