study on economic partnership projects in developing ... · this report summarizes the result of...

Study on Economic Partnership Projects in Developing Countries in FY2016

Study for Lien Chieu Port Development Project in Vietnam

Final Report

February 2017

Prepared for: Ministry of Economy, Trade and Industry

Prepared by: Japan Port Consultants, Ltd.

The Overseas Coastal Area Development Institute of Japan

Preface

This report summarizes the result of the “Study on Economic Partnership Projects in Developing Countries in

FY2016” that was entrusted by the Ministry of Economy, Trade and Industry (METI) to Japan Port Consultants,

Ltd. and The Overseas Coastal Area Development Institute of Japan.

Tien Sa port area in Da Nang Port located in Da Nang City in the Central Region of Vietnam has been suffering a

chronical inconvenient situation of having to wait for ships to depart and facing a dangerous condition in the

terminals where cargo handling vehicles and passengers are intersecting each other, all these being due to the

delay in constructing port facilities capable to respond to the demand for container cargo and international

passengers, demand which has been increasing rapidly in recent years.

This “Study for Lien Chieu Port Development Project in Vietnam” has aimed to investigate the possibility of

materializing a project to construct a new port in Lien Chieu port area located in the opposite side of Tien Sa port

area across Da Nang Bay, with a view to mitigating concentration of cargo in Tien Sa and solving the

above-mentioned problems, project which will involve approximately 28.7 billion JPY (project cost estimated in

the Pre-Feasibility Study implemented by Da Nang City People’s Committee). The Study contemplates utilization

of Japanese high-quality technology for construction of breakwater, as well as knowhow of Japan’s representative

port city – Yokohama for port and harbor planning, maintenance, administration and operation, and urban

development.

In view that Lien Chieu port area is located in the west side of Da Nang City, which allows a direct access to the

existing industrial parks and main highways in the outskirts without passing through the downtown area in the

east side of the city or sightseeing areas, METI Study Team is convinced that this project, once realized, will

contribute not only to improve the environment of Da Nang City, but also to enhance the efficiency of physical

distribution for the companies operating in Da Nang City including approximately 100 Japanese companies

engaged in the manufacturing, tourism and IT industries.

METI Study Team hopes that the Study will be instrumental in materializing the above-mentioned project and

serve as a helpful reference for people concerned.

February 2017

Japan Port Consultants, Ltd.

The Overseas Coastal Area Development Institute of Japan

Project Location Map

Locations of Da Nang Port Areas

Source: METI Study Team

Location Map of the Project Site

Source: Pre-Feasibility Study (TEDIPORT, December 2016)

Phase I Phase II Phase III

Scale: 300m

Access Road

Lien Chieu port area

(Project Site)

Tien Sa port area Tho Quang port area

Song Han port area

Da Nang

Hoa Khanh Industrial Zone

Lien Chieu Industrial Zone

Scale: 5km

Abbreviations

Abbreviation Official Names

ADB Asian Development Bank

ASEAN Association of South-East Asian Nations

CFS Container Freight Station

CKEZ The Central Vietnam Key Economic Zone

DONRE Department of Natural Resources and Environment

DWT Deadweight Ton

EIA Environment Impact Assessment

EIRR Economic Internal Rate of Return

FIRR Financial Internal Rate of Return

GDP Gross Domestic Product

HIV Human Immunodeficiency Virus

HWL High Water Level

JICA Japan International Cooperation Agency

JPY Japanese Yen

LWL Low Water Level

METI Ministry of Economy, Trade and Industry

MONRE Ministry of Natural Resources and Environment

MOT Ministry of Transport

NH National Highway

ODA Official Development Assistance

OECF The Overseas Economic Cooperation Fund

PIANC International Navigation Association

PMU85 Project Management Unit 85

PPP Public Private Partnership

RTG Rubber-Tyred Gantry

SAPROF Special Terms for Project Formation

SPC Special Purpose Company

STEP Special Terms for Economic Partnership

TEU Twenty-foot Equivalent Unit

VINALINES Vietnam National Shipping Lines

VINAMARINE Vietnam Maritime Administration

VND Vietnamese Dong

Contents

Preface

Project Map

Abbreviations

Table of Contents

Executive Summary

Chapter 1 Overview of the Host Country and Sectors..............................................................................................1 1. Economic and fiscal conditions of the host country .........................................................................................1

Economic situation .................................................................................................................................... 1 1.1

Fiscal conditions ........................................................................................................................................ 2 1.2

2. Outline of project’s target sector ......................................................................................................................4 Port classification in Vietnam .................................................................................................................... 4 2.1

Outline of Vietnam’s Ports ........................................................................................................................ 5 2.2

3. The situation of target area ...............................................................................................................................7 Outline of respective port areas constituting Da Nang Port ...................................................................... 9 3.1

Cargo handling volume of Da Nang Port ................................................................................................ 11 3.2

Operating schedule of ocean liners at Da Nang Port ............................................................................... 11 3.3

Chapter 2 Study Methodology ................................................................................................................................15 1. Contents of the Study .....................................................................................................................................15 2. Method and system of study ...........................................................................................................................16 3. Schedule of the Study .....................................................................................................................................18

Chapter 3 Justification, Objectives and Technical Feasibility of the Project ..........................................................21 1. Project background, necessities, etc. ..............................................................................................................21 2. Basic policy, decisions, etc. ............................................................................................................................23

Port development Master Plans ............................................................................................................... 23 2.1

Lien Chieu Port Development Project ..................................................................................................... 24 2.2

3. Project outline .................................................................................................................................................26 4. Various study items required for the Project ..................................................................................................28

Demand forecast ...................................................................................................................................... 28 4.1

Port planning ........................................................................................................................................... 37 4.2

Terminal planning for Lien Chieu port area ............................................................................................ 40 4.3

Access road planning ............................................................................................................................... 48 4.4

Port facility design ................................................................................................................................... 65 4.5

5. Effects on the stable supply of energy in Japan as a result of project implementation...................................71 Reduction of CO2 and NOx emissions .................................................................................................... 71 5.1

Effects on the reduction in the use of fossil fuel ...................................................................................... 72 5.2

Effects on the stable supply of energy in Japan ....................................................................................... 72 5.3

Chapter 4 Evaluation of Environmental and Social Impacts ..................................................................................74 1. Analysis of current environmental and social situation ..................................................................................74

Environmental contamination .................................................................................................................. 74 1.1

Natural environment ................................................................................................................................ 75 1.2

Social environment .................................................................................................................................. 76 1.3

Future development plan ......................................................................................................................... 77 1.4

2. Environmental Improvement Effects of the Project Implementation .............................................................77 Improvement of traffic congestion .......................................................................................................... 77 2.1

Improvement of the safety of port operation ........................................................................................... 78 2.2

Creation of employment opportunities .................................................................................................... 78 2.3

3. Environmental and Social Impacts of the Project Implementation · ..............................................................79 Potential impacts on environment ........................................................................................................... 79 3.1

4. Outline of Vietnamese Laws on Environmental and Social Considerations and Compliance Measures .......90 Environmental administration of Vietnam .............................................................................................. 90 4.1

Outline of Vietnamese environmental laws ............................................................................................. 90 4.2

5. Responsibilities of the Host Country for the Realization of the Project .........................................................93 Implementation of ESIA (Environmental Social Impact Assessment) study and information disclosure5.1

......................................................................................................................................................................... 93 Acquirement of approval of EIA and relevant environmental permits .................................................... 93 5.2

Chapter 5 Financial and Economic Evaluation ......................................................................................................94 1. Project Cost Estimation ..................................................................................................................................94 2. Outline of the results of preliminary financial and economic evaluation .......................................................96

Financial Analysis ................................................................................................................................... 96 2.1

Economic Analysis ................................................................................................................................ 109 2.2

Chapter 6 Planned Project Schedule ..................................................................................................................... 114 1. Opening time of Lien Chieu port area .......................................................................................................... 114 2. Phased construction plan for Lien Chieu port area ....................................................................................... 116

Case scenario in which MOT becomes the project owner. .................................................................... 116 2.1

Case scenario in which Da Nang City People’s Committee becomes the project owner ...................... 118 2.2

Implementation schedule of the Project................................................................................................. 120 2.3

Chapter 7 Implementing Organization ................................................................................................................. 123 1. Outline of Organizations .............................................................................................................................. 123

Ministry of Transport............................................................................................................................. 123 1.1

Da Nang City People’s Committee........................................................................................................ 124 1.2

2. Project Implementation Agency ................................................................................................................... 125 3. Organizational Project Management Capability ........................................................................................... 126

Port Development Project Experience ................................................................................................... 126 3.1

Measures for Successful Port Management ........................................................................................... 127 3.2

Chapter 8 Technical Advantages of Japanese Companies .................................................................................... 129 1. Assumed form of participation by Japanese companies (equity investment, material and equipment supply,

operation and maintenance of port facilities)...................................................................................................... 129 2. International competitiveness of Japanese companies in the Project (in terms of equipment, commodity and

service) and possibility of securing order for these ............................................................................................ 129 3. Advantages of Japanese companies in the Project implementation (technical and economic aspects) ........ 130 4. Contents and prices of major equipment and materials expected to be procured from Japan ...................... 131 5. Necessary measures to promote award to Japanese companies.................................................................... 131

Attachment A ......................................................................................................................................................... A1

Attachment B ......................................................................................................................................................... B1

Attachment C ......................................................................................................................................................... C1

Attachment D......................................................................................................................................................... D1

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Executive Summary

1. Background and necessities of the Project

Lien Chieu port area, the target site of this Project, is one of the four port areas constituting Da Nang Port located

in Da Nang City in the Central Region of Vietnam. Besides, operation is conducted at Tien Sa and Tho Quang

port areas that handle cargo and Son Han port area that is called at by small-size sight-seeing ships. In Lien Chieu

port area, a privately owned small-scale jetty for discharge of petroleum products and a cement plant jetty are in

operation, but there is no port facilities there that handle general cargo and containers.

Tien Sa port area that handles the whole of the container cargo of Da Nang Port has recorded a high average

growth rate of approximately 23% in the last 8 years, resulting in its relatively small cargo terminals suffering

chronical congestions and departing ship waiting conditions. Furthermore, calling of international large-size cruise

ships that have been increasing recently is spurring the congestion of the cargo terminals, driving them in a

dangerous situation of physical and personal flows intersecting each other. Since Tien Sa is located in the east of

Da Nang City, where tourism development is in rapid progress, trucks passing through ordinary roads are

becoming the cause of congestions or accidents.

Da Nang Port Joint Stock Company that is operating Tien Sa port area is currently implementing a phase II port

improvement project aiming at completion in 2018 by using its own budget and private fund in order to mitigate

congestions in the said port area. Further increase in cargo handling capacity to meet future demand after the

completion of the phase II project, however, is deemed to be difficult due to the constraints in securing land for

expansion by the existence of hills on the west side of the port area and navy facilities, and possible adverse

impacts on the sightseeing areas. Under such circumstances, construction of a new port in Lien Chieu port area is

becoming necessary.

2. Basic policy for determining the contents of the Project

Port development in the Central Region including Da Nang Port is implemented in accordance with the detailed

Master Plan 2020 – 2030 (entitled “Detailed Planning of Middle Central Vietnam Seaport Group (Group 3) up to

2020 with the vision to 2030”) which was approved by the Prime Minister on July 29, 2016. Future cargo

handling volumes at Tien Sa, Tho Quang and Lien Chieu port areas that are handling cargoes are being planned in

line with this detailed Master Plan as shown in Table-1. Compared with the present handling volume (in 2015),

1.2-fold and 1.4-fold volumes are planned for general cargo in 2020 and 2030, respectively, and 1.8-fold and

5.4-fold volumes for container cargo in the respective years.

ii

Table-1 Future cargo handling volume of Da Nang Port

Unit: million tons

Port Area 2020 2030

General cargo

Container Transit cargo

General cargo

Container Transit cargo

Tien Sa 2.6 5.0-6.1 1.0-1.3 2.7-3.0 7.5-8.5 1.7-2.3 Tho Quang 0.9-1.3 --- --- 1.4-1.7 --- --- Lien Chieu --- --- --- --- 7.5-10.0 ---

Source: Detailed Planning of Middle Central Vietnam Seaport Group (Group 3) up to 2020 with the vision to

2030

Agreement has been made between the Ministry of Transport (MOT) and Da Nang City People’s Committee to

construct a new port in the Lien Chieu port area as a PPP project with a separate upper and the lower management

system, the same as the Lach Huyen Port Infrastructure Construction Project being implemented in the north. The

agreement has been approved in general terms by the Prime Minister.

The public sector portion, mainly comprising construction of breakwater, seawall and access road, and dredging

of berths and navigation channels, is to be funded by ODA, while the private sector portion, comprising

construction of terminals, procurement of cargo handling equipment and terminal operation is assumed to be

implemented by the proper funding of SPC established by private company(ies). The Project owner is yet to be

decided so far, and it is expected that either MOT (the same as Lach Huyen Port Infrastructure Construction

Project) or Da Nang City People’s Committee will be nominated the project owner for the public sector portion,

of which decision will be made by the Prime Minister in the first half of 2017.

Da Nang Port Joint Stock Company in turn is highly likely to become the project owner for the private sector

portion by dint of the Prime Ministerial Notification (Attachment D) dated 7 February, 2017.

As stated above, both MOT and Da Nang City People’s Committee have agreed to construct a new port in Lien

Chieu by a PPP arrangement with the separate upper and lower managements, but there are some conceptual

differences with respect to the upper limit of cargo handling volume at Tien Sa and the division of functions with

Lien Chieu as shown in Table-2.

Table-2 Differences in project implementation policy between the assumed project owners

Assumed project owners

Upper limit of Tien Sa port area’s cargo handling volume

Division of functions between Tien Sa and Lien Chieu

Ministry of Transport

The upper limit will be 12 million tons/year: Cargo handling capacity after the completion of Phase II Improvement Project

Upon operation start-up of Lien Chieu port area, handling of general cargo shall be preferentially shifted from Tien Sa port area, which shall continue for the time being certain volume of container handling while receiving large-size cruise ships.

Da Nang City People’s Committee

The upper limit will be 10 million tons/year: Due to the existing port road capacity and mitigation of traffic congestion occurring in the proximity of surrounding sightseeing areas.

From the startup of Lien Chieu port operation, handling of general cargo and containers shall be successively shifted from Tien Sa, which in the future shall exclusively serve as a tourist port to accommodate large cruise ships.

iii

3. Outline of the Project

3.1 Location of the Project

Da Nang Port that is located in Da Nang City in the Central Region of Vietnam comprises, as shown in the Project

Map in Figure-1, the cargo handling three port areas of Tien Sa, Tho Quang and Lien Chieu, and Son Han port

area that is used by small-size sightseeing ships.

Since the new port development project for Lien Chieu port area is expected to handle cargo with its volume

exceeding the capacity following the completion of the phase II port improvement project going on in the existing

port area of Tien Sa, construction of a new port has become necessary in Lien Chieu which is located on the

opposite side of Tien Sa across Da Nang Bay.

Figure-1 Project location map


3.2 Lien Chieu port construction project

This Study reviews the contents of Phase I contemplated in the Pre-Feasibility Study conducted by Da Nang City

People’s Committee, mainly from the technical, economic and financial, and environmental aspects, and appraises

the viability of the project along with the results of the local study, thereby presenting proposed access to the

realization of the above project.

(1) Demand forecast

METI Study Team conducted demand forecast on the basis of the previous changes of Da Nang Port’s cargo

handling volume, the changes in the gross production of Da Nang Port’s hinterland, and changes in GDP of

Vietnam by using the GDP elasticity method, and setting base year and target year on 2015 and 2030,

Lien Chieu port area

(Project site)

Tien Sa port area Tho Quang port area

Son Han port area

Da Nang

Hoa Khanh Industrial Zone

Lien Chieu Industrial Zone

Scale: 5km

Coastal sightseeing area

iv

respectively, thereby reviewing the result of demand forecast made in the Pre-Feasibility Study. As a result,

container cargo handling volume and general cargo volume in 2030 were estimated to be 1,287 thousand tons

and 4,237 thousand tons, respectively, which represented a result of more conservative growth rates in cargo

handling volume than what was forecast in the Pre-Feasibility Study.

(2) Port planning

Port planning of Lien Chieu port was elaborated in “The Study on the Port Development Plan in the Central

Region of the Key Area of the Socialist Republic of Viet Nam” implemented by JICA and completed in 1998.

Making the results of this study as a reference, METI Study Team reviewed the Phase I port layout planning

contained in the Pre-Feasibility Study, confirming that the port planning (layout) is reasonable.

(3) Terminal planning

Taking into account the result of demand forecast, terminal facility arrangement plan and handling capacity

were reviewed. As shown in Figure-2, facility arrangement plans (proposed options) are proposed on the basis

of phased construction plans that reflect the difference in the concept of project implementation between the

assumed project owners shown in Table-2 as follows: For the case where MOT will be the project owner,

Option-1 (to construct one container berth and one general cargo berth), and for the case where Da Nang City

People’s Committee becomes the project owner, Option-2 (to construct two container berths and one general

cargo berth). Container handling capacity for each Option was confirmed to be approximately 500,000

TEU/year in Option-1 and approximately 900,000 TEU/year in Option-2.

Figure-2 Proposed terminal facility arrangement plans (proposed options)

Option-1 Option-2


(4) Road planning

As regards the access roads that connect Lien Chieu port area with the major areas where port-related cargoes

occur or concentrate and on the basis of the case where Da Nang City People’s Committee becomes the project

owner (the case in which cargo volume concentrates in Lien Chieu port area), a traffic supply-demand relation

v

was analyzed to identify the gap between the future traffic demand including demand for traffic of port-related

cargoes and the traffic capacity of the access roads.

As a result of reviewing the access road plans in the Pre-Feasibility Study, an access road construction plan is

proposed to be as follows: the existing roads (including those being planned to be improved) are to be used

until 2029, and a new access road is to be constructed to be operational from 2030 onward. Since the routing

plan for the access road proposed in the Pre-Feasibility Study contains issues of applicable design standards and

traffic safety, it becomes necessary to formulate a plan to construct an access road of high feasibility on the

basis of an appropriate routing plan backed up by in-depth studies.

(5) Design of port facilities

Review was made of the standard dimensions or sectional drawings of the principal port facilities: wharf,

breakwater, seawall, reclamation, navigation channel, berth that were planned for phase I in the Pre-Feasibility

Study. Structures utilizing Japanese technology that has technical and economic advantages were proposed for

the breakwater of which the construction will desirably use ODA.

3.3 Financial and economic feasibility

(1) Project cost estimation

Preliminary direct project cost estimation was made on the basis of the result of study of the aforementioned

terminal planning, road planning, and port facilities design as shown in Table-3 and Table-4. The direct project

cost in Option-1 of the public sector portion (to construct one container berth and one general cargo berth) and

the private sector portion was estimated to be approximately 12.2 billion JPY (down approximately by 15%

from the level estimated in the Pre-Feasibility Study) and approximately 14.5 billion JPY, respectively.

Likewise, for Option-2 (to construct two container berths and one general cargo berth), the direct project cost of

the public sector portion and the private sector portion was estimated to be approximately 13.7 billion JPY and

approximately 22.4 billion JPY, respectively.

vi

Table-3 Breakdown of Direct Project Cost for Phase I

(After review: constructing 1 general cargo berth and 1 container berth)

Table-4 Breakdown of Direct Project Cost for Phase I

(After review: constructing 1 general cargo berth and 2 container berths)

(2) Result of financial analysis

Vietnamese parties concerned have explicitly manifested their policy to implement construction of

infrastructures by PPP method as much as possible. Therefore, in order to grasp the feasibility of a PPP-based

Unit Quantity Cost (VND) VAT (VND) Cost: incl.VAT (VND) Cost: incl.VAT (JPY)I 2,391,196,731,813 239,119,673,182 2,630,316,404,995 12,173,104,322

1 m 1,090 637,476,284,985 63,747,628,499 701,223,913,484 3,245,264,272

2 m 740 494,262,264,100 49,426,226,410 543,688,490,510 2,516,190,334

3 m 350 196,243,369,350 19,624,336,935 215,867,706,285 999,035,745

4 m3 5,030,000 829,214,584,626 82,921,458,463 912,136,043,089 4,221,365,607

5 m 1,500 89,302,570,000 8,930,257,000 98,232,827,000 454,621,523

6 ha 5 15,000,000,000 1,500,000,000 16,500,000,000 76,362,000

7 Ls 20,319,552,000 2,031,955,200 22,351,507,200 103,442,775

8 Ls 39,731,600,000 3,973,160,000 43,704,760,000 202,265,629

9 Ls 69,646,506,752 6,964,650,675 76,611,157,427 354,556,437

II 2,788,792,933,000 278,879,293,300 3,132,959,497,349 14,499,336,554

1 m 320 278,802,146,000 27,880,214,600 306,682,360,600 1,419,325,965

2 m 260 191,088,821,000 19,108,882,100 210,197,703,100 972,794,970

3 m 320 72,775,683,000 7,277,568,300 80,053,251,300 370,486,447

4 m 260 52,515,064,000 5,251,506,400 57,766,570,400 267,343,688

5 m2 203,190 358,433,080,000 35,843,308,000 394,276,388,000 1,824,711,124

6 m 535 116,173,240,000 11,617,324,000 127,790,564,000 591,414,730

7 m2 203,190 180,160,850,000 18,016,085,000 198,176,935,000 917,162,855

8 Ls 163,714,049,000 16,371,404,900 180,085,453,900 833,435,481

9 m2 203,190 564,739,220,000 56,473,922,000 621,213,142,000 2,874,974,421

10 810,390,780,000 81,039,078,000 891,429,858,000 4,125,537,383

Multi-purpose Crane on General Cargo Berth Unit 2 168,381,000,000 16,838,100,000 185,219,100,000 857,193,995

Container Crane on Container Berth Unit 3 403,157,250,000 40,315,725,000 443,472,975,000 2,052,392,928

Container Crane in Container Yard Unit 12 144,000,000,000 14,400,000,000 158,400,000,000 733,075,200

Others Ls 94,852,530,000 9,485,253,000 104,337,783,000 482,875,260

11 Ls 59,352,064,590 5,935,206,459 65,287,271,049 302,149,490

III 5,179,989,664,813 517,998,966,482 5,763,275,902,344 26,672,440,876

1.0JPY=0.004628VND

Item

Public PortionSoil Improvement (Seawall, Breakwater)SeawallBreakwaterBasin and Channel DredgingPort Access RoadTemporary PierReclamation for Port Access RoadElectricity, Water, LightingConsultant FeePrivate PortionContainer Berth (1 berth)General Cargo Berth (1 berth)Retaining Wall behind Container BerthRetaining Wall behind General Cargo BerthYard ReclamationRevetmentRoad and Yard in PortBuildingsSoil Improvement (Road, Yard, Revetment)Cargo Handling and Utility Equipment

Consultant FeeTotal Direct Cost (I+II)

Unit Quantity Cost (VND) VAT (VND) Cost: incl.VAT (VND) Cost: incl.VAT (JPY)I 2,687,446,603,739 268,744,660,375 2,956,191,264,114 13,681,253,170

1 m 1,300 760,245,507,065 76,024,550,707 836,270,057,772 3,870,257,827

2 m 1,070 659,114,276,900 65,911,427,690 725,025,704,590 3,355,418,961

3 m 350 196,243,369,350 19,624,336,935 215,867,706,285 999,035,745

4 m3 5,030,000 829,214,584,626 82,921,458,463 912,136,043,089 4,221,365,607

5 m 1,500 89,302,570,000 8,930,257,000 98,232,827,000 454,621,523

6 ha 5 15,000,000,000 1,500,000,000 16,500,000,000 76,362,000

7 Ls 20,319,552,000 2,031,955,200 22,351,507,200 103,442,775

8 Ls 39,731,600,000 3,973,160,000 43,704,760,000 202,265,629

9 Ls 78,275,143,798 7,827,514,380 86,102,658,178 398,483,102

II 4,308,715,659,640 430,871,565,964 4,833,637,630,040 22,370,074,952

1 m 650 557,604,292,000 55,760,429,200 613,364,721,200 2,838,651,930

2 m 260 191,088,821,000 19,108,882,100 210,197,703,100 972,794,970

3 m 650 145,551,366,000 14,555,136,600 160,106,502,600 740972894

4 m 260 52,515,064,000 5,251,506,400 57,766,570,400 267343687.8

5 m2 203,190 487,468,988,800 48,746,898,880 536,215,887,680 2481607128

6 m 535 180,068,522,000 18,006,852,200 198,075,374,200 916692831.8

7 m2 203,190 245,018,756,000 24,501,875,600 269,520,631,600 1247341483

8 Ls 222,651,106,640 22,265,110,664 244,916,217,304 1133472254

9 m2 203,190 768,045,339,200 76,804,533,920 844,849,873,120 3909965213

10 1,458,703,404,000 145,870,340,400 1,604,573,744,400 7425967289

Multi-purpose Crane on General Cargo Berth Unit 2 168,381,000,000 16,838,100,000 185,219,100,000 857,193,995

Container Crane on Container Berth Unit 6 806,314,500,000 80,631,450,000 886,945,950,000 4,104,785,857

Container Crane in Container Yard Unit 24 288,000,000,000 28,800,000,000 316,800,000,000 1,466,150,400

Forklift Unit 4 2,980,800,000 298,080,000 3,278,880,000 15,174,657

Tractor Head Unit 40 36,000,000,000 3,600,000,000 39,600,000,000 183,268,800

Tractor Chassis Unit 120 36,000,000,000 3,600,000,000 39,600,000,000 183,268,800

Others Ls 121,027,104,000 12,102,710,400 133,129,814,400 616,124,781

11 Ls 85,500,367,669 8,550,036,767 94,050,404,436 435,265,272

III 6,996,162,263,379 699,616,226,339 7,789,828,894,154 36,051,328,122

1.0JPY=0.004628VND

BuildingsSoil Improvement (Road, Yard, Revetment)Cargo Handling and Utility Equipment

Consultant FeeTotal Direct Cost (I+II)

Retaining Wall behind Container BerthRetaining Wall behind General Cargo BerthYard ReclamationRevetmentRoad and Yard in Port

Electricity, Water, LightingConsultant FeePrivate PortionContainer Berth (2 berth)General Cargo Berth (1 berth)

BreakwaterBasin and Channel DredgingPort Access RoadTemporary PierReclamation for Port Access Road

Item

Public PortionSoil Improvement (Seawall, Breakwater)Seawall

vii

project, estimation is made for FIRR of the whole project, of the public sector and of the private sector. NPV

and B/C valuation is made along with. FIRR was calculated for the cases where concession fee is 0%, 10% and

20%. Case-wise scenarios are as follows:

Table-5 Cases for each scenario

Items

Container Terminal General Cargo Terminal

Berth

length

Operation

start year

Max Cargo

Volume

Berth

length

Operation

start year

Max Cargo

Volume Case-1 Effective utilization of Tien Sa Port (capacity: 12 Mt/y). Cargo in excess of the capacity to be shifted to Lien Chieu)

380m

(1 berth) 2024 500,000 TEU

330m

(1 berth) 2024 2 Mt

Case-2 Early cargo shift from Tien Sa Port (capacity: 10 Mt/y) after project completion at Lien Chieu

380m

(1 berth) 2022 500,000 TEU

330m

(1 berth) 2022 2 Mt Case-3

Early cargo shift from Tien Sa Port (capacity: 10 Mt/y) after project completion at Lien Chieu

710m

(2 berths)

2022

2025 900,000 TEU

Source: METI Study Team; Mt/y: million tons per year

The results of case studies of financial analysis are as follows:

1) Case-1

- For the entire project, the financial internal rate of return FIRR exceeds the weighted-average cost of capital

WACC (4.6%) in all cases. This is more than government bonds (5.2%). NPV in the most unfavorable

conditions is 38.5 million USD and B / C is 1.09, and thus the project can be evaluated as executable.

- As for the possibility of project implementation by PPP, FIRR of the private and public sectors may go

below the target value depending on the concession fee.

- From the above, although the project is evaluated as feasible, it would be necessary to carefully manage the

construction cost, seek more advantageous financing, etc.

2) Case-2

- For the entire project, FIRR exceeds WACC (4.6%) in all cases. This is more than government bonds (5.2%).

NPV in the most unfavorable conditions is 88.2 million USD and B / C is 1.18, and thus the project can be

evaluated as executable.

viii

- As for the possibility of project implementation by PPP, if the concession fee is 10%, FIRR of both the

private sector and public sector exceeds the target value even in the case of unfavorable conditions.

- From the above, the project can be unequivocally evaluated as feasible under case-2.

3) Case-3


NPV in the most unfavorable conditions is 149.6 million USD and B / C is 1.23, and thus the project can be

evaluated as executable.

- ·As for the possibility of project implementation by PPP, if the concession fee is 10%, FIRR of both the

private sector and public sector exceeds the target value even in the case of unfavorable conditions. The

calculated FIRR is the highest of all cases.

- From the above, the project can be unequivocally evaluated as feasible.

(3) Results of economic analysis

Economic feasibility of the Project was carried out by analyzing and assessing EIRR, NPV and indicators of B/C

and effecting sensitivity analysis as well. Case scenarios are the same as those in Table-3 above.

In the “Without” case where the Project is not carried out, assumption was made that container cargo supposed

to be handled in the “With” case is to be handled by Quy Nhon Port which is the nearest container handling port

and ranked as Class 1 entrance port in the region. General cargo was assumed to use Tien Sa port area as in the

past.

As a result, EIRR proved to reach 11.2% even in Case 1 which represents the most disadvantageous condition. It

exceeds the level of government bonds (5.2%) and is evaluated as being superior to other investment

opportunities in Vietnam. Likewise, NPV was calculated to be 265 million USD and C/B ratio 1.73.

Even after the sensitivity analysis (Increase in projected costs by 10%, Decrease in projected benefits by 10%),

the EIRRs of all cases are higher than target level. This means that the planned Projects are economically

feasible.

3.4 Evaluation of environmental and social aspects

There are sixteen (16) MPAs (Marine Protected Area) designated in Vietnam. However, no MPAs are registered

in Da Nang Bay and the sea areas in the vicinity.

Meanwhile, two national conservation parks are designated by Da Nang City, which include coasts and sea areas

extending from Hon Chao to Hai Van Nam, and nearly the whole of Son Tra Headland. Confirmation has been

made with DONRE that the project site is out of the national conservation areas.

Furthermore, on the assumption that Japanese ODA Loan funds will used for the public investment portion of this

Project, it falls under a large-scaled project in the port and harbor sector enumerated in JICA’s “Environmental

and Social Considerations Guidelines” (published in April 2010), the Project is assumed to have a certain degree

ix

of impact on the environment. Consequently, a sufficient confirmation in terms of environmental and social

considerations is necessary at implementing this Project.

(1) Environmental improvement effects by the project implementation

The following environmental improvement effects can be achieved by the implementation of the Project

1) Easing of traffic congestion

Reduction in the number and frequency of traffic accidents and traffic jam is expected by sharing cargo

handling functions between Tien Sa port and Lien Chieu port, of which the latter is located in the west side of

Da Nang City, and which allows freight vehicles make an access to outer major roads without passing through

the city area or tourist sites. At the same time, improvement in the air environment is also expected since

reduction will be made in the emissions of gas from large-size freight vehicles, which tends to be more

exhausted during the starting and stopping motions of vehicles at the time of congestion.

2) Improvement of the safety of port terminal operation

Since construction of a new port in Lien Chieu and sharing of cargo handling with Tien Sa port will ease the

cargo handling burden on Tien Sa, improvements will be realized in Tien Sa of the complicated and dangerous

operating conditions in the terminal, as well as labor conditions of dock workers and safety of passengers going

ashore from cruise ships.

3) Creation of employment opportunities

Factories operating in industrial parks transfer every day more than 1,000 employees by large size bus between

their living towns around Da Nang city and the factories, potentially making associated traffic congestion in the

future become an issue of stable securement of employees. Therefore, solving traffic congestion in Da Nang

City will promote or stabilize employment in the industrial parks of people living in the adjacent provinces,

which will expectedly contribute to reducing disparities in the living standard between urban and rural areas in

the Central Vietnam.

(2) Environmental and social impacts of the project implementation

The environmental and social impacts of the project implementation are as follows.

1) Water pollution by dredging of channel and berth, dumping of dredge soil and reclamation

Approximately 5,000,000 m3 of seabed dredging will be required to facilitate navigation and berthing of cargo

ships. Although past studies reported no contamination by seabed soil around the scheduled dredging site of the

project, marine ecosystems, such as coral reefs and sea grasses located in the neighboring seas, may be

jeopardized due to the dispersion of pollutants in case proper treatment or disposal is not implemented.

Therefore, on top of conducting a sufficient study of the method of dredging and reclamation, treatment and

dumping of dredge soil during the oncoming feasibility study (F/S study), port facility planning and design that

envisage minimization of dredge soil volume need to be performed.

2) Increase in marine traffic and occurrence of accident due to the construction of a new port

x

In Da Nang Bay, a variety of vessels are in navigation, including cargo ships, oil tankers, fishing boats, small

sightseeing boats, large cruise ships and navy ships. Although incidence of marine accidents is low at present,

higher risks of raising the incidence are expected to result from the construction of a new port in Lien Chieu

area and the resultant increase in the number and size of navigating vessels.

Therefore, establishment is strongly advised of a PMB (Port Management Body) that enables information

sharing by a centralized management of cargo handling work and navigating vessels in Da Nang Bay to

minimize the risk of collision accidents.

3) Resettlement required for access road construction

Since a part of the access road that links port facilities with the existing roads on land will pass through a

district of houses and buildings near the shoreline, approximately 30 to 40 households will probably have to be

resettled. Da Nang City is experienced in realizing a large number of resettlement activities to secure project

sites for constructing access roads including those for the Tien Sa Port Improvement Project (Phase I), so that

implementation of proper and prompt resettlement is desirable in this Project as well.

4. Japanese companies can advantageously offer excellent technologies

In the public sector portion, review was made of the structure of the breakwater and seawall proposed in the

Pre-Feasibility Study, thereby proposing more stable, more economic and more eco-friendly structures.

Concreting speaking, the proposed structures contemplate the use of highly-stable wave breaking blocks being

patented by a Japanese company and application of Japanese unique soil improvement method to replace soft

seabed soil with the blast furnace slag, a recycled material in steel mills, which contribute to save cost of work

cost and reduce discharge of excavated seabed soil that can cause environmental problems.

As regards the private sector portion, Japanese companies can likely display their advantages by proposing

application of knowhow for terminal operation owned by them and introduction of energy saving or

environmentally friendly equipment.

5. Concrete schedule until execution of the Project and possible impeding risks

Table-6 shows the outline project schedule that assumes the case of starting operation in 2024 at Lien Chieu port

area (to construct one general cargo berth and one container berth), schedule which has been prepared on the

premise that this Project is implemented under a PPP arrangement and that the public sector portion is

implemented by using Japanese ODA.

Table-6 Outline project schedule up to the opening of Lien Chieu port area

Time point Contents of implementation Feb. 2017 Completion of study by METI 2017 Determination of project owner, completion of Pre-Feasibility Study in

Vietnam 2018 Carrying out feasibility study in Vietnam, implementation of JICA Study. 2019 Procedures for ODA Loan, selection of an SPC 2020～2024 Selection of consultant, designing, preparation of bidding documents, bidding,

construction work 2024 Startup of operation of Lien Chieu port area

xi

6. Positive effects on the stable supply of energy for Japan associated with the implementation of the Project

Calculation was made of the effects of reduction in the emission of CO2 and NOx that can be caused by the

implementation of the Project. Further, appraisal was made on the improvement in energy supply and demand

balance in Vietnam associated with the shifting from land transport of cargo by truck to sea freight, as well as on

the effects that can be expected in respect to the stable supply of energy for Japan.

In the same manner as the economic analysis, in the “Without” case where the Project is not carried out, study was

made on the assumption that container cargo supposed to be handled in the “With” case is to be handled by Quy

Nhon Port which is the nearest container handling port and ranked as Class 1 entrance port in the region. General

cargo was assumed to use Tien Sa port area as in the past.

As a result, the effects of reduction in CO2 emission which corresponds to 13,482 ha/year of afforestation and

NOx which corresponds to 900,000 trucks/year of reduction were confirmed in the Option-2 case (with 900,000

TEU/year of container handling) shown in Figure-2.

Furthermore, the effect of reducing annual fuel consumption of 1,231,200 kiloliter was confirmed, which signifies

that improvement in fuel supply and demand balance in Vietnam will contribute to a more stable supply of energy

for Japan which depends 99.6% of its petroleum supply on import from abroad.

7. Points to be taken into account at advancing this Project under the Japanese PPP arrangement

For studying the participation of Japanese companies in the implementation of this Project under the PPP

arrangement, the following points should be taken into account:

(1) Clarification of the Project Owner on the Vietnamese side

The prerequisites and risks related to the case of Japanese companies participating in the private sector portion

will vary depending on who will be the Project Owner on the Vietnamese side. Consequently, so that clear and

early information should be provided by the Vietnamese side as to who will be the Project Owners of both public

and private sector portions, and what rights and obligations are to be held by them, in order to enable Japanese

companies to make a sufficient study to determine whether or not to take part in the Project.

(2) Clarification of division of functions between this Project and the existing port (Tien Sa port area)

In case the oncoming new port at Lien Chieu and the existing port continue to be further operated with division of

roles between them left undefined or inappropriate, either one of the two port facilities may remain unused due to

cargo securing competition or unequal political pressure. Agreement has been reached in principle between Da

Nang City People’s Committee and Da Nang Port Joint Stock Company that in order to avoid such inconvenience

as the above-mentioned, it is desirable that a Special Purpose Company (SPC) which was established by Da Nang

Port Joint Stock Company and is currently operating Tien Sa port area continues to operate Tien Sa port area as

well. How to share between the two port areas the kinds and volume of cargoes to be handled has not yet seen an

accord in the opinion among the major parties concerned of MOT, Da Nang City People’s Committee and Da

Nang Port Joint Stock Company. In order to allow Japanese companies to participate in the private sector portion

xii

of the Project, establishment is necessary of an SPC following the agreement among the parties concerned on the

division of functions between the two port areas.

(3) Clarification about which priority order this Project is given by the Vietnamese government

At present major traffic infrastructure projects, such as port and harbor, roads, and railways, are in progress under

Japanese ODA Loans in Vietnam under the severe fiscal conditions of the State. In such a situation, it is necessary

that official procedures will be taken at an early date between the governments of Japan and Vietnam toward the

implementation of the public section portion of the project under Japanese ODA Loans in parallel to the

establishment of an SPC subsequent to the clear information by the Vietnamese government on the importance

and priority order of the Project.

(4) Clarification of companies and investors to participate in the private sector portion

Da Nang City People’s Committee informs that Vietnamese companies that have shown interest in participating in

the private sector portion of the Project are, besides Da Nang Port Joint Stock Company, operators of existing

ports, banks, investment companies, etc. They are, however, waiting for the decision by the Prime Minister as to

who will be the Project Owner, which, at present, has yet to be defined as explained above. Movements of local

companies and investors that will possibly take part in the private sector portion of the project as well as the

oncoming processes being taken toward the appointment of the Project Owner should be observed closely and

carefully to promote participation of Japanese private companies.

(5) Necessity of sufficient investigations into environmental and social considerations

Implementation of this Project is expected to reduce traffic congestion, accidents and exhaust gas emissions from

vehicles in and across Da Nang City. On the other hand, major negative environmental impacts are expected to be

water quality contamination in the surrounding seas caused by dredging of navigation channels and berths,

dumping of dredge soil and reclamation of port terminal construction area. In addition resettlement of some 30 -

40 households, which is rather small-scaled, is expected to be necessary prior to the construction of an access road

to connect the Lien Chieu port terminal and the existing roads. A detailed EIA study will be conducted along with

the Feasibility Study in Vietnam, of which the results as well as proposed mitigation measures need to be

approved by MONRE.

1

Chapter 1 Overview of the Host Country and Sectors

1. Economic and fiscal conditions of the host country

Economic situation 1.1

With the effects of the Doi Moi Reform Program beginning to be actualized since around 1989, Vietnam posted

an economic growth rate of the order of 9% during year 1995 to year 1996. Despite the slowdown of the growth

for a time due to the effects of the Asian economic crisis, a steady increase in the direct investment from abroad,

the country achieved high economic growth rates with a compound average economic growth rate of 7.26%

during 2000 – 2010, thereby becoming a middle income country (lower part) in 2010. Although its growth rates

waned to 5.9% in 2011 and 5.2% in 2012 as a result of having directed its efforts toward a stabilized macro

economy since 2011, Vietnam managed to recover the rates to 5.4% in 2013 and 5.98% in 2014, achieving 6.68%

in 2015, while successfully containing inflation and maintaining stable growth.

The Vietnamese government targeted its substantial GDP growth rate for year 2016 at 6.7%. With World Bank

and IMF forecasting it to be 6.3% and 6.4% (GDP compound average growth rate 6.2% for 2016 – 2021),

respectively, economy is expected to continue as vigorously as in 2015. Economic analysts in Vietnam forecast

that economic growth from now on will be driven by the continued increase from 2015 in (1) exports mainly of

industrial products, (2) inflow of inward direct investment, and (3) growth rate of credit.

Vietnam is further propelling changeover to the market economy and integration with international economy,

succeeding in officially joining the WTO in January 2007. The country is advancing its policy to conclude FTA /

EPA with different countries and regions, participating in the TPP talks, as well.

Table 1-1 Major economic indicators

Major industries Agriculture, forestry, fishery, mining, light industry GDP (2015, IMF estimation) Approx. 198.8 billion USD GDP per capita (2015, IMF estimation) 2,171 USD Economic growth rate (2015, General Statistics Office of Vietnam – GSOV)

6.68%

Price increase rate (2015, annual average, GSOV)

0.63%

Unemployment rate (2015, GSOV) 2.31% (Urban: 3.29%、Rural:1.83%) Trade amount (2015, General Customs Office of Vietnam – GCOV)

Exports: 162.11 billion USD (Up 7.9% from the previous year) Imports: 165.65 billion USD (Up 12.0% from the previous year)

Major trade items (2015, GCOV) Export: Cellular telephone and its components; sewn product; PC, electronic devices and its components; footwear; machinery, equipment and components, etc.

Imports: Machinery, equipment, components; PC, electronic devices and its components; cellular telephone and its components, cloth, steel products, etc.

Trade partners (2015, GCOV) Export: USA, China, Japan, S. Korea, Hong Kong Import： China, S. Korea, Japan, Taiwan, Thailand

Currency VND Investment from abroad (approval-based) (2015, Foreign Investment Agency of Vietnam)

22.76 billion USD

Source: the Ministry of Foreign Affairs

2

The reason of the high growth rate in recent years is mainly due to export. With gradual progress in constructing

infrastructure in the country, a boom of investment in Vietnam emerged in 2007 when the country joined WTO.

This turned the country into a major production base of foreign companies manufacturing electronics products,

such as semi-conductor and cellular telephone, making a slow but steady shift of major exports from the

conventional low added value light industrial product and natural resources to higher value added articles.

Another reason may be cited that while other ASEAN nations are suffering stagnation in their economic growth

being influenced by the Chinese economic downturn, Vietnam’s exports to China are relatively small compared

with the principal export destination - the U.S.A. of which the economic situation is in general more prosperous.

Although Vietnam has been a balance-of-payment surplus country since 2012, the trade balance in 2015 ran into

the red of approximately 3.5 billion USD due to the decrease in the exports of primary product and surging

imports of vehicles, etc. While exports of the major export items of electronic devices such as cellular phone,

sewn product and footwear have been on a smooth rise upheld by steady production activities of foreign

companies, exports of primary product such as crude oil and agricultural product have dropped. Imports of major

import items – capital goods such as machinery, equipment and electronic components, as well as intermediary

commodities have steadily increased.

In 2015 direct investment in Vietnam (on the approval base, being a total of new and additional investments)

increased 10.0% from the previous year to approximately 24.51 billion USD. While new investment projects

remained nearly flat versus the previous year (down 0.1% from the previous year), additional investment projects

yielded a significant increment (up 43.5% ditto). The same as in the past, investment in the manufacturing

industry accounts for over 70% of the total (in terms of monetary amount). Principal investment origin countries

and regions are South Korea (1st) with 6.98 billion USD, Malaysia (2nd) with 2.48 billion USD, and Japan (3rd)

with 1.8 billion USD.

Fiscal conditions 1.2

Vietnam is suffering a chronically red fiscal balance due to the fragile revenue base which owes to the reasons,

such as a small tax base and incomplete taxation system.

Immediately after the Bankruptcy of Lehman Brothers in 2009 in particular, a large fiscal deficit was recorded

because of two factors: decrease in revenues from the state-owned petroleum corporation associated with the

plunge of crude oil prices, and increase in expenditure to stimulate economy. In 2012 the country also experienced

a significant fiscal deficit influenced by the sharp drop in the revenue caused by the elimination of tariffs on as

many as 1,600 articles which was enforced in accordance with the agreement of AFTA (Free Trade Areas of

ASEAN).

In case the large fiscal deficit continues, governmental debts will expand to potentially oppress allowance for

future fiscal expenditure by giving priority to expenditure destined for repayment. In addition continued large

fiscal deficits may lead to lowering the credibility of Vietnamese currency VND, strengthening inflation pressure

to eventually increase risks of jeopardizing the stability and balance of macro economy.

Under such circumstances, Public Investment Law and Budget Law were revised in 2014 and 2015, respectively,

with the motive explicitly described as to strengthen fiscal discipline on the premise of limited revenue sources,

3

and to cut subsidies.

The Budget Law stipulates formulation of a five year fiscal plan, as well as a three year fiscal and budgetary plan.

Under these two plans, the two points of (1) Total budget that can be distributed, and (2) Possibility of procuring

budget (What amount of procurement is expected from which revenue source(s)) are stipulated, and expenditure

will be allowed only for such items as have been approved at the time of budget planning, Therefore, both central

government and regional governments have been obliged to seriously engage with the determination of a priority

order for distributing budgets, and the calculation of the limits of expenditure (in particular of capital expenditure)

of respective sectors.

The Public Investment Law defines that the central and regional governments shall formulate a mid-term public

investment plan (Article 49), that said plan shall clearly state investment funding sources by project, and that

posting outstanding account is banned in public business projects (fact which has been regularly found). This

means that projects without securing funding sources will be disapproved.

The national mid-term public investment plan (including mid-term investment plans of the central and regional

governments) is approved by the National Assembly. Those projects that are not listed in a mid-term public

investment plan or being ODA projects with amount in excess of the planned amount, as well as concessional

lending projects will become the objects of discussion and study by the Managing Committee of the National

Assembly. Reporting to the National Assembly is necessary before enforcement. Such being the case, the position

of the National Assembly has been enhanced in the structure of the governance of the country. In addition, MOF

has been involved together with MPI as the organization that assumes adjustments for the distribution of budget.

The above revisions of the two laws aim to establish a fiscal discipline envisaging a sustained stability of macro

economy. While ill effects are emerging onto the fiscal administration by the decentralization process that has

advanced to an uncontrollable degree, establishment of a fiscal discipline is intended to normalize the relationship

between the central government and the regional governments.

Vietnam claims that it will continue to count on domestic and foreign debs for investment in economic and social

infrastructure and its development. Adoption was made in the resolution on the mid-term investment plan for

2016 to 2020 that public debts balance shall not exceed 65% of GDP in order to achieve the target of reducing this

balance and to enhance investment efficiency. Besides, since public debts are to be appropriated to investment in

the key economic and social infrastructure and its development, it is emphasized that strict examination and

ratification are mandatory for the items that are to be put into practice using governmental debts,

government-guaranteed debts, and regional governmental debts.

Furthermore, the country’s public debt balance during 2011 to 2015 expanded at an annual rate of over 18% on

average, more than tripling GDP compound average growth rate. In January 2017 Prime Minister Phuc announced

that the public debt balance has surpassed 65% of GDP.

The mid-term public investment plan has set the public investment amount for the next five years at

approximately 2,000 trillion VND which comprises 1,120 trillion VND of the central government budget (300

trillion VND of foreign funds and 820 trillion VND of domestic funds) and 880 trillion VND of the local

government budget. In addition, the 300 trillion VND of foreign funds consists of 270 trillion VND is related to

4

ongoing projects, and 30 trillion VND is for new ODS projects to be financed by such donors as ADB and World

Bank. Given that the 30 trillion VND represents a mere amount of 6 trillion VND per year (or 27.8 billion JPY at

VND1.0 = ¥0.004628 (exchange rate at September 2016)), Japanese ODA Loan is facing higher hurdles to get

over, making it extremely severe to realize a new ODA Loan.

2. Outline of project’s target sector

Port classification in Vietnam 2.1

Port classification in Vietnam was announced by means of Prime Ministerial Resolution No. 16/2008/QD-TTg

dated January 28, 2008. This resolution specifies 17 Class I ports that are large-scaled and contribute to the

socio-economic development of the whole country or inter-regions, 23 Class II ports that are middle-scaled and

contribute to the socio-economic development of regions, and 9 Class III ports that are small-scaled and

contribute to activities of companies. Da Nang Port is classified as a Class I port.

Table 1-2 Class I ports and affiliated terminals No. Name of Port Name of Terminal (Abstract) 1 Cam Pha Cam Pha (Coal) 2 Hon Gai Cai Lan (General), B12 (Oil), Ha Long (Shipbuilding), Hon Gai (Passenger boat) 3 Hai Phong Hai Phong, Ba Ckack, Dinh Vu (Investment Development), Dinh Vu (JV Development),

Dinh Vu (Oil), Doan Xa, Taurus Vina, Viconship (Container), Chua Ve (Container), Cua Cam, PETEC Hai Phong (Oil), Tragas Hai Phong, Thang Long (LPG), Bach Dang (Shipbuilding), Caltex, etc.

4 Gay Son Gay Son (General), Gay Son Cement 5 Cua Lo Cua Lo 6 Vung Ang Vung Ang 7 Chan May Chan May, Alcan Vietnam 8 Da Nang Tien Sa, Han River, Hai Van Cement, PETEC, K4D6, etc. 9 Dung Quat Dung Quat 10 Quy Nhon Quy Nhon, Chi Nai 11 Van Phong Dam Mong, Hon Khoi, Hyundai- VINASHIN 12 Nha Trang Nha Trang, Naval force school 13 Ba Ngoi Ba Ngoi 14 Ho Chi Minh Sai Gon, Cat Lai, Tan Cang, VICT, Ba Son, Tan Thuan Dong, Lotus, Nha Be (Oil), Navioil,

Saigon (Oil), Saigon (Shipbuilding), SaigonELF gas, Sao Mai Cement, HiepPhuoc electric power, Holcim HiepPhuoc Cement, Gay Son Cement

15 Vung Tau Ba Ria Serusu, Phu My electric generation plant, PV gas Vung Tau, Vietsovpetro, PTSC (Oil), Interflour Kai Mep, Phu My (fertilizer, Oil), Phu My (iron and steel), Holcim Thi Vai, etc.

16 Dong Nai Dong Nai, Go Dau A,B, Long Thang, Phuoc Thai gas PVC, Phuoc Khain, etc. 17 Can Tho Can Tho, Tra Noc (Oil), Total gas Can Tho, Can Tho (Oil), Petro Mecon, X55, Cau Cui, etc.

Source: OCDI Study on overseas port situation

5

Figure 1-1 Port locations in Vietnam (Class I Ports)

Source: OCDI Study on overseas port situation (The figures represent group numbers)

Outline of Vietnam’s Ports 2.2

Outline of major northern region ports (1)

Hai Phong Port is a river port approximately 100km away from Ha Noi, and approximately 60km from Cai Lan

Port. Hai Phong Port is being used for multiple purposes including mainly bulk cargo. Chua Ve port area is

dedicated to containers with a depth of 8.5m and equipped with 4 gantry cranes. This port has a large tidal level

difference, allowing a 600TEU-class ship to be in berth subject to the tidal conditions.

Besides shipments for Japan, Europe and U.S.A that are transported via Hong Kong, Singapore and Taiwan,

those going through Ho Chi Minh are called at by Vietnamese shipping companies. Furthermore, direct

transportation to Japan of some products such as steel is being realized by using conventional ships as well.

Such being the case, in order to secure a deep-water wharf, a plan was formulated to upgrade Lach Huyen Port

by constructing a bridge on Cat Hai Island to connect with the reclamation area. At present construction is

being advanced of an international port with a sufficient water depth to accommodate large-size ships (Lach

Huyen Port Infrastructure Construction Project) under ODA with a view to responding to the increasing cargo

volume in the north of Vietnam. This project is attracting much expectation in that it will satisfy incremental

cargo demand, responding to larger ships in the sea freight market, thereby promoting the country’s economic

development and contributing to strengthen its international competitiveness.

Cai Lan Port is a sea port approximately 150km away from Ha Noi, having a 680m long quay wall over an area

of 40ha. The water depth along the quay wall is 12m, and that of its navigation channel 10m. 1,200TEU-class

ships can be in berth subject to tidal conditions. The navigation route is near the world heritage Ha Long Bay,

so that pro-environment groups are calling for carefulness in carrying out dredging of navigation routes and

Hon

Cam Hai Phong

Gay Son Cua Lo

Vung Ang

Chan May Da Nang

Dung Quat

Quy Nhon

Van Phong Nha Trang

Ba Ngoi

Vung Tau

Ho Chi

Can Tho Dong Nai

6

sailing of large-size ships. In addition, since at present the frequency of calling is fewer and calling is more

expensive than Hai Phong, the number of truck operators is limited there.

Outline of major central regional ports (2)

In the central region, three ports and one port are designated as Class I ports in Group 3 and Group 4,

respectively, with each having different roles: Chan May Port and Dung Quat Port (specialized to heavy

industry) are handling mainly bulky cargo and some volume of container cargo (of which Chan May is

accommodating passenger ships as well). Quy Nhon Port has a hinterlands bloc (middle south and central

highlands area) different from that of Da Nang, and hence the hinterland blocs are clearly separated in terms of

corresponding ports.

Port development plans until year 2020 have been formulated for these ports (in the Master Plan of MOT) by

ultimately contemplating year 2030, but the formulation envisages a long-term period, and there is no concrete

movement at present, no particular change will likely take place for a while in the hinterland bloc of Da Nang

Port.

Table 1-3 Class I ports in the central region (Group 3)

Province Name of Port Owner

Thua Thien-Hue Chan May VINASHIN (Vietnam’s shipbuilding group)

Da Nang Da Nang VINALINES Quang Ngai Dung Quat Gemadept Corporation and others Binh Dinh Quy Nhon VINALINES

Outline of major southern ports (3)

Ho Chi Minh Port is located in Vietnam’s southern commercial city Ho Chi Minh, being a river port 85km

upstream the estuary. There are plural port groups along the river, with three major separate areas. The river

width in the neighborhood of the port is 300 to 500m, and water depth is approximately 11m. During the

French Colonial Period, it was opened out as a commercial port in 1860, since when it has been playing a role

as an international port. With 5,882 thousand TEU (in 2015), Ho Chi Minh Port is handling more than a half of

the whole container cargo in Vietnam.

Being a river port, it has a limited capacity in accommodating large-size ships. Increasing larger ships being

built in recent years have reduced in the number of ships calling at the port for sailing to remote destinations

such as Europe and the U.S.A., largely giving way to currently dominant smaller ships that sail to ASEAN

countries, China and Japan. In addition, location of its port facilities in the downtown area is impeding their

expansion to meet increasing cargo demand. Traffic jams caused by passing harbor-related vehicles, such as

trucks, are also becoming serious issues.

Cai Mep･Thi Vai Port was developed as an international port to replace Ho Chi Minh Port, and is

approximately 75km away from the center of Ho Chi Minh city. With a water depth of 14m, it allows large-size

ships to be in berth, so that transport of cargo from the south of Vietnam to the Western World can be made

without making trans-shipment. At present there are four container terminals in operation, and three additional

7

ones are being developed scheduled to be service successively. Pavement of all the roads from Ho Chi Minh

City has been complete, but there are still some challenges in respect to the access to this port, such as the

absence of warehouses of physical distribution companies in the vicinity of the port and relatively high haulage

to the port.

3. The situation of target area

Da Nang City is the largest city in the central region of Vietnam with a population of approximately 970 thousand.

It stands as an intermediary point between the national highway that connects the north and the south of the

country and marine routes. In terms of airway, Da Nang is 759km and 960km distanced from the nation’s capital

Ha Noi and Ho Chi Minh, respectively.

The key economic area in the central region consists of Thua Thien – Hue Province, Da Nang City, Quang Nam

Province, Quang Ngai Province and Binh Dinh Province, and is playing a significantly important role in the

economic development of the highlands as well as the coastal areas of the region. Da Nang City is the nucleus in

the said key economic area, functioning as a starting place and is the eastern end of the East-West Economic

Corridor that connects to Laos, Thailand and Myanmar.

Furthermore, there are four world heritages in the neighborhood of Da Nang. Registration as the world cultural

and natural heritage sites has been made for: Hoi An that conserves an ancient city street landscape, serving as a

starting spot of marine silk road in the central sea; My Son that has ruins of Cham Shrine; Hue being the ancient

capital in the Nguyen Dynasty; and Cave of Phong Nha-Ke Bang. Da Nang City has a role to play as the starting

point for sightseeing around these heritages. Construction of high-class resort facilities, gambling casinos and golf

courses is also in progress in the city of Da Nang, which represents continued development as a city for tourism.

A large number of physical distribution and production bases, such as special district for export processing

industries, are established in the proximity of Da Nang. Including neighboring Quang Nam Province and Quang

Ngai Province, industrial parks in excess of 20 are in operation or scheduled to be operational in the future.

In Da Nang City, six industrial parks and zones totaling six (6) are found in operation: Da Nang Industrial Zone,

Da Nang Seafood Services, Lien Chieu Industrial Zone, Hoa Khanh Industrial Zone (including additional parks

for expansion), Hoa Cam Industrial Zone and Da Nang High-Tech Park. Foreign enterprises including Japanese

companies have their subsidiaries established in these industrial parks. Table 1-4 and Figure 1-2 show Japanese

companies operating in Da Nang and locations of industrial parks in Da Nang City, respectively.

8

Table 1-4 Japanese companies operating in Da Nang

As of April 18, 2016Company Name Business contents

1 Mabuchi Motor Danang Manufacture of small motor2 Da nang steel center Metallic parts processing / manufacture3 Acecook Manufacture and sale of instant noodles, snack noodles, dried noodles, soups and seasonings (sauce)4 Daiku J-V Construction and operation of factory5 Daiwa Vietnam Fishing rod manufacturing6 Dairoku Printing industry7 Seto Vietnam Wire harness processing and precision processing8 Hoso Wood frame processing9 VIET HOA ELECTRONICS Assembly and manufacture of transformers, wire coils, etc.

10 Michelle (Rubber Soul) Catalog data creation and printing industry11 Kane – M Manufacture of metal parts for clothing materials12 Fukui Vietnam Production of parts for clothing materials13 Oishi Industries VN Production of parts for clothing materials14 Kanzaki Vietnam Stamping of aluminum, zinc, plastic products for clothing materials, manufacture of parts for clothing materials15 Telala Manufacture and processing of ribbon roll, strip, hook, lace etc16 Yuri ABC Da Nang Manufacturers such as bags, wallets, bags for textile products17 Nitto Jokaso Composite FRP tank for wastewater treatment18 Kamui Vietnam Manufacture and processing of heat exchanger19 Coature Manufacture and processing of painting, varnish, coating equipment20 Maeda – Name Manufacture, import and export of ribbon, tape, clothing materials21 Tachi-S Assembling and producing car seats22 Sadavi Fishing net production23 Fujikura Production of electric wire24 Foster Megaphone, band25 D&N （Danifoods） Processing of agricultural and fishery products26 Logitem Transportation service, tourist car service27 T.T.T.I Production of electronic components28 Sinaran Production of candle29 Tokyo Keiki Precision Technology Precision equipment manufacturing industry30 Vijachip Production of pulp31 HIS Travel industry32 Sanei Construction of housing33 Max Integra Clinical laboratory, advisory service34 ICM Dispatch of trainees35 Marusun Mold design36 P&I Resort37 GO GO IT and game software development38 Marukichi Management of marriage clothing39 OKC Production of craftwork, wooden furniture40 Hanakimdinh(Cool Spot) Restaurant, food service41 HRI Business consulting, human resource development / dispatch42 Max Invesment Transportation service industry, real estate industry43 Kotobuki Sheet metal plate, data management, design44 Japan Computer system Production of software45 UNITEC Board design of electronic print46 Shinko Technos Production of temperature control equipment47 Dragon Golf Import and export of golf equipment48 VST Software design/ development49 Digital Ship Creation and processing of software50 Gio Dong Import and export of electric machinery and electronic parts51 Les Gants Manufacture of gloves52 Vina Saver Mobile application development53 Vietnam TOKAI Manufacture of automobile parts54 IF (I-Factory) Mobile software / web site design55 Seto Seisakusho Manufacture of hydraulic equipment56 Niwa Foundry Manufacture of hydraulic parts and precision parts57 Chef Meat Vietnam Meat processing of ham/sausage58 Apple Film Da Nang Manufacture of plastic bags59 Masuda consulting Investment consulting / translation60 Secom Vietnam Personal security service61 Nissin Logistics Logistics service62 Art Sakura Manufacture of kimonos and yukata63 Takemoto Denki Electrical measuring equipment manufacturing, software/game development64 Nippon Seiki Software development65 Advance Nonwoven Vietnam Co.,Ltd PP nonwoven fabric production66 Endo Chuzo Aluminum alloy casting / processing67 Oceana Wastewater treatment system design, repair, maintenance68 NIPPOVINA Production of Totan products69 YAMATO DANA Funeral clothing production70 Makiyasu Photo service71 Laseek Programming, computer repair service72 Hanasho Vietnam Sale, import and export73 Da Nang – Kogyo Passenger transport74 Nagaden Co., Ltd. Conduit pipe, electric equipment75 Teikoku International Vietnam Co., Ltd. Data input, management consulting

Source: Asia magazine (http://asia-magazine.com/archives/1251）

9

Figure 1-2 Locations of industrial parks in Da Nang City

Source: Business Information on Vietnam’s North, Middle Regions and Their Environs 2015 (JETRO Ha Noi)

Outline of respective port areas constituting Da Nang Port 3.1

Tien Sa port area (1)

Present status 1)

- Tien Sa is a multi-purpose port area capable of responding to container ships, general cargo ships and

passenger ships. The owner is VINALINES and the operator is Da Nang Port Joint Stock Company.

- In Da Nang Port, handling of container cargo and accommodation of large-size passenger ships are being

totally undertaken by Tien Sa port area.

- Container cargo handling volume is forecast to be approximately 300,000 TEU in 2016, and the relatively

small terminal is facing chronical congestion and a situation of waiting for a ship to sail.

- Calling of international cruise ships that have been increasing in recent years are also spurring on the

congestion of the terminal and generating a dangerous situation in which physical distribution and personal

flow are intersecting each other.

Forecast of cargo demand and future plans 2)

- Preparatory Study for Phase II Da Nang Port Improvement Project was implemented in 2014 by JICA in order

to respond to the steadily increasing container cargo volume, and a plan was proposed to materialize early

strengthening of container handling capacity in Tien Sa port area.

- In Tien Sa port area, bidding took place to implement the Phase II Improvement Project by principally using

the budget fund of Da Nang Joint Stock Company and expansion work of the container terminal was

commenced in August 2016.

Industrial Zone

Lien Chieu IZ

Hoa Khanh IZ

Da Nang High Tech Park

Da Nang IT Park

Hoa Cam IZ

Tien Sa Port

Da Nang Seafood Services

Da Nang International Airport

EPT City Da Nang

Da Nang IZ

Dien Nam- Dien Ngoc IZ


SoftwarePark

10

Tho Quang port area (2)

Present status 1)

- Tho Quang port area is in operation as a general cargo handling port area (maximum water depth: 7m).

Current owner and operator are both PTSC (PetroVietnam Technical Service Corporation), an affiliate of

PetroVietnam.

- A project is under way to reassign the general cargo handling function of Son Han port area to Tho Quang

port area.


- In 2015 handling of general cargo was shifted as a first phase to Tho Quang port area from Son Han port area.

Enlargement of general cargo handling capacity is being planned as the second phase in the future.

Son Han port area (3)

Present status 1)

- Son Han port area is located on the left coast of the estuary of Han River, location which is adequately distant

from the downtown of Da Nang City. It is owned by VINALINES and operated by a large number of private

companies. Son Han is playing a role to service general cargo and tourist ships (Maximum water depth: 5m)


- Lately, the function as the terminal for small-sized tourist ships has been consolidated on account of its

proximity to the downtown of Da Nang City, which background has resulted in shifting its general cargo

handling function to Tho Quang port area.

Lien Chieu port area (4)

Present status 1)

- A Pre-Feasibility Study on the development of Lien Chieu port area is under way through a local consultant

entrusted by Da Nang City People’s Committee. At resent all excepting environment related items is being

processed for the internal approval of the Committee.

- Currently only a small-scale port facility to discharge petroleum product is in operation being managed by a

private company.


- Since demand for container handling at Tien Sa port area has exceeded its current facility capacity,

construction of a new port in Lien Chieu port area is considered necessary.

11

Cargo handling volume of Da Nang Port 3.2

Table 1-5 shows yearly changes in cargo handling volume and the number of passengers at Da Nang Port.

Cargo handling volume has been steadily increasing, and container cargo in particular is showing a rapid

growth.

- Container handling volume was 258 thousand TEU in 2015, and the average growth rate during 2008 to

2015 was 22.6%.

- General cargo handling volume was 2,794 tons in 2015, and the average growth rate during 2011 to 2015

was 3.5%.

Table 1-5 Cargo handling volume of Da Nang Port

Year Cargo

volume Imports Exports Domestic Containers Passenger

(tons) (TEU) (persons) 2011 3,868,545 784,891 1,598,134 1,485,520 114,373 38,190 2012 4,423,388 907,818 1,988,074 1,527,496 144,555 56,746 2013 5,010,238 1,345,060 2,361,018 1,304,160 167,447 115,912 2014 6,022,045 1,576,963 2,285,033 2,160,049 227,367 108,279 2015 6,406,000 1,902,441 2,421,106 2,082,453 258,000 51,891

Source: Da Nang Port Joint Stock Company

Operating schedule of ocean liners at Da Nang Port 3.3

The operating schedule of ocean liners calling at Da Nang Port, ports being called at by route and route map are as

follows:

Table 1-6 Operating schedule of container ships regularly calling at Da Nang Port Mon. Tues. Wed. Thurs. Fri. Sat. Sun.

MCC Vinafco

Bien Dong VINALINES

Vinafco

MSC Wanhai SITC

Wanhai SITC

Vietsun Atlantic

Yangming VINALINES Bien Dong

Samudera VietSun Wanhai

PIL MCC

Atlantic


12

Table 1-7 Ports called at by ocean liners by route

Shipping Co. Ports

Wanhai Da Nang – Cat Lai – Kaohsiung – Taichung – Taipei – Hakata – Mizushima – Kobe – Busan

– Taipei – Taichung – Kaohsiung – Da Nang

Da Nang – Hongkong – Shekou – Xiamen – Tokyo – Yokohama – Shanghai – Hongkong –

Cat Lai – Da Nang

Da Nang – Laemchabang – Bangkok – Laemchabang – Hongkong – Shekou – Yantian-

Tokyo – Yokohama – Nagoya – Qingdao – Hongkong – Shekou – Da Nang

MCC Da Nang – SIN(Singapore) – TPP(Tanjung Pelepas- Malaysia) - SIN – HPH- Da Nang

Da Nang – Hongkong – Kaoshung – Taichung – Yantian – Hongkong – Ho Chi Minh –

Sihanoukville – TPP – SIN – Qui Nhon

SITC Da Nang – Hongkong – Shanghai – Ningbo – Shanghai – Hongkong – Haiphong – Da Nang

Da Nang - Chu Lai – Leam Chabang – Jakarta – Laem Chabang – Ho Chi Minh – Qinzhou –

Haiphong – Shekou – Xiamen – Inchon

Yang Ming Da Nang – Hongkong – Kaohsiung(No.6) – Kaohsiung(No.3) – Taichung -

Kaohsiung(No.6) – Kaohsiung(No.3) – Hongkong(M/S) – Haiphong – Da Nang

IAL Da Nang – Hongkong – Shekou – Xiamen – Tokyo – Yokohama – Shanghai – Hongkong –

Cat Lai – Da Nang

CMA Da Nang – Quinhon – Ho Chi Minh – Port Kelang – Haiphong – Da Nang

PIL Da Nang – Quinhon – Singapore – Hai Phong – Da Nang

Samudera Da Nang – Quinhon – Singapore – Hai Phong – Da Nang

MSC Da Nang – Quinhon – TPP(Tanjung Pelepas) – Singapore – Hai Phong – Da Nang

GMD Da Nang – Hai Phong Kongkong – Hai Phong – Da Nang

Bien Dong Da Nang – Qui Nhon – Cai Mep(HCM) – Ben Nghe(HCM) – Da Nang

Da Nang – Tan Vu(Hai Phong) – Da Nang – Ben Ngje(HCM) – Da Nang

Vinafco Da Nang – Cua Lo(Vinh) – Ben Nghe(HCM) – Da Nang

Da Nang – Hai Phong – Ben Hghe(HCM) – Da Nang

Vietsun Da Nang – Chua Ve(Hai Phong) – Khanh Hoi(HCM) – Da Nang

Da Nang – Khanh Hoi(HCM) – Chua Ve(Hai Phong) – Cua Lo(Vinh) Da Nang

Atlantic Da Nang – Doan Xa(Hai Phong) – Da Nang – Ben Nghe(HCM) – Da Nang

VCSC Da Nang – Doan Xa(Hai Phong) – Tan Thuan(HCM) – Da Nang

Tan Cang Da Nang – Cang Dau thuc vat Q7(HCM) – Tan Cang 128(Hai Phong) – Da Nang


13

Figure 1-3 Route map of container ships regularly calling at Da Nang Port (1)

Source: METI Study Team (Colors in the maps are intended to distinguish routes)

14

Figure 1-4 Route map of container ships regularly calling at Da Nang Port (2)

Source: METI Study Team (Colors in the maps are intended to distinguish routes)

15

Chapter 2 Study Methodology

1. Contents of the Study

In this Study, the Pre-Feasibility Study conducted by the local consultant TEDIPORT is reviewed and necessary

investigations are added to the following items:

Demand forecast (1)

Cargo demand up to year 2030 is estimated on the basis of the relation between Vietnam’s GDP and port cargo

handling volume, division of functions with other ports, etc. Demand for passengers who mainly use

international cruise ships is estimated by taking into account, ship assignment route, type of ship, number of

ship, actual number of passengers, future trend of GDP and so forth.

Port planning (2)

Planning of an efficient and environmentally friendly minimum port facility arrangement is studied, taking into

consideration cargo and passenger demand, maximum allowable ship size and safety of ship operation. This

Study does not carry out such local surveys as soil survey and bathymetric survey, but conducts rough

simulation analysis for wave conditions that can give significant impacts on port functions.

Terminal planning (3)

Planning of an efficient and safe cargo and passenger terminals and procurement of equipment and materials

are studied on the back of the experience and achievement of Yokohama Port Corporation that has been

engaged for long in port facilities construction, operation and management, control and maintenance at

Yokohama Port. Furthermore, study is made of the energy saving aspect including introduction of equipment

being excellent in energy saving efficiency and utilization of recycled energy that take into account as well the

achievement and studies realized at Yokohama port.

Road planning (4)

Study is made of the burden that the expansion of port facilities may give to the existing surrounding roads, and

impacts on the current and future road planning of Da Nang City.

Design and estimation of port facilities (5)

Outline design of major port facilities (breakwater, wharf, seawall, reclamation, navigation channel, berth) is

made on the basis of the existing data of natural conditions and in accordance with the Japanese Technical

Standards and Commentaries for Port and Harbour Facilities (July 2007, The Ports and Harbours Association of

Japan). Estimation of project cost is also made in consideration of information, such as working cost estimation,

unit labor cost and unitary prices for procurement from abroad which is available in Da Nang City. Furthermore,

possibility of utilizing Japanese technology is studied sufficiently as regards the execution method, materials

and products of work.

16

Business plan by PPP method (6)

On the premise of implementing this project under the collaboration of the public and private sectors

(envisaging acquisition by Japanese company(ies) of the right to operate the business), division of roles

between the said sectors, funding plan, project implementation system, etc. are studied.

Economic and financial analysis (7)

National economic profitability expectable from the project implementation is appraised on the basis of benefits,

such as saving in transportation cost, reduction in transportation period, and expenditure for construction and

operation. In addition, business profitability is valuated on the basis of income and expense derived from the

business operation, and reduction in the emissions of CO2 and NOx is calculated that relates to the valuation of

investment in the port construction project. Furthermore, appraisal is made of the effect on the stable supply of

energy for Japan that can be expected by shifting transportation method from the current haulage of cargo by

truck to marine transportation by ship.

Environmental and social considerations (8)

Impacts on the surrounding environment by the implementation of the project is appraised on the basis of the

existing information and material and in accordance with the relevant environment-related laws and regulations

of Vietnam as well as JICA’s guideline on environmental and social considerations, and necessary measures are

studied to mitigate negative impacts. Assessment of assumed environmental impacts is made in terms of

various alternatives, including the “Without case” as well as candidate sites for project implementation. In

addition, conforming to the motto of “Creating an Eco-City” declared by Da Nang City, planning of an

environment-compatible port city is made with a backup of the experience and achievements of Yokohama

City.

Matching with the urban development project of Dan Nang City (9)

The contents of this Project are studied to enable finding synergetic effects from possible agreement between

the scenarios of the future urban development project of Da Nang City and this port development project

2. Method and system of study

As shown in the figure below, this Study was carried out by Japan Port Consultants, Ltd. (JPC), the Overseas

Coastal Area Development Institute of Japan (OCDI), and the cooperative enterprises of Nippon Koei Co., Ltd.,

ERM Japan, Ltd. and Yokohama Port Corporation, in their respective specialized fields.

Furthermore, this Study was carried out with participation of Japan’s representative port city - Yokohama City

and under the inner-city cooperative arrangement between Yokohama City and Da Nang City. During the

Study, verification of the concept of the central part of Da Nang City People’s Committee was being made

through the inner-city cooperation of the two cities, and derived achievements were directly fed back to the

center of the People’s Committee to make the results of the Study more effective. In addition, the Study was

17

implemented with Yokohama City’s advice and supports that are based on the knowledge of port and harbor

planning, maintenance, administration and operation, and urban development.

Local staff of JPC Ha Noi Representative Office also assisted above companies in coordinating work with the

relevant local organizations, such as making meeting appointment and collection of necessary information and

data. Furthermore, study and consultation were effected with MOT and Da Nang City People’s Committee as

the local counterparts.

Figure 2-1 Formation of survey

Inter-City Cooperation Group

Kenji SASA, Yuki ITO (City of Yokohama)

Masakazu OKUNO (City of Yokohama)

Economics Group

Demand Forecast: Takuma TAKAHASHI (JPC)

Economic and Financial Analysis: Fumio SUZUKI (OCDI)

PPP Project Plan: Katsuyasu MIURA (OCDI)

Project Manager

/Port Planning

Koichiro HARADA（JPC）


Overseas Project Department

Technical Group

Environment Group

Conceptual Design and Cost Estimation: Yukinobu YOSHIKAWA (JPC)

Terminal Planning: Atsushi KITAMURA (Yokohama Port Corporation)

Road Planning: Takayasu NAGAI (Nippon Koei Co.,LTD.)

Wave and Burial Simulation: Toru YAMABE (JPC)

Environmental and Social Considerations: Masato MOTOKI (ERM Japan)


Ha Noi Representative Office

18

3. Schedule of the Study

Implementation period (1)

Sep. 9, 2016 - Feb. 28, 2017

Schedule of study and survey (in Vietnam and Japan) (2)

Items 2016 2017 Aug. Sep. Oct. Nov. Dec Jan. Feb.

1. Study in Vietnam 1) Meetings, surveys, data collection 2) Explanation to local relevant

organizations 3) Reporting to local relevant organization 2. Study in Japan 1) Preparation 2) Cargo demand forecast, Port Planning 3) PPP project plan 4) Conceptual design and cost estimation 5) Economic and financial analysis 6) Environmental and social considerations 7) Meeting to present Interim Report 8) Final Report

Results of local survey (3)

Local survey was carried out a total of three times during the period of the Study. Respective itineraries and

meeting parties are as follows:

1st local survey: Sep. 14 - Oct. 4, 2016 1)

Table 2-1 Itinerary of 1st local survey (1)

Company JPC JPC OCDI OCDI Name Koichiro HARADA Takuma TAKAHASHI Sumio SUZUKI Katsuyasu MIURA Sep.14 Haneda > Ha Noi Haneda > Ha Noi Haneda > Ha Noi Haneda > Ha Noi

Sep.15-16 Ha Noi Ha Noi Ha Noi Ha Noi Sep.17 Ha Noi > Da Nang Ha Noi > Da Nang Ha Noi > Da Nang Ha Noi > Da Nang

Sep.18-21 Da Nang Da Nang Da Nang Da Nang Sep.22 ditto ditto Da Nang > Ha Noi Da Nang > Ha Noi Sep.23 ditto ditto Ha Noi > Da Nang Ha Noi > Da Nang

Sep.24-26 ditto ditto Da Nang Da Nang Sep.27 ditto ditto ditto Da Nang > Narita Sep.28 ditto ditto ditto Sep.9 ditto Da Nang > < Ho Chi Minh Da Nang > < Ho Chi Minh

Sep.30-Oct.1 ditto Da Nang Da Nang Oct.2 Da Nang > Ha Noi Da Nang > Ha Noi Da Nang > Ha Noi Oct.3 Ha Noi Ha Noi Ha Noi Oct.4 Ha Noi > Haneda Ha Noi > Haneda Ha Noi > Haneda

Draft Final Final

19

Table 2-2 Itinerary of first local survey (2)

Company YPC NK ERM Japan City of Yokohama

Name Atsushi KITAMURA Takayasu NAGAI Masato MOTOKI Masakazu OKUNO Kenji SASA

Sep.14 Haneda > Ha Noi Sep.15-16 Ha Noi

Sep.17 Ha Noi > Da Nang Sep.18 Narita > Da Nang Narita > Da Nang Da Nang

Sep.19-20 Da Nang Da Nang ditto Sep.21 ditto ditto Da Nang > Narita

Sep.22-23 ditto ditto Sep.24 Da Nang > Narita Da Nang > Narita Sep.25 Narita > Da Nang

Sep.26-30 Da Nang Oct.1 Da Nang > Narita

Table 2-3 Meeting parties and outline of meeting

Date Meeting & Interviewing Partners Outline of Meeting Topics

Sep.15 MOT Explanation of the survey contents and key points, and exchange of opinions for the development of Lien Chieu port area.

JICA Vietnam ditto

Sep.16

JETRO Ha Noi Office Confirmation of actual situations of Japanese companies in Vietnam, and request for meeting appointment with Japanese companies in Da Nang.

Japanese Embassy Explanation of the survey contents and key points, and exchange of opinions for the development of Lien Chieu port area.

Sep.19 Department of Planning and Investment ditto

Sep.20

Da Nang City People’s Committee ditto

Department of Natural Resources and Environment

Collection of information related to environmental consideration study such as natural reserves, and environmental laws

Department of Agriculture and Rural Development

Collection of information related to environmental consideration study, such as fishing activities.

Da Nang Maritime Administration Collection of information related to port management and port fee collection.

Sep.21 Danang Port Joint Stock Company

Collection of information related to Tien Sa port area, and exchange of opinions for the development of Lien Chieu port area.

Da Nang Industrial Parks and Export Processing Zone Authority

Collection of information related to industrial parks and zones.

Sep.22

Da Nang Power Company Collection of information related to power supply situation in Da Nang City.

DPI Environment Collection of information related to environmental consideration study, such as current environmental situation and environmental measures.

Environmental Protection Agency ditto MOT, Hanoi, International Cooperation Department

Collection of information related to port organization, financial arrangement and others.

Sep.23 VINAMARINE ditto

Sep.27 Fujikura Automotive Vietnam Ltd. (FAVL)

Collection of information related to the company’s current status, future planning and cargo demand forecast.

DAIWA VIETNAM LTD Ditto VIJACHIP Ditto

Sep.28 MABUCHI MOTOR DANANG LTD. Ditto

20

VSIP Collection of information related to the current status and future planning of the industrial park, as well as cargo demand forecast, etc.

Sep.29 MAERSK Vietnam Collection of information related to ships calling at Da Nang Port, cargo handling situation, etc.

Oct.1 Da Nang Joint Stock Company Confirmation of financial situation and collection of information related to the situation of Phase II in Tien Sa port, etc.

Oct.3 K Line Vietnam Collection of information related to ships calling at Da Nang Port, cargo handling situation, etc.

2nd local survey: Dec. 11 – 17, 2016 2)

Interim reporting of the local survey carried out to date was made to each of the parties visited.

Table 2-4 Itinerary of 2nd local survey

Company JPC OCDI Yokohama City

Name Koichiro HARADA Takuma TAKAHASHI

Sumio SUZUKI Katsuyasu MIURA

Masakazu OKUNO Kenji SASA

Dec.11 Haneda > Ha Noi

Dec.12 Visit to the Japanese Embassy Ha Noi > Da Nang

Dec.13 Da Nang: Meeting with DPI and Da Nang City People’s Committee Dec.14 Da Nang: Meeting with Da Nang Joint Stock Company

Dec.15 Da Nang > Ha Noi Meeting with MOT

Dec.16 Ha Noi Dec.17 Ha Noi > Haneda

3rd local survey: Feb. 12 – Feb. 18, 2017 3)

Final reporting of the local survey was made to each of the parties visited.

Table 2-5 Itinerary of 3rd local survey

Company JPC OCDI Yokohama City

Name Koichiro HARADA Takuma TAKAHASHI

Sumio SUZUKI Katsuyasu MIURA

Masakazu OKUNO Yuki ITO

Feb.12 Haneda > Ha Noi Feb.13 Visit to the Japanese Embassy and JICA Feb.14 Visit to MOT

Ha Noi > Da Nang Feb.15 Visit to DPI, Da Nang City People’s Committee, Da Nang Joint Stock Company Feb.16 Da Nang > Ha Noi Feb.17 Visit to Vinamarine Feb.18 Ha Noi > Haneda

21

Chapter 3 Justification, Objectives and Technical

Feasibility of the Project

1. Project background, necessities, etc. Da Nang Port situated in Da Nang City in the Central Vietnam comprises, as shown in the Project Site Map of the

frontispiece, the cargo handling port areas of Tien Sa, Tho Quang and Lien Chieu, as well as Song Han port area

being utilized by small-size sightseeing ships. In the Vietnam Ports Development Master Plan (targeting year

2030), Da Nang Port is designated as a Class I Port (major international commercial port) in the central region

(Group 3). The port is the third largest port in Vietnam after Saigon Port in the South and Hai Phong Port in the

North in terms of cargo handling volume. A major part of container cargoes is being handled in the Tien Sa port

area, with its volume showing a high annual growth rate of approximately 23% on average in the last eight years,

and 24% (temporary estimate) in 2016. As shown in Figure 3-1 and Figure 3-2 below, container handling volume

in Da Nang Port has been increasing at a higher rate in comparison with general cargoes. In 2015 the container

handling volume accounts for approximately 63% (258,000 TEU) of the total volume (408,000 TEU) in the

Central Region.

Figure 3-1 General cargo handling volume by region

Source: Homepage of Vietnam Seaport Association

Figure 3-2 Container cargo handling volume by region

Source: Homepage of Vietnam Seaport Association

0

50,000

100,000

150,000

200,000

250,000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

(000Ton) NORTH CENTRAL SOUTH

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

(000Ton) CENTRAL Da Nang

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

(TEU) NORTH CENTRAL SOUTH

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

(TEU) CENTRAL Da Nang

22

Development Projects of Da Nang Port by Japanese ODA date back to 1998 when JICA completed the “Study for

Port Development Project in the Middle Central Key Region of Vietnam.” In the same year, OECF implemented

“Special Assistance for Project Formation for Da Nang Port Expansion Project” (hereafter called “SAPROF

Study”, thereby reaching agreement with the Vietnamese government to repair Tien Sa port area (in the first

stage), to expand it (second stage) and to construct a new port in Lien Chieu port area as the third stage. On the

basis of this agreement, Da Nang Port Improvement Project (Phase I) was implemented in 1999 to 2004 using

Japanese ODA Loan.

Years later, cargo handling in Tien Sa increased almost as estimated. Although actual demand has exceeded the

volume at which second stage works were assumed to become necessary, further capacity expansion has not been

implemented. Consequently this is causing chronic congestion and a situation to wait for a ship to sail in the cargo

terminals that have become comparatively small. Furthermore, increasing calling of international cruise ships at

the port in the recent years has been spurring the terminal congestion, generating a dangerous status by the

intersection of physical and human flows. With a view to ameliorating this situation, “Preparatory Study for Da

Nang Port Improvement (Phase II)” was implemented by JICA in 2014, which was concluded by proposing an

early enhancement of container handling capacity in Tien Sa port area by utilizing Japanese ODA Loan, as well as

a time schedule for constructing a new port in Lien Chieu port area that takes into account development

constraints existing in Tien Sa port area. The Ministry of Transport, however, determined to put into practice the

Tien Sa Port Improvement Project Phase II by resorting to privately raised funds on top of the proper budget of Da

Nang Port Joint Stock Company, and started works in 2016 targeting completion in 2018.

Photo 3-1 Present status of Tien Sa port area

Left: Cargo boats waiting offshore for passenger boats to leave the port Center: A cruise ship in berth in a close distance from a cargo boat Right: Phase II port improvement works under way Source: Left taken by METI Study Mission, Center: obtained from VINAMARINE, Right: taken by METI Study Mission

In the meantime, Da Nang City People’s Committee has proposed to give priority to earlier implementation of the

new port development project in Lien Chieu that is located in the western side and has less interference with the

sighting-seeing areas and better access to industrial districts from the outer loop highways, rather than the

expansion of Tien Sa port area that is located in the east side of the city, overlapped by the rapidly developing

sightseeing area and facing congestion and danger of accident due to the traffic of port cargo carrying trucks. The

committee further proposed to materialize as promptly as possible a division of functions between Lien Chieu (to

handle cargo) and Tien Sa (to accommodate large-size cruise ships).

23

As stated above, under the circumstances where further reinforcement of cargo handling capacity vis-à-vis future

demand following the completion of the Phase II Improvement Project in the Tien Sa port area is difficult due to

the hilly areas in the western part of port construction land, constraints in the expansion of land because of Navy’s

facilities, possible negative impacts on the sightseeing areas, etc., it is necessary to construct a new port in Lien

Chieu port area as proposed in the SAPROF Study in 1998.

Strengthening the cargo handling capacity of Da Nang Port will prevent the existing situation that cargo is

inevitably land transported to Saigon Port in the South or Hai Phong Port in the North over a distance of

approximately 1,000 km due to the shortage of cargo handling capacity in Tien Sa port area, and facilitate direct

marine transport through Lien Chieu port area. As a result, it will largely enhance overseas transport logistics of

the companies established in the hinterland of Da Nang Port (including approximately 100 Japanese companies

being member of Japanese Chamber of Commerce and Industry) in respect to time and economic rationality.

Taking into consideration the difference in energy consumption and environmental burdens, it will also be

significantly conducive to the mitigation of energy supply and demand imbalance in Vietnam by reducing

transport energy consumption that accounts for 15% of the nation’s total energy consumption.

In addition, it is important for the sightseeing and IT service related establishments that share approximately a half

of the local subsidiaries of Japanese companies to prevent adverse impacts of further development of Tien Sa on

the sightseeing area, possibility which is being pointed out by the Da Nang City People’s Committee.

2. Basic policy, decisions, etc.

Port development Master Plans 2.1

Port development projects in Vietnam have been implemented in accordance with the Port Development Master

Plan 2020 – 2030 (entitled “Vietnam Seaports Development Plan up to 2020 with the vision to 2030”) proposed

by the Ministry of Transport and approved by the Prime Minister on December 24, 2009.

Port development projects in the central region that includes Da Nang are implemented in line with the detailed

port development Master Plan for the Central region (Group 3) 2020 – 2030 approved by the Prime Minister on

July 29, 2016 (entitled “Detailed Planning of Middle Central Vietnam Seaport Group (Group 3) up to 2020 with

the vision to 2030”). In this detailed Master Plan, future cargo handling volumes in the port areas of Tien Sa, Tho

Quang and Lien Chieu that constitute Da Nang Port are planned as shown in Table 3-1. Compared with the latest

volumes (as of 2015) shown in Figure 3-1 and Figure 3-2, general cargo volumes are planned to be 1.2 times and

1.4 times for 2020 and 2030, respectively. Likewise, container cargoes 1.8 times and 5.4 times for 2020 and 2030,

respectively.

24

Table 3-1 Future cargo handling volume

Units: million tons

Port Areas 2020 2030 General Container Transit General Container Transit

Tien Sa 2.6 5.0-6.1 1.0-1.3 2.7-3.0 7.5-8.5 1.7-2.3 Tho Quang 0.9-1.3 --- --- 1.4-1.7 --- --- Lien Chieu --- --- --- --- 7.5-10.0 ---

Source: Detailed Planning of Middle Central Vietnam Seaport Group (Group 3) up to 2020 with the vision to 2030

Lien Chieu Port Development Project 2.2

As already mentioned, since Tien Sa Port expansion has a constraint in securing land, agreement was reached

between the Ministry of Transport (“MOT”) and Da Nang City People’s Committee that construction of a new

port in Lien Chieu port area should be implemented subsequent to the completion of the Phase II Improvement

Project being underway as a PPP project with separate upper and lower management units, in the same manner as

the Lach Huyen Port Infrastructure Construction Project being implemented in the northern Vietnam. The

agreement has been approved in principle by means of Prime Minister’s Notification: No.363/TB-VPCP. 04

November 2016 (Attachment A) as follows:

Notification on Lien Chieu Port Development Project Using Japanese ODA Loan by PPP (Excerpt)

The project is in principle approved. In order to commence the project in 2018, MOT and Da Nang City People’s

Committee shall put into practice the instructions in the Prime Ministerial Notification: No. 229/TB-VPCP, 11

August 2016 as soon as possible.

(The gist of the Prime Ministerial Notification: No. 229/TB-VPCP, 11 August 2016 (Attachment B) is: “Da Nang

City People’s Committee and MOT shall clearly demonstrate the method to fund the project including ODA and

the capability of repayment. Besides, MOT shall revise the “Detailed Planning of Middle Central Vietnam

Seaport Group (Group 3) up to 2020 with the vision to 2030” in accordance with the relevant regulations.”)

It is assumed that the public sector portion of the project, comprising mainly construction of breakwater, seawall,

access road, and dredging of berth and navigation channel, shall be implemented by ODA funds, and the private

sector portion comprising construction of terminal, procurement of cargo handling equipment and operation of

terminal, shall be implemented by using equity fund raised by an SPC established by private companies

concerned.

