HCMC customs unlikely to meet tariff collection target

HCMC – The full-year target for import-export tax revenue, VND102.5 trillion (US$4.5 billion), has proven to be an impossible mission for the HCMC Department of Customs as it had collected only VND99.7 trillion as of on December 29.

The figure is expected to reach VND100.7 trillion by 4:30 p.m. on December 30, said Nguyen Quoc Toan, deputy head of the department’s import-export tax division.

The Ministry of Finance and the department have made efforts to boost tax collections such as requesting customs officers to work on weekends and encouraging enterprises to pay taxes earlier than due dates.

Realizing this year’s tax collection target is now a tall order for the department as the goal is much higher than the objective and result of last year, which were VND90 trillion and VND93.93 trillion respectively.

Tax collections have become unpredictable over the past year due to choppy export and import activities.

Import-export tax revenue stayed at VND29.45 trillion by late April, less than 30% of the year’s target, before it grew strongly to VND74 trillion by end-September, 72.2% of the target for 2016, and fell significantly the next month.

Source The Saigon Times

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Special mechanism for Long Thanh airport project gets thumbs-up

HCMC – Prime Minister Nguyen Xuan Phuc has told the Ministry of Transport to design a special compensation, support and resettlement mechanism for the Long Thanh airport project in Dong Nai Province, the Vietnam News Agency reports.

The ministry should coordinate with the Ministry of Natural Resources and Environment, the government of Dong Nai Province, and relevant agencies to map out a plan for compensation, support and resettlement, treat it as a separate component, and report results to the PM.

The special plan should be submitted to the National Assembly (NA) before the NA passes the feasibility study for the big-ticket airport project.

The Transport Ministry will work with authorities of Dong Nai to devise a policy framework for compensation and resettlement assistance.

The project would affect around 4,700 households with nearly 15,000 people in Binh Son, Suoi Trau, Cam Duong, Long An, Long Phuoc and Bac Can communes.

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Around 40 kilometers from HCMC and 30 kilometers from Bien Hoa City, the airport would meet 4F standards of the International Civil Aviation Organization (ICAO).

Phase one of the project is scheduled to get off the ground in 2019, with one runway and one terminal to be put into operation by 2025 to handle 25 million passengers and 1.2 million tons of cargo a year.

One more runway and terminal would be built in the second phase to increase the airport’s annual capacity to 50 million passengers and 1.5 million tons of cargo. The airport would handle 100 million and five million tons a year after phase three is complete.

More than VND336.76 trillion (over US$16 billion) will be needed for the project, including nearly US$5.5 billion for the first phase. The funding will be sourced from the State budget, official development assistance (ODA) loans, investment of enterprises, proceeds from equitization of State-owned enterprises and other sources.

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Chinese contractors sue Vietnam hydropower project owner

HANOI - A consortium of Chinese contractors has filed a case against the Vietnamese owner of the Upper Kon Tum hydroelectric project for termination of the contract, according to a report which the Government has passed to the National Assembly.

The report deals with two hydropower projects – Song Bung 4 and Upper Kon Tum. Vinh Son-Song Hinh Hydropower JSC (VSH) is the owner of the Upper Kon Tum hydropower project on the Dak Nghe River, the upstream tributary of the Sesan River.

The consortium comprising East China Investigation and Design Institute under China Hydropower Engineering Group and China Railway 18th Bureau Group has sent a petition against VSH to the Vietnam International Arbitration Center (VIAC).

This move comes after VSH cancelled the contract with the Chinese contractors and reclaimed the entire contract execution and advance payment guarantees.

The termination of the contract resulted from “serious delays” in the construction of the plant and power lines, as well as from the “unfriendly behavior” of the contractors, says the report.

VIAC set May 23, 2016 as the date for verbal argument, with a ruling by the arbitration council expected to come out by the end of this year.

Due to the complexity of the case, the completion of necessary papers, the gathering of evidence and the addition of legal documents must be sufficiently and carefully done. The verbal argument was rescheduled to April 20, 2017, and the ruling is expected in the middle of next year.

The Government says in the report that after the Chinese contractors filed the case, VSH filed a self-protection statement and a proposal to VIAC seeking arbitration in the consortium’s breach of contract terms.

VSH signed a legal consulting service contract with local and international law firms, namely YKVN Singapore with a branch in Vietnam and EP Legal Vietnam. After a review of the records, the two legal consultants proposed VHS invite Singapore’s Drew & Napier LLC to join the case.

VHS is now working with counsels over evidence and documents to prepare a testimony.

The Government said this case is complex with many potential risks. Since the ruling of the arbitration council is slated for mid-2017, the progress and efficiency of this project will be certainly affected.

The Government report notes that VHS has reassessed the remaining workload for the power transmission lines and hydropower plant, which is actually the job of the Chinese contractors. Currently, new contractors have taken over the job of constructing the transmission lines and plant.

The Government says the total investment cost of this project is VND7.4 trillion.

Source The Saigon Times

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Experts present three scenarios for property market next year

Experts, speaking at a conference in Hanoi on Tuesday, gave three scenarios for the 2017 domestic property market, with the most likely one being that the market will move sideways. The other two scenarios are that the market will continue growing, which are the least probable, or will go down.

