PTSC pushed off project by retracting province
PTSC pushed off project by retracting province
After the central province of Quang Binh decides to withdraw from previous commitments over the second phase of Hon La Port, the port operator Petroleum Technical Services Corporation (PTSC) is now at risk of losing the project to a domestic contender.
The Quang Binh People’s Committee and the Quang Binh Economic Zone Management Authority had plans to develop the second phase of Hon La Port, aiming to relieve the overload of the existing facility.
However, instead of authorising PTSC to develop the project as per the deal the two parties signed in 2009, the province entrusted another domestic firm operating in the province to study the project. The name of the contender has yet to be disclosed.
PTSC director Hoang Tuan told VIR that in August 2009, the province’s leadership signed a deal to transfer Hon La Port to PTSC. Under the contract, PTSC will take over the port to continue operations, exploit and invest in the following phases.
PTSC will take over the rights and duties of the former owner and benefit from local preferential polices to develop the port under the government’s sea port development plan. However, at present, the province has broken the commitment and refused PTSC to develop the second phase. The company will hold a working session with the province to work out a solution to this debacle.
“Arranging capital to develop Hon La Port is not a challenge for PTSC, thus, if the company receives the province’s approval, it will be determined to implement the project,” Tuan added.
Belying the importance of the Hon La Port extension, the Quang Binh People’s Committee and the Quang Binh Economic Zone Management Authority issued numerous incentives, including land lease fee and enterprise income tax, and other incentives in the Law on Investment to call for investors to join developing the second phase of Hon La Port.
According to Pham Van Nam, director of the Quang Binh Economic Zone Management Authority, Hon La Port is located in the economic zone (EZ), thus investors in the extension project will be accorded the highest incentives the EZ can legally provide. These benefits extend to discounts on the land lease fee and the corporate income tax, among others.
A representative of the Quang Binh Economic Zone Management Authority stated that extending Hon La Port is becoming vital because it has been operating way beyond its designed capacity of 1.2 million tonnes of cargo per year in recent years. Notably, in 2015, the port handled 1.5 million tonnes of cargo. In addition, the port is located on a strategic point along the North-South sea transport route, at a crossroads to Central Vietnam, Laos, and Thailand.
The authority plans to increase the port’s capacity to five million tonnes and extend the harbour area to receive up to 50,000 deadweight tonnage vessels. The authority estimated that the total investment capital for enhancing the port would be about VND300-400 billion ($13.2-17.6 million).