At this moment the project owner is not determined, but it is expected that either MOT, the same as the case of

Lach Huyen Port Infrastructure Construction Project, or Da Nang City People’s Committee will become the

project owner of the public sector portion of the Project. Da Nang City People’s Committee has proposed to the

Prime Minister that it conducts a Pre-Feasibility Study on its own terms by entrusting it to a local consultant, and

to become the project owner by availing itself of the result of the Study.

In the meantime, MOT also claims that it will become the project owner as in the case of the Lach Huyen project,

and is standing by at present to watch the reply of the Prime Minister to the proposal of Da Nang City People’s

Committee which is scheduled to be issued during the first half of 2017. On December 26, 2016 Da Nang

25

People’s Committee took a further action by addressing its Proposal No. 10444/UBND-SKHDT, 26 December

2016 (Attachment C) to the Ministry of Planning and Investment, which includes the under-mentioned excerpt,

claiming that it becomes the project owner, and presented a methodology of fund raising for the project including

by the assumed ODA Donor as instructed in the above-mentioned Prime Ministerial Notification N.

363/TB-VPCP, 04 November 2016.

Proposal for Lien Chieu Port Development Project by PPP (Excerpt)

- Project Owner: Da Nang City People’s Committee

- Project Implementation Manager: Department of Transport in Da Nang City People’s Committee

- Project Construction & Investment Manager: Project Management Unit for Transport Facility Construction

and Investment in Da Nang City People’s Committee

- Assumed ODA Donor: JICA

- Estimated total project cost of Phase I (including indirect project cost): 7,378 billion VND to be funded as

follows:

Public sector portion: 3,426 billion VND to be raised from the following two sources:

Da Nang City People’s Committee (15%): 514 billion VND,

ODA Loan (85%): 2,912 billion VND with the following two beneficiaries:

The Vietnamese Government (70%): 2,038 billion VND

Da Nang City People’s Committee (30%): 874 billion VND,

Private sector portion: 3,952 billion VND

As mentioned above, both MOT and Da Nang City People’s Committee have agreed to implement construction of

a new port in the Lien Chieu port area as a PPP project with separate upper and lower management units, leaving,

however, conceptual differences between them in respect to the upper limit of Tien Sa port area’s cargo handling

volume and the division of functions between Tien Sa and Lien Chieu port areas as shown in Table 3-2.

Table 3-2 Differences in project implementation policy between the two assumed project owners





The upper limit will be 12 million tons/year: the cargo handling capacity after the completion of Phase II Improvement Project being underway at Tien Sa.

Upon operation start-up of Lien Chieu port area, handling of general cargo shall be preferentially shifted from Tien Sa to Lien Chieu. For the time being Tien Sa shall continue to handle certain volume of containers while attending large-size cruise ships.


The upper limit will be 10 million tons/year: a smaller figure than the above due to consideration of the existing port road capacity and the mitigation of traffic congestion occurring in the proximity of the surrounding sightseeing areas.

From the startup of Lien Chieu port operation, handling of general cargo and containers shall be successively shifted from Tien Sa to Lien Chieu, which in the future shall exclusively serve as a tourist port to accommodate large cruise ships.

Da Nang Port Joint Stock Company is highly likely to be the Project Owner of the private sector portion by dint of

the Prime Ministerial Notification No. 63/TB-VPCP (Attachment D) dated 7 February 2017.

26

3. Project outline The report of the Pre-Feasibility Study conducted by Da Nang City People’s Committee outlines the Project as described below. Furthermore, METI Study Team reviewed the contents of the Pre-Feasibility Study in respect principally to technical, economic and financial, and environmental aspects, appraised the viability of the Project and presented proposed implementation methods taking into account the results of field surveys.

Since the ongoing Tien Sa Port Improvement Project Phase II will, after its completion, handle over-capacitied cargo volume, construction of a new port has been conceived for the Lien Chieu port area which is situated on the opposite side across Da Nang Bay, and a three phased implementation is proposed as shown in Figure 3-3.

The construction periods for the first, second and third phases are being planned to be 3 years, 2 years and 2 years, respectively, with operation startup of the new port targeting 2022, 2030 and 2050, respectively to meet corresponding cargo demand forecast.

Figure 3-3 Project development plans

At completion of Phase I (2022) At completion of Phase II (2030)

At completion of Phase III (2050)

Source: Pre-Feasibility Study (TEDIPORT Dec., 2016)

General cargo wharf 1 berth Container wharf 1 berth

General cargo wharf 2 berths Container wharf 3 berths

General cargo wharf 4 berths Container wharf 8 berths

Seawall

Breakwater

Seawall Seawall

27

At the Lien Chieu project site, a privately-owned small-scale jetty to discharge oil products (for accommodating

3,000 DWT to 7,000 DWT tankers) and a cement plant jetty are being operated at present as shown in Photo 3-2,

and there are no port facilities that handle general cargo or containers. The oil product discharging jetty is planned

to be displaced to outside the breakwater of the new port at the implementation of Phase III.

The cargo terminal of the new port is planned to be connected with the national highway that passes through the

west of Da Nang City with an approximately 3 km long access road (1.5 km on land and 1.5 km above the sea). In

Phase III, a railway siding to the cargo terminal is also scheduled. Since in Phase I the access road portion above

the sea will pass over the pipeline that links the oil jetty with the petroleum product storage facilities on land, a

sufficient discussion with people concerned is necessary at the time of planning and designing the access road.

Photo 3-2 Private oil product discharging jetty and cement plant pier in operation on the Project site

Source：VINAMARINE

The Project site does not include areas that require special environmental considerations, such areas as fauna and

flora protection zones. As shown in the Project Location Map in the frontispiece, port facilities of the new port

will be constructed by reclaiming land from the sea and hence will not require resettlement of people. For the

construction of an access road, however, resettlement involving several tens of families or so living near the

shoreline is expected to take place.

Implementation of the Project will require implementation of Environmental Impact Assessment and approval of

the Ministry of Natural Resource and Environment. The major impact of the Project on the environment is

expected to be water quality contamination in the surrounding seas caused by the dredging of approximately

5,000,000 m3 of navigation channels and berths, disposal of seabed soil and reclamation of port construction site,

all of which are being planned in Phase I of the Project.

Direct project cost (except administrative expenses, benefits, contingencies, price escalation factors) for the first,

second and third phases is estimated to be 28.7 billion JPY, 28.8 billion JPY and 65.3 billion JPY, respectively, of

which the breakdown of Phase I cost is indicated in Table 3-3. Furthermore, 14.2 billion JPY and 14.5 billion JPY

are assumed to be raised from the public fund and private fund, respectively.

PTSC BOUY (PV OIL)

PETEC BOUY

CEMENT HAI VAN PORT

PTSC BOUY (PV OIL)

PETEC BOUY

LIEN CHIEU BOUY (K83)

CEMENT HAI VAN PORT

KHO 182 (K83)

KHO VINAPCO

KHO PTSC (PV OIL)

KHO PETEC

28

As stated before, since the Project is planned to be implemented under a PPP arrangement, operation of the cargo

terminal is expected to be assumed by a private company selected through bidding performed by the project

owner. A large number of private companies in and outside Vietnam, including Da Nang Port Joint Stock

Company that is administrating and operating Tien Sa port area, are showing interest in participating in the

bidding for selecting a company to operate Lien Chieu new port.

Table 3-3 Breakdown of direct project cost of phase I (Pre-Feasibility Study)

Source: Pre-Feasibility Study (TEDIPORT Dec., 2016)

4. Various study items required for the Project

Demand forecast 4.1

METI Study Team conducted a demand forecasting study on the basis of the past changes in Da Nang Port’s

cargo handling volume, those in the gross production of Da Nang Port’s hinterland, and those in Vietnam’s GDP,

by setting base year and target year on 2015 and 2030, respectively, thereby reviewing the result of demand

forecast made in the Pre-Feasibility Study. As a result, container cargo handling volume and general cargo volume

in 2030 were estimated to be 1,287 thousand tons and 4,237 thousand tons, respectively, resulting to be more

conservative growth rates in cargo handling volume than the forecasts in the Pre-Feasibility Study (1,887

thousand tons for container cargo and 6,770 thousand tons for general cargo).

As regards passenger demand mainly for international cruise ships, METI Study Team conducted demand forecast

on the basis of fleeting route, number of ships, actual number of passengers and GDP transition, setting base year

29

and target year on 2015 and 2030, respectively. As a result, an incremental tendency was obtained in the results of

the number of passenger ships and passengers from 57 ships and 52 thousand persons, respectively, in 2015 to 76

ships and 79 thousand persons, respectively in 2030.

The particulars of the forecast are as follows:

Cargo demand forecast (1)

Method of forecasting demand 1)

Counting on the GDP elasticity method being mainly utilized in overseas port related projects, METI Study

Team conducted demand forecast for container cargo (in terms of TEU) and general cargo (ditto of tons) by

taking the following steps. A similar method was adopted in the Pre-Feasibility Study.

Step 1: To calculate elasticity from the Compound Average Growth Rate (CAGR) of the past actual GDPs

and the CAGR of past actual port cargo handling volumes. (Elasticity = CAGR of past actual port

cargo handling volumes / CAGR of past actual GDPs)

Step 2: To multiply the elasticity obtained from the Step 1 above by CAGR of future GDPs to calculate

CAGR of future port cargo handling volumes. (CAGR of future port cargo handling volumes =

elasticity x CAGR of future GDPs)

Step 3: To multiply the CAGR of future port cargo handling volumes obtained from the Step 2 above by the

cargo handling volume of the base year (2015), and continue to successively multiply forecasted

cargo volumes for each year by CAGR of future port cargo handling volumes, thereby calculating

the future cargo handling volume in the targeted year. (Future cargo handling volume = CAGR of

future cargo handling volume x forecasted cargo volume of the previous year)

Prerequisites 2)

Calculation of elasticity a)

Elasticity is calculated from the CAGR of the past actual GDPs of CKEZ (Hue, Da Nang, Quang Nam,

Quang Ngai, Binh Dinh) and the CAGR of the past actual port handling volumes.

The CAGR of the past actual GDPs of CKEZ utilized in forecasting demand for container cargo and general

cargo, and CAGR of the past actual port cargo handling volumes are as shown in Table 3-4 to Table 3-7.

From Table 3-4 to Table 3-7 elasticities of container cargo and general cargo are set as follows:

✓Elasticity of container cargo: 22.6%/ 10.7%＝2.11

✓Elasticity of general cargo: 3.5%/ 8.7%＝0.40

30

Table 3-4 CKEZ’s CAGR of GDP (Results of past 8 years: container)

Table 3-5 CAGR of container cargo in Tien Sa port area (Results of past 8 years: container)

Table 3-6 CKEZ’s CAGR of GDP (Results of past 5 years: general cargo)

Table 3-7 CAGR of general cargo in Da Nang Port (Results of past 5 years: general cargo)

Establishment of CAGR of future GDP b)

METI Study Team set CAGR of future GDPs by assuming the following three alternative cases:

✓Case1: 10.7% (Assuming SKEZ’s GDP to keep growing at the CAGR of the actual GDPs)

✓Case2: 6.2% (Assuming that GDP growth rates will evolve in line with the future GDPs estimated by IMF)

✓Case3: 5.3% (Assuming that GDP growth rates will develop along the forecasts of private international

financing organizations or private international think tanks)

Table 3-8 shows the method of setting the CAGR of GDP in Case 2. The CAGR for Case 3 was obtained by

employing the CAGR estimated by PwC for the period of 2014～2050 and the CAGR for 2021～2030

forecast by the Bank of Australia and New Zealand.

Furthermore, the Pre-Feasibility Study has set a CAGR of future GDPs at 9.6%

(Billion dongs)

2008 2009 2010 2011 2012 2013 2014 2015Vietnam 1,923,749 2,027,590 2,157,828 2,292,483 2,412,778 2,543,596 2,695,796 2,875,856 5.9%CKEZ 100,383 112,727 134,648 146,904 158,921 172,895 185,739 204,953 10.7% Hue 15,133 17,031 19,158 21,213 23,240 25,074 27,123 29,566 10.0% Da Nang 24,809 27,469 32,777 36,631 38,892 41,882 45,454 49,416 10.3% Quang Nam 19,613 21,779 24,611 27,708 30,734 34,134 38,720 44,283 12.3% Quang Ngai 17,764 21,495 29,275 31,131 33,422 37,483 37,710 42,094 13.1% Bin Dinh 23,064 24,953 28,827 30,221 32,633 34,322 36,732 39,594 8.0%Source: Statistical Yearbook (Vietnam and province)

Year Average GrowthRate(%)

Region

(TEU)

2008 2009 2010 2011 2012 2013 2014 2015Tien Sa 61,881 69,720 89,199 114,373 144,555 167,447 227,367 258,000 22.6%


Average GrowthRate(%)

YearRegion

(Billion dongs)

2008 2009 2010 2011 2012 2013 2014 2015Vietnam 1,923,749 2,027,590 2,157,828 2,292,483 2,412,778 2,543,596 2,695,796 2,875,856 5.8%CKEZ 100,383 112,727 134,648 146,904 158,921 172,895 185,739 204,953 8.7% Hue 15,133 17,031 19,158 21,213 23,240 25,074 27,123 29,566 8.7% Da Nang 24,809 27,469 32,777 36,631 38,892 41,882 45,454 49,416 7.8% Quang Nam 19,613 21,779 24,611 27,708 30,734 34,134 38,720 44,283 12.4% Quang Ngai 17,764 21,495 29,275 31,131 33,422 37,483 37,710 42,094 7.8% Bin Dinh 23,064 24,953 28,827 30,221 32,633 34,322 36,732 39,594 7.0%Source: Statistical Yearbook (Vietnam and province)

RegionYear Average Growth

Rate(%)

(Ton)

2008 2009 2010 2011 2012 2013 2014 2015Tien Sa 2,438,883 2,616,451 2,917,151 2,838,907 2,794,000 3.5%

Tho Quang 144,600Total 2,438,883 2,616,451 2,917,151 2,838,907 2,938,600

Source: Da Nang Port Company

RegionYear Average Growth

Rate(%)

31

Table 3-8 CAGR of obtained from the future GDPs estimated by IMF

Establishment of CAGR of future port cargo handling volumes c)

From a) and b) above, CAGRs of future handling volumes of container cargo and general cargo were

established as follows:

Table 3-9 CAGR of future container cargo volumes

Elasticity (1)

CAGR of future GDPs (2)

CAGR of future port cargo handling volumes (3)=(1) x (2)

Case 1 2.11 10.7% 22.6% Case 2 2.11 6.2% 13.1% Case 3 2.11 5.3% 11.2%

Table 3-10 CAGR of future general cargo volumes

Elasticity (1)

CAGR of future GDPs (2)

CAGR of future port cargo handling volumes (3)=(1) x (2)

Case 1 0.40 8.7% 3.5% Case 2 0.40 6.2% 2.5% Case 3 0.40 5.3% 2.1%

Taking into account that an increase in container cargo in line with the containerization shift will face a limit,

and that switching of industrial structure to high technology-oriented industries, METI Study Team estimated

that the CAGR of future container handling volume will develop for the next 5 years of 2016 to 2020 with the

figures shown in Table 3-9, but its growth rates will be reduced from 2021 onward.

The growth rates in 2021 and beyond were estimated by calculating elasticities using past 8 years’ GDPs of

Vietnam and container handling volumes in the country, then estimating elasticities of 2021 onward through the

obtained approximation, and finally multiplying them by the CAGR of future GDPs shown in Case1～Case3

provided in paragraph b) above. The elasticities of the past 8 years and the estimated elasticities for the

subsequent years are shown in Figure 3-4 and Table 3-11, and discounted CAGRs of future container handling

volume provided in Table 3-12.

Furthermore, in view that general cargo is considered to be directly linked to the demand of local industries in

the hinterland, discounting future cargo volumes to the present was not practiced.

(Billion dongs)

2016 2017 2018 2019 2020 2021Vietnam 3,051,283 3,240,463 3,441,372 3,654,737 3,881,330 4,121,973 6.2%Source: International Monetary Fund, World Economic Outlook Database, October 2016 （Gross domestic product, constant prices（National currency））

Average GrowthRate(%)

RegionYear

32

Figure 3-4 Elasticities of the past 8 years and estimated elasticities for the subsequent years

Table 3-11 Estimated elasticities for 2021 onward

Table 3-12 Discounted CAGRs of future container handling volume

Results of demand forecast 3)

The results of estimating future cargo handling volume of Da Nang Port by employing the demand forecast

method shown in 1) and the prerequisites in 2) are in Table 3-14, Table 3-15 and Figure 3-5, Figure 3-6.

Given that growth rates will not likely evolve in the future at the pace of the present CAGR of container cargo

volume (Case 1), and that the actual growth rates recorded of container cargo volume have been evolving at an

extremely high speed, the rates will not likely fall to the assumed lower limits (Case 3) either, and hence

decision was made to preferentially adopt the Case 2 scenario.

METI Study Team judged the adoption adequate taking into account that in Case 2 although future GDPs of

Vietnam whole country are utilized for estimating demand in Da Nang Port, the relation between the nation’s

actual total GDP and container cargo volume (TEU) in Da Nang Port is significantly close as witnessed by the

coefficient of determination R2 standing at as high as 0.98.

Furthermore, the results of interviews METI Study Team had during the local survey with Japanese

manufacturing subsidiaries in Vietnam and the Industrial Park located in Quang Ngai Province are outlined

below. The interviews have turned out that each of the companies is currently tending to increase production

and expecting further increase in customer demand in the future. Since importance of Da Nang Port was

reconfirmed, the results are considered to be conducive to justifying the result of the present demand forecast.

y = -0.0337x + 2.3077

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

Ela

stic

ity

Year 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030Elasticity 1.84 1.80 1.77 1.74 1.70 1.67 1.63 1.60 1.57 1.53

2016-2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030Case 1 22.6% 19.7% 19.4% 19.0% 18.6% 18.3% 17.9% 17.5% 17.2% 16.8% 16.5%Case 2 13.1% 11.4% 11.2% 11.0% 10.8% 10.5% 10.3% 10.1% 9.9% 9.7% 9.5%Case 3 11.2% 9.7% 9.6% 9.4% 9.2% 9.0% 8.8% 8.7% 8.5% 8.3% 8.1%

33

Table 3-13 Outline of interviews with local Japanese subsidiaries

Products Operational tendency in recent years, future plans, etc. Electric harness for automobile

- Latest cargo volume transition shows an incremental tendency, which is expected to continue until 2020 according to the factory’s mid-term plan. Accordingly, factory expansion fully utilizing the company’s own land was completed in May 2016.

- Putting an end to the expansion to be made within the land area, the company may seek establishment of additional factories in other areas including Da Nang and other countries depending on future customer demand.

- The East-West Economic Corridor may be used subject to improvement in road conditions. Fishing outfits

- Production in recent years has been on a rise. Shipments to the U.S.A. have dropped, while deliveries to other countries are increasing.

- The company is planning to increase production capacity by 10% during 2015 – 2016, and to maintain capacity increasing plans until 2020.

Wooden chips - Currently 50,000 DWT class ships are calling at Tien Sa port. Product is loaded at this sole port and shipped out to Japan. There will be no problem in using Lien Chieu port, provided that this port has a similar water depth or more compared with Tien Sa port.

- Distance-wise, there is no big difference between Tien Sa and Lien Chieu, but the latter appears to be more beneficial from the viewpoint of the convenience of traffic.

- At present, shipments are made at the rate of 10 ships/year or so. Shipments to overseas are being conceived. New demand coming out for biomass applications would double the current shipping volume.

Motor for vehicles and printers

- Production has been on a rise recently. In 5 years, a 50% production increase is being planned. Associated upgrade of production facilities will be necessary, but there will be no problem in securing space.

- For two years products have been shipped out to northern Thailand by using the East-West Economic Corridor at a rate of 1 TEU per week. This involves higher cost than marine transport, but is apt for a just-in-time delivery operation since cargo reaches the destination in two days. Despite relatively adverse road conditions, the company has experienced so far no such problem as load shift during transportation.

Industrial Park (Quang Ngai Province)

- 70% of VSIP deals with export-oriented industries. Export counts on Da Nang Port exclusively.

- Da Nang Port is playing a significantly important role for VSIP. - Phase II construction project is expected in the future.

34

Table 3-14 Results of demand forecast for container cargo

Figure 3-5 Results of demand forecast for container cargo

Table 3-15 Results of demand forecast for general cargo

Figure 3-6 Results of demand forecast for general cargo

（TEU)2016 2017 2018 2019 2020 2021 2022 2023

Case 1 316,373 387,954 475,730 583,366 715,355 856,365 1,022,076 1,216,158Case 2 291,714 329,833 372,933 421,665 476,765 531,044 590,392 655,141Case 3 286,820 318,859 354,477 394,073 438,093 480,728 526,655 576,029

（TEU)2024 2025 2026 2027 2028 2029 2030

Case 1 1,442,697 1,706,220 2,011,708 2,364,621 2,770,896 3,236,957 3,769,707Case 2 725,623 802,173 885,123 974,803 1,071,534 1,175,627 1,287,377Case 3 629,005 685,729 746,345 810,987 879,781 952,839 1,030,264

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

TEU

(000

)

ActualDemand Forecast (METI Study-Case 1)Demand Forecast (METI Study-Case 2)Demand Forecast (METI Study-Case 3)Demand Forecast (Pre-F/S Study)

（トン)2016 2017 2018 2019 2020 2021 2022 2023

Case 1 3,040,180 3,145,272 3,253,997 3,366,480 3,482,851 3,603,245 3,727,800 3,856,662Case 2 3,011,146 3,085,483 3,161,655 3,239,707 3,319,686 3,401,640 3,485,617 3,571,667Case 3 3,000,615 3,063,939 3,128,599 3,194,624 3,262,042 3,330,882 3,401,176 3,472,953

（トン)2024 2025 2026 2027 2028 2029 2030

Case 1 3,989,977 4,127,901 4,270,593 4,418,217 4,570,944 4,728,951 4,892,420Case 2 3,659,842 3,750,193 3,842,775 3,937,643 4,034,852 4,134,461 4,236,530Case 3 3,546,245 3,621,083 3,697,501 3,775,532 3,855,209 3,936,568 4,019,643

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

TEU

(000

)

ActualDemand Forecast (METI Study-Case 1)Demand Forecast (METI Study-Case 2)Demand Forecast (METI Study-Case 3)Demand Forecast (Pre-F/S Study)

35

Demand forecast for passenger ships (2)

Method of demand forecast for passenger ships 1)

According to the Preparatory Study for Da Nang Port Improvement Project Phase II (completed in December

2014 by JICA), passenger ships calling at Da Nang Port are mainly assigned from Northern Asia, so that the

number of passenger ships is estimated by elasticity method using the total GDP of China, S. Korea and

Taiwan.

In addition, the number of passengers per ship is calculated based on the number of ships and the actual number

of passengers, which is multiplied by the future number of ships obtained by the aforementioned process.

Prerequisites 2)

Calculation of elasticity a)

Elasticities are calculated on the basis of the Compound Average Growth Rate (CAGR) of the actual GDPs of

the whole of China, S. Korea and Taiwan, and the CAGR of the actual number of passenger ships that called at

the port. The calculation results are shown in Table 3-16～Table 3-17. The elasticity of the number of

passenger ships is set as follows:

✓ Elasticity of the number of passenger ships: 1.8%/ 2.9%＝0.62

Table 3-16 CAGR of GDPs of China, S. Korea and Taiwan

Table 3-17 CAGR of the number of passenger ships calling at the port

Setting of CAGR of future GDPs b)

CAGR of future GDPs has been set at 3.1%, assuming that GDP growth rates of China, S. Korea and Taiwan

will further continue into the future at the rates estimated by IMF for the respective countries.

(Billion)

2011 2012 2013 2014 2015China 44,973 48,525 52,310 56,129 60,002 7.5%

S.Korea 1,311,893 1,341,966 1,380,833 1,426,973 1,464,244 2.8%Taiwan 14,312 14,608 14,929 15,515 15,616 2.2%Total 1,373,189 1,407,111 1,450,085 1,500,631 1,541,877 2.9%

Source: International Monetary Fund, World Economic Outlook Database, October 2016 （Gross domestic product, constant prices（National currency））

CountryYear Average Growth

Rate (%)

(Number of Ships)

2011 2012 2013 2014 2015Da Nang 53 57 104 85 57 1.8%


Name of Port 年 Average GrowthRate (%)

36

Table 3-18 CAGR obtained from the future GDPs estimated by IMF

Setting of CAGR of future number of passenger ships c)

On the basis of above a) and b), CAGR of future number of passenger ships is established as follows:

Table 3-19 CAGR of future number of passenger ships

Elasticity

(1)

CAGR of future

GDPs (2)

CAGR of future number of

passenger ships (3)=(1)*(2)

Passenger ship 0.62 3.1% 1.9%

Number of passengers per ship d)

The calculation results of the number of passengers per ship on the basis of the actual number of ships and that of

passengers are as follows:

Table 3-20 Number of passengers per ship

Results of demand forecast 3)

By employing the demand forecast method shown in 1) and the prerequisites provided in 2), future number of

passenger ships calling at Da Nang Port and the number of passengers have been estimated as follows:

Table 3-21 Estimation results of the number of passenger ships and passengers

(Billion)

2016 2017 2018 2019 2020 2021China 63,955 67,901 71,996 76,316 80,818 85,506 6.0%

S.Korea 1,504,074 1,549,769 1,597,180 1,645,219 1,694,555 1,745,094 3.0%Taiwan 15,768 16,030 16,340 16,708 17,133 17,603 2.2%Total 1,583,797 1,633,701 1,685,516 1,738,242 1,792,506 1,848,202 3.1%

Source: International Monetary Fund, World Economic Outlook Database, October 2016 （Gross domestic product, constant prices（National currency））

CountryYear Average Growth

Rate (%)

Year 2011 2012 2013 2014 2015 Average GrowthRate(%)

Number of Ships 53 57 104 85 57 71Passenger (person) 38,190 56,746 115,912 108,279 51,891 74,204

Number of passengers per ship (person) 721 996 1,115 1,274 910 1,042

Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020Number of Ships 53 57 104 85 57 58 59 60 62 63

Passenger 38,190 56,746 115,912 108,279 51,891 60,568 61,754 62,964 64,197 65,455

Year 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030Number of Ships 64 65 67 68 69 71 72 73 75 76

Passenger 66,737 68,044 69,376 70,735 72,121 73,533 74,974 76,442 77,939 79,466

37

Figure 3-7 Estimation results of the number of passenger ships and passengers

Port planning 4.2

Port planning of Lien Chieu port was elaborated in “The Study on the Port Development Plan in the Central

Region of the Key Area of the Socialist Republic of Viet Nam” that JICA implemented by 1998. Making the

results of this study as a reference and on the basis of the result of local survey, METI Study Team reviewed the

Phase I port layout planning contained in the Pre-Feasibility Study as described below, thereby confirming that the

port planning (layout) is reasonable.

Review of harbor basin calmness (1)

Efficiency of cargo handling at wharves drops remarkably when waves in the harbor basin become larger,

giving negative impact as well on the safety of the work. For this reason, Japanese Technical Standards and

Commentary for Port Facilities stipulate that the target operational efficiency (ratio of the number of annual

days on which wave height in front of a wharf is less than 0.5 m) at public cargo wharves should be secured at

97.5% or above. Since wave calmness inside the harbor basin largely varies depending on the length and

direction of a breakwater, METI Study Team alternatively set the length of a breakwater in Phase I placed at

right angles to the predominant direction of oncoming waves at 300m, 325m and 350m (this last being planned),

thereby reviewing operational efficiencies in the front of a wharf by a computerized simulation as in Figure 3-8.

As a result, setting the length of the breakwater at 350m in conformity with the planned length established in

the Pre-Feasibility Study proved to satisfy the target operational efficiency of 97.5% for both container and

general cargo wharves as shown in Figure 3-9.

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

0

20

40

60

80

100

120

140

16020

11

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

(Persons)(Number of Ships)

Number of Ships (Actual) Number of Ships (Forecast)Passenger (Actual) Passenger (Forecast)

38

Figure 3-8 Wave calmness reviewing points in the harbor basin and predominant direction of oncoming waves

Figure 3-9 Simulation results of wharf operational efficiencies

Review of container yard (wharf) direction versus wind direction (2)

4-box stacking of containers is planned for the new container yard. Consequently, when a strong wind blows,

vacant containers placed on the upper part of the stack will lose stability and cause a danger. In addition,

efficiency of stacking up and down of containers with a container yard crane is expected to be reduced. It is

therefore desirable to arrange the container yard in such manner that the longitudinal side of a container is not

at right angles to the predominant wind direction and wind direction of highest wind speed in order to minimize

wind pressure. The following is a comparative analysis between the values of maximum wind speed and wind

direction and the direction of a container yard (wharf).

As shown in Table 3-22 and Figure 3-10, the angle between the predominant wind direction with wind speed

exceeding 20 m/s (NW, NNW, N) and the longitudinal direction of a container turned out to fluctuate in the

range from 0 degree (parallel) to 45 degrees, thereby confirming that the direction of the container yard has no

problem with respect to the wind direction.

Since there are, however, observation data that show a difference tendency, for example, the predominant wind

direction when a strong wind blows along the coastline of Lien Chieu port area was observed as NE in “The

95.4

97.0

97.5

98.4 98.4 98.4

93.0

94.0

95.0

96.0

97.0

98.0

99.0

100.0

300 325 350

Berth

Ava

ilabl

e R

atio

[%]

Breakwater Length (m)

Area ①

Area ②

Target 97.5%

①Container cargo wharf

②General cargo wharf

Predominant direction of oncoming waves：NE

39

Study on the Port Development Plan in the Central Region of the Key Area of the Socialist Republic of Viet

Nam” implemented by JICA until 1998, it is necessary that the predominant wind direction at the planned port

construction site is reconfirmed in the oncoming Feasibility Study.

Table 3-22 Observed values of maximum wind speed and wind direction in Da Nang (1986 – 2001)

Month Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec.

Wind direction N N N NNW N W NW SW NNW NNW NW NE

Max wind speed

(m/s)

16 14 14 15 25 12 16 12 24 24 40 16

Source: Pre-Feasibility Study (TEDIPORT December 2016)

Figure 3-10 Relation between container yard arrangement and wind direction

Review on the transformation of coastal shape (3)

Construction of a structure jutting out into the natural sea area has a possibility of hindering the coastal current

that flows along the coastal line, which can transform coastal lines (forward and backward) at the upper part

and lower part of the structure, and eventual occurrence of collapse of on-land facilities due to the coastal

erosion or blocking of an estuary due to sedimentation. The magnitude of impacts on the coastal landform will

largely vary depending on the size, direction and construction of the structure.

A study of the coastal transformation for the Lien Chieu new port was carried out by a One-line Theory-based

computer simulation in “The Study on the Port Development Plan in the Central Region of the Key Area of the

Socialist Republic of Viet Nam” which was implemented by JICA and completed in 1998. As shown in red in

Figure 3-11, both the forward and backward deformations of the coast line in case of constructing a

blue-colored structure (“+” and “－” in Y axis of the graph means forward and backward deformation,

respectively) have resulted to come in the range of a maximum 50m or so, and to ensure that the location will

Longitudinal direction of container

(NNW)

N

NNW NW

Predominant wind direction of over 20 m/s

40

not affect the existing artificial structures. In view of the facts that current coastal lines and utilization have not

largely changed from those in the time of the above study, and that the form and direction of the planned port

facilities remain almost the same, these results of the study are expected to apply to this Project.

Figure 3-11 One-line Theory-based simulation of coastal transformations

Source: “The Study on the Port Development Plan in the Central Region of the Key Area of the Socialist Republic of Viet Nam”, JICA, 1998

Terminal planning for Lien Chieu port area 4.3

In this paragraph, study was made of the arrangement layout of an efficient and safe terminal and the planning

of machinery and equipment including energy-saving aspects. As a result of the study of the arrangement of a

terminal, container cargo handling capacities were confirmed to be approximately 500,000 TEU/year in case of

constructing one container wharf berth, and approximately 900,000 TEU/year in case of constructing 2

container wharf berths, with the particulars described as follows:

Verification of terminal layout (1)

Wharf length and water depth 1)

Design ships a)

On the basis of the Preparatory Study for Da Nang Port Improvement Project Phase II (by JICA completed in

December 2014) and the report of the Pre-Feasibility Study, the kind of ships to use Lien Chieu port area was

set as a 4,000 TEU capacity ship for container cargos, and a 50,000 DWT-class ship for general cargos, with

respective specifications set on the basis of Japanese Technical Standards and Commentaries for Port and

Harbour Facilities (July 2007, The Ports and Harbours Association of Japan) as shown in Table 3-24 and Table

3-25.

Furthermore, Japanese technical standards do not specify major specifications for a 50,000 DWT-class general

cargo ship. Comparison, however, between the ship size of 50,000 DWT general cargo ship specified in the

Technical Standards of 1989 Version (National Institute for Land and Infrastructure Management’s Study

41

Report No. 28) and the ship size of 55,000 DWT general cargo ship referred to in the Technical Standards and

Commentaries for Port and Harbour Facilities (July 2007, The Ports and Harbours Association of Japan),

turned out that there is no difference in Length Over All (LOA) and breadth between these two, so that

determination was made to use the specification of the 55,000 DWT ship.

Table 3-23 Major specification of design ship

DWT LOA Breadth Full load draft

Container ship 50,000

(4,000TEU) 274m 32.3m 12.7m

General cargo ship 50,000 217m 32.3m 12.8m

Table 3-24 Major specification of container ship

Source: Technical Standards and Commentary for Port Facilities (July 2007, the Ports and Harbours Association of Japan)

Table 3-25 Major specification of general cargo ship

Source: Technical Standards and Commentaries for Port and Harbour Facilities (July 2007, The Ports and Harbours Association of

Japan)

42

Setting of wharf length and water depth b)

The wharf length required for mooring the above design ship is set at 330m for container wharf and 280m for

general cargo wharf in accordance with the Technical Standards and Commentary for Port facilities (July 2007,

The Ports and Harbours Association of Japan). Required water depth for both wharves are equally set at 14.5m

(technical standard of 14m plus an allowance of additional 0.4m for burial which is specified in the Vietnamese

Standards).

Table 3-26 Required length of and water depth at container wharf

Source: Technical Standards and Commentaries for Port and Harbour Facilities (July 2007, The Ports and Harbours Association of

Japan)

Table 3-27 Required length of and water depth at general cargo wharf

Source: Technical Standards and Commentary for Port Facilities (July 2007, the Ports and Harbours Association of Japan)

Verification of terminal layout 2)

On the basis of the wharf length set in paragraph 1) above, review was made of the terminal layout prepared in

the Pre-Feasibility Study. Problems identified with the reviewed terminal layout, their proposed solutions and

an alternative layout plan are shown in Figure 3-12.

Furthermore, according to the phased construction plan of the container terminal in the case where Da Nang

City People’s Committee will assume the project owner as shown in Figure 6-3, a berth will be necessary for

the container wharf in 2022, and a second berth in 2025, which means that the period up to the time of

43

necessitating a second berth is extremely short. The outline result of Chapter 5 2. The preliminary financial and

economic analysis in turn confirmed that the highest FIRR will be expected from the case scenario of Da Nang

City People’s Committee assuming project owner (Case3: planning construction of 2 container wharves and 1

bulk cargo wharf in Phase I, and prompt shifting of cargoes from Tien Sa to Lien Chieu).

Being aware that the Pre-Feasibility Study planned to construct 1 berth each for the container wharf and the

general cargo wharf in Phase I of Lien Chieu Port Development Project, METI Study Team proposes to

construct two container wharf berths and one general cargo wharf berth in Phase I as analyzed in the case where

Da Nang City People’s Committee will assume the project owner. The proposed terminal layout is shown in

Figure 3-13.

44

Figure 3-12 Terminal plan

Pre-F/S Study METI Study

■Points at Issue of Terminal Layout in Pre-F/S Study and Proposal by METI Study

Points at Issue of Pre-F/S Study Proposal by METI Study 1 ・To confirm Berth Length and location of Berth is required. ・To install Margin length (50m each) at the corner of berth line.

・Length of Berth decided based on technical standard of Japan (OCDI). 2 ・Relocation of container gate is required in consideration of possible traffic jam occurrence.

・Container Gate lane appears to be in lack. ・To relocate Container Gate to the center of container terminal. ・To install 8 Gate lanes (In Gate: 4 lanes, Out Gate: 4 lanes).

3 ・Safety access from/to CFS is required. ・Relocation of CFS is required in consideration of accessibility and expandability.

・To relocate CFS near the Container Gate and Marine House.

4 ・RTG Maintenance Area is required. ・To locate RTG Maintenance Area in the container terminal. 5 ・Fuel Supply Station is required in the container terminal.

Otherwise, fuel needs to be carried from general terminal to RTG by tank truck. ・To be discussed later.

6 ・Relocation of Administration Building is required in consideration of future expansion plan. ・To relocate Administration Building to a position which enables overlooking of the whole port.

7 ・Relocation of Reefer Container Area is required in consideration of accessibility. ・To relocate Reefer Container Area in consideration of efficiency in the terminal. 8 ・Chassis Waiting Lane is required around terminals. ・To install Chassis Waiting Lane at outside the Fence. 9 ・Access load between general terminal and container terminal may be congested and dangerous. ・To install the Fence.

320m

260m

Container Gate

General & Bulk Gate General & Bulk Gate

・Traffic Jam at Issue (Container Cargo)・Congestion at Issue

(Use of Container and General Cargo)

CFS・Accessibility at Issue・Expandability at Issue

Fuel Supply Station

Fuel Supply Station

Administration Building

Reefer Container・Accessibility at Issue

Empty Container

LadenContainer Laden

ContainerGeneral

&Bulk

Cargo

Container GateCFSRTG Maintenance Area

Reefer Container

Chassis Waiting Lane

LadenContainer

Maintenance Shop

Maintenance ShopAdministration Building Marine House

General&

BulkCargo

Installation of Fence

LadenContainer

330m

280m

50m

50m

Empty Container

45

Figure 3-13 Proposed phase 1 Lien Chieu port area development plan formulated by METI Study Team

General & Bulk Gate

Fuel Supply Station

Administration Building

Container GateCFSRTG Maintenance AreaChassis Waiting Lane

LadenContainer

Maintenance Shop Marine House

General&

BulkCargo

Installation of Fence

LadenContainer

330m

280m

50m

50m

LadenContainer

Container Gate

Empty Container

Reefer Container

330m

Empty Container

46

Estimation of container handling capacity (2)

Container cargo handling capacity was estimated on the basis of the number of storage slots shown in Figure

3-12 and Figure 3-13 that contemplate Lien Chieu port area development plan.

As a result, the capacities were estimated to be approximately 500,000 TEU/year in case of constructing one

berth for the container wharf, and approximately 900,000 TEU/year in case of constructing two berths as shown

in Table 3-28 and Table 3-29, respectively.

Table 3-28 Handling capacity in case of constructing one berth

Item Full

container (RTG)

Vacant container

Reefer container

No. of storage slots a 1,800 343 216 No. of stacked boxes at

storage b 4 4 4

Storage capacity c = a x b 7,200 1,372 864 Operating days per year d 347 347 347 Peak ratio e 1.25 1.25 1.25 Average storage days f 5 8 5 Annual container handling capacity g = c x d / (e x f) 399,800 47,600 48,000

Total (TEU/year) 495,400

Table 3-29 Handling capacity in case of constructing two berths

Item Full

container (RTG)

Vacant container

Reefer container

No. of storage slots a 3,240 896 396 No. of stacked boxes at

storage b 4 4 4

Storage capacity c = a x b 12,960 3,584 1,584 Operating days per year d 347 347 347 Peak ratio e 1.25 1.25 1.25 Average storage days f 5 8 5 Annual container handling capacity g = c x d / (e x f) 719,500 124,400 88,000

Total (TEU/year) 931,900

Furthermore, verification is made whether the above capacities are reasonable by calculating annual container

capacity on the basis of gantry crane cargo handling capacity. The container handling volume of one gantry

crane is 182,000 TEU/year/unit as derived from the following equation:

Gantry crane cargo handling capacity = a*b*c*d*e

Where, a. Annual operation days: 347 days/year b. Cargo handling hours: 20 hours/day c. Gantry crane capacity: 35 boxes /hour/unit d. Utilization ratio: 0.5 e. TEU/Box ratio: 1.5

47

Since introduction of three gantry cranes is planned per container berth in the Lien Chieu port area development

plan, it means that construction of one berth and two berths will have 546,000 TEU/year and 1,092,000

TEU/year of handling capacity, respectively.

As witnessed by the above, the capacities estimated on the basis of the capacity of gantry crane exceed those

calculated by means of the number of storage slots, handling of 500000 TEU and 900,000 TEU is deemed to be

feasible for one berth and two berths, respectively.

Introduction of highly energy-saving materials and equipment (3)

The particulars of the energy-saving equipment to be possibly introduced to the terminals being planned for

Lien Chieu port area are summarized as follows:

RTG 1)

An RTG is driven by electric power generated by diesel oil firing engine. Electrification or hybridization of this

system will contribute to energy saving. Given that electricity tariff rates are low in Da Nang, electrification of

the system will offer both energy and cost saving merits with a high likelihood.

Furthermore, the following reveals energy saving effects obtained by the hybridization of RTG which was

realized in Yokohama Port.

Specification: Hybridized driving system capable of carrying out 5-box stacking

Annual handling volume: 29,000 TEU/unit

Annual reduction in the emission of CO2: 65.84t CO2/unit

Reduction effects per TEU: 0.00227 t CO2/TEU

Generator by solar energy 2)

Solar power generation is feasible by utilizing the roofs of CFS and storage buildings inside the container

terminal. The energy thereby generated can be used in, for example, the administration building in the terminal,

which is expected to offer in the long run an effect of reducing CO2 emission.

LED-lit equipment (indoor and outdoor) 3)

Consumption of electric power can be reduced by changing lighting system of outdoor yard and inside buildings

to LED-lit equipment. In general, use of LED lights is said to reduce energy consumption to one half or one

quarter compared with conventional lights.

Electric power-driven forklift 4)

Forklifts to be used in the CFS with a maximum capacity of 3.5 tons or so can count on electric power-driven

ones. Taking advantages of low electricity tariffs, both energy and cost savings can be expected, as well as an

effect to improve labor conditions thanks to no emission of exhaust gas.

48

Tugboat 5)

Energy saving will be possible by hybridizing the driving system of tugboats to be used inside the harbor.

Concretely speaking, by adopting a system to combine a motor and a high-quality storage battery with the

conventionally used diesel engine, it will become possible to realize an efficient and eco-friendly operation and

towing.

A tugboat is operated in general at a low loading level of below 20% during 75% of its working hours. A

hybridized tugboat covers the major portion of the low load level operation of below 20% by driving the

hybridized system motor being combined with the diesel engine, which can contribute to environmental

preservation. Charging its battery by utilizing power supply from the onshore facilities on top of the generator

equipped on the boat is expected to facilitate an approximately 20% of reduction in the volume of CO2

discharged inside the harbor.

Access road planning 4.4

Review of the access road plan in the Pre-Feasibility Study (Pre-F/S) (1)

Access road plan in Pre-F/S 1)

Construction of a new access road to the Lien Chieu Port is proposed in the Pre-F/S (hereinafter referred to as

“the access road”) and the Pre-F/S proposed to start the access road operation in conjunction with startup of the

Lien Chieu Port operation. Connecting road, number of lane, and opening year of the access road are planned as

NH1A, two lanes, and year 2020, respectively as shown in Figure 3-14. However, the basis of lane number and

opening year planning is not shown in the Pre-F/S.

Figure 3-14 The Access Road Plan in the Pre-F/S

Source：Pre-F/S Lien Chieu Port Construction Project in Form of PPP

NH1A

49

Number of lane of the access road after year 2020 is planned as shown in Table 3-30. Two lanes (capacity

17,500 pcu/day) are given for first five years, four lanes (capacity 45,000 pcu/day) are given for 10 years later,

namely year 2030, and six lanes (capacity 60,000 pcu/day) are given for 30 years later, namely year 2050.

However, the details of future traffic demand which shall be the basis of lane number planning is not shown in

the Pre-F/S.

Table 3-30 The Access Road Plan in the Pre-F/S

Year 2020 - 2025 2030 2050

Number of Lanes (Width) 2 (12m) 4 (20m) 6 (30m)

Length 3.0km Source：Pre-F/S Lien Chieu Port Construction Project in Form of PPP

Review results 2)

METI Study Team reviewed and validated the access road planning with a focus on traffic demand supply gap

and route selection.

Validity of opening year a)

As regards the access roads that connect Lien Chieu port area and major cargo occurring and concentrating area

of the port cargo, traffic demand and supply gap analysis was carried out between the future traffic demand

including demand for port cargo traffic demand and traffic capacity of the access roads by contemplating the

case in which Da Nang City People’s Committee becomes the Project Owner (case where cargo volume

concentrates into Lien Chieu port area) as shown in Figure 6-3

As a result of the traffic demand supply gap analysis, the traffic demand proved to be under the supply until

year 2029. METI Study Team therefore recommends development plan of the access road aiming to open in

year 2030 and utilization of the existing roads until year 2029. It is important to ensure appropriate access road

network to the Lien Chieu Port that the existing road improvement plan shall be implemented as schedule by

concerned agencies.

Validity of route selection b)

METI Study Team carried out validation of route selection of the access road with implementation of site

investigation. In the site investigation, several control points along the route of the access road such as steep

slope, high-tension transmission line, tombs, houses, etc. were found nearby NH1A. In addition, the adjacent

section of the intersecting point with the access road on NH1A was verified to consist of small horizontal

curves and steep longitudinal slopes. As a result of the validation based on the site investigation, it was

confirmed difficult to apply appropriate geometric standard values to alignment plan of the access road and

security of traffic safety on NH1A.

Recommendations 3)

Following the review of the access road planning in the Pre-F/S, METI Study Team recommends development

of the access road aiming to open in year 2030 and utilization of the existing roads (including their upgrade)

50

until year 2029. Furthermore, route selection of the access road should be studied further to make the access

road plan more feasible since the alignment plan of the access road proposed in the Pre-F/S is not feasible in

terms of geometric design and traffic safety.

Process of the review (2)

In the review of the access road plan in the Pre-F/S, METI Study Team pointed out the inappropriateness of

“opening year” and “route selection”. The review was processed in the following manner:

Validity of opening year 1)

Confirmation of the validity of opening year was processed by taking the following steps:

a. Estimation of port cargo traffic demand of the Lien Chieu Port

b. Estimation of port cargo traffic occurrence and concentration distribution of the Lien Chieu Port

c. Identification of major access roads of the Lien Chieu Port

d. Traffic demand supply gap analysis on the major access roads

Estimation of port cargo traffic demand of the Lien Chieu Port a)

It is anticipated that port cargo demand of Da Nang Port will exceed the capacity of Tien Sa Port and Tho

Quang Port in the near future. The Lien Chieu port is expected to be the third port of Da Nang Port to share

sharply increasing port cargo demand with Tien Sa Port and Tho Quang Port.

In this section, port cargo traffic demand of the Lien Chieu Port in terms of occurrence and concentration was

estimated on the basis of the port cargo demand estimation in Chapter 3 4.1 Demand forecast.

51

Figure 3-15 Da Nang Port (Tien Sa Port・Tho Quang Port, and Lien Chieu Port Planning Site)

Source：Land use plan map provided by Da Nang People's Committee with additions by METI Study Team.

Estimation of the port cargo traffic demand was conditioned on the following:

- Number of port operation days per year: 347 days

-Traffic conversion factor: General cargo 10.0 ton/vehicle

- Ratio of container（20 feet：40 feet ＝ 1:1）

- Empty container ratio: 25%

- Empty vehicle ratio: 50%

- Number of vehicles other than freight cars: 50% of bulk trucks and container trailers

- PCU conversion factor: Truck 2.5, container trailer 3.0

Estimation of port cargo traffic demand centering on Lien Chieu Port has resulted as in Table 3-31.

Da Nang Port (Lien Chieu Port)

Hoa Khanh IZ

Hoa Cam IZ

Lien Chieu EZ

Da Nang High – Tech Park

Da Nang Seafood Services

Hoa Khanh Expansion IZ

Da Nang Port (Tien Sa Port / Tho Quang Port)

52

Table 3-31 Port Cargo Traffic Demand of Lien Chieu Port based on Port Cargo Demand

Port Cargo & Port Cargo Traffic Demand Unit Year

2025 2030

Cargo Demand Bulk 000 ton 1,548 3,534

Container TEU 521,129 1,256,333

Cargo Traffic Demand Bulk Truck pcu/day 2,231 5,092

Container Trailer pcu/day 7,509 18,103

Passenger Car pcu/day 5,093 12,107

Total pcu/day 14,832 35,302 Source：METI Study Team

Estimation of port cargo distribution of the Lien Chieu Port b)

Areal distribution of port cargo of Da Nang Port (Tien Sa Port / Tho Quang Port) on the basis of the statistics of

import share and export share by provinces in year 2014 was analyzed to identify main access roads of major

port cargo generation and attraction area. Areal share of port cargo was also estimated.

Import share and export share of port cargo of Da Nang Port (Tien Sa Port / Tho Quang Port) by provinces in

year 2014 are shown in Figure 3-16 and Figure 3-17.

Figure 3-16 Export Share of Port Cargo of Da Nang Port in the First Quarter of 2014

Source：The Study for Tien Sa - Da Nang Port Improvement Project (Phase II), Dec 2014, JICA

53

Figure 3-17 Import Share of Port Cargo of Da Nang Port in the First Quarter of 2014

Source：The Study for Tien Sa - Da Nang Port Improvement Project (Phase II), Dec 2014, JICA

Areal share of import and export of port cargo is shown in Table 3-32. Share of Quang Tri and Thua Thien Hue

belonging to North area is 13%. Share of Da Nang city is 45%. Quang Nam, Quang Ngai, and Binh Dinh

belonging to South Area is 42%.

Table 3-32 Areal Share of Import and Export Port Cargo of Da Nang Port

Area Province Export Share (%) Import Share (%) Areal

Export

Import

Share (%)

(without

Not Found)

Provincial Areal Share

without

Not

Found

Provincial Areal Share

without

Not

Found

North

Area

Quang Tri 1.0 9.5 15.7 0.2 8.2 11.2 13

Thua Thien

Hue

8.5 8.0

Da Nang

City

Da Nang 30.1 30.1 50.0 28.7 28.7 39.1 45

South

Area

Quang Nam 11.5 20.6 34.3 35.0 36.4 49.7 42

Quang Ngai 7.9 1.4

Binh Dinh 1.2 0.0

Not Found Not Found 39.8 26.7 Source：Prepared by METI Study Team on the basis of the export-import container utilization shares of Da Nang

Port for respective provinces during the first quarter of 2014

Identification and selection of major access roads of the Lien Chieu Port c)

As mentioned in the preceding section concerning the provinces having generation and attraction of port cargo,

these provinces are distributed within approximately 200km from Da Nang City. In consideration of the

positions of respective provinces and road networks identified, two major access roads were selected for

respective destination areas as shown in Table 3-33. As the access roads in Da Nang City selection was made

54

of the roads that connect the Lien Chieu Port and two major industrial parks which are Hoa Khanh industrial

park and Hoa Cam industrial park.

Table 3-33 Lien Chieu Port Major Access Road of Each Area

Area ID Road Name North Area N-1 Nguyen Van Cu－Ta Quang Buu－NH1A

N-2 Nguyen Van Cu－Ta Quang Buu－NH1A－La Son – Tuy Loan Expressway Da Nang City D-1 Nguyen Van Cu－Nguyen Luong Bang

D-2 Nguyen Van Cu－Ta Quang Buu－NH1A－La Son – Tuy Loan Expressway－NH14B

South Area S-1 Nguyen Van Cu－Ta Quang Buu－NH1A－La Son – Tuy Loan Expressway－Da Nang-Quang Ngay Expressway

S-2 Nguyen Van Cu－Ta Quang Buu－NH1A－La Son – Tuy Loan Expressway－NH14B－NH1A

Source：METI Study Team

Figure 3-18 Lien Chieu Port Major Access Road of Each Area

Source： Land use plan map provided by Da Nang People’s Committee with additions by METI Study Team.

North Area：Quang Tri・

Thua Thien Hue

South Area：Quang Nam・Quang

Ngai・Binh Dinh

Hoa Khanh IZ

Hoa Cam IZ

Lien Chieu EZ

Da Nang High – Tech Park

Da Nang Seafood Services Hoa Khanh

Expansion IZ

Danang Port (Tien Sa Port/ Tho Quang Port)

North-South Expressway （La Son-Tuy Loan）

North-South Expressway （Danang-Quang Ngai）

NH14B

NH1A

NH1A

N-1

N-2

D-1

D-2

S-1

S-2

Danang Port (Lien Chieu Port)

55

A part of the major access roads selected for the Lien Chieu Port includes the following ongoing and planned

road projects.

a. North – South Expressway Project (Da Nang – Quang Ngai）

- Total Length: 139 km

- Stage 1: 4 lanes

- Stage 2: 6 lanes

- Commencement of construction (Stage 1): 2013

- Construction Period (Stage 1): ～2017

- Project Owner： Vietnam Expressway Corporation

b. North – South Expressway Project（La Son – Tuy Loan）

- Total Length: 80km

Km0 (at intersection with DT14B, La Son town, Phu Loc district, Thua Thien Hue Province) to

Km79+800 (Tuy Loan interchange)

- Stage 1: 2 lanes

- Stage 2: 4 lanes

- Commencement of construction (Stage 1): 2013

- Construction Period (Stage 1): ～2017

c. NH1A（Hai Van Tunnel South Section）


- Number of Lanes: 4 lanes（widening from 2 lanes）

- Commencement of construction: 2017

- Construction Period : ～2022

- Project Owner：DEOCA

d. Nguyen Luong Bang


- Number of Lanes: 6 lanes（widening from 2/4lanes）

- Construction Schedule: target section in 2030 Master Plan

- Project Owner：Da Nang People's Committee.

Traffic demand supply gap analysis on the major access roads d)

The major access roads shown in Figure 3-19 around Lien Chieu Port which are considered to have a large impact

of port cargo traffic of the Lien Chieu Port among the major access roads selected in the preceding section were

subjected to traffic demand supply gap analysis.

56

Figure 3-19 The Major Access Roads around Lien Chieu Port

Source：Land use plan map provided by Da Nang People's Committee with additions by METI Study Team.

Table 3-34 and Table 3-35 show future traffic conditions which are the conditions for the traffic demand supply

gap analysis and analysis of the results of traffic demand supply gap. Congestion ratio of the main access roads

as of year 2025 and year 2030 were calculated. Future traffic demand including the port cargo