The conference on prospects for the real estate market next year was held by Nha Dau Tu magazine, the Vietnam Real Estate Association (VNREA) and Dau Tu newspaper in Hanoi on Tuesday.

Tran Kim Chung, vice president of the Central Institute for Economic Management (CIEM), told the conference that the property market would cool in the coming time as speculation has eased.

Chung said certain housing projects with a strong financial position remain attractive to homebuyers. However, real estate credit will drop since banks are tightening short-term capital for the property sector.

He said big-ticket projects costing VND5 trillion (US$224.2 million) or VND7 trillion or VND10 trillion each will become rare next year compared to 2016.

Chung suggested three scenarios for the 2017 real estate market.

First, it will be better than in 2016, which is desired by many. The scenario will only become a reality if the global economy grows well and does not enter a recession and Vietnam’s economic growth reaches its peak. Chung said this scenario would unlikely happen.

Second, the property market will move sideways with some segments plunging and some others edging higher. Chung said this is the most likely scenario but the market structure will change.

Third, the real estate market will cool if the world economy remains unstable and Vietnam’s economy faces unfavorable developments.

Do Thu Hang of Savills Vietnam said housing supply next year will stay high in both Hanoi and HCMC. Many more social housing projects will come on stream to meet rising demand of middle-income people and workers at industrial parks.

Of some 2.6 million workers at industrial parks, 75% are migrants, 75% are under 35 years old, and they have annual income of US$2,500 on average. They are potential customers of the social housing market, Hang said.

Chung of CIEM said the social housing segment would be the spotlight of the property market next year. However, the segment needs the Government’s supporting policies to grow.

Nguyen Manh Ha, vice chairman of VNREA, said the real estate market will remain stable in 2017 with the low-end and social housing segments performing better.

He said growth in the social housing and mid- and low-end segments will be impacted by State policies. Meanwhile, the shop-house and villa segments will continue attracting clients as many homebuyers prefer an independent house to an apartment.  

Source The Saigon Times

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Thailand may slap anti-dumping tax on Vietnam steel sheets

HCMC – Thailand may impose anti-dumping tariffs of up to 60.26% on color-coated steel sheets imports from Vietnam, according to the Vietnam Competition Authority under the Ministry of Industry and Trade.

The Department of Foreign Trade (DFT) under the Thai Ministry of Commerce on December 12 released preliminary results of an anti-dumping probe into Vietnam’s color-coated steel sheets, including painted hot-dip galvanized cold rolled steel, or aluminum zinc alloy-coated cold rolled steel, with dumping margins expected to range from 4.51% to 60.26%.

DFT will give relevant businesses and agencies from Vietnam a chance to respond to the investigation results and send evidence to the department by January 6 before a hearing is organized on January 16.

The Thai agency said it had got a dumping investigation petition from NS BlueScope Company for an alleged dumping margin of up to 89.58% in September last year.

Statistics of the Vietnam Competition Authority show that the country’s exported steel products are subject to most anti-dumping lawsuits. As of May 2016, there had been 25 trade cases against Vietnam’s steel products, of which 18 were anti-dumping ones initiated by ASEAN nations like Thailand and Malaysia.

Earlier, the Vietnam Steel Association had requested producers of metallic-coated and color-coated steel sheets to reduce their export shipments and control selling prices to the Malaysian and Thai markets for risks of anti-dumping measures.

Steel firms of these two nations have repeatedly complained about huge volumes of Vietnam’s steel products imported into their countries at low prices, adversely affecting their production.

Source The Saigon Times

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Construction ministry warns against resort real estate glut

HANOI – Investors should be cautious in resort real estate projects as the strong growth of resort real estate this year may lead to an oversupply in the future, the Ministry of Construction advised.

Resort real estate has developed strongly since 2015 with many projects mainly in Danang, Khanh Hoa and Phu Quoc opened for sale, said Pham Van Truong, head of the real estate market management office under the ministry’s Department of House and Real Estate Market Management at a review conference on the real estate market in 2016 and market trends in 2017 held by the Vietnam Association of Property Brokers last Friday.

Many resort projects have been licensed in the coastal provinces. Particularly, there were 46 licensed projects covering more than 3,000 hectares in Khanh Hoa Province and 75 licensed projects occupying more than 2,000 hectares in Vung Tau.

If all of these projects are completed, there will be hundreds of thousands of villas, leading to an oversupply in the market, Truong said.

Nguyen Quoc Khanh, board chairman of DTJ Investment and Distribution Joint Stock Co., said at the conference that resort properties have boomed this year. The number of projects opened for sale has increased sharply this year while last year saw only one to two projects put up for sale.

There have been only two projects opened for sale in Danang and Lao Cai in the fourth quarter this year, the lowest quarterly number in 2016, but in the third quarter, there were as many as 11 projects opened up for sale in Khanh Hoa, Danang and Quang Ninh.

This year has witnessed the recovery of the resort real estate market and a boom in the sector in three major destinations namely Danang, Nha Trang, and Phu Quoc. Some 35 projects with 12,000 apartments and 2,000 villas have been offered for sale, Khanh said.

Source The Saigon Times

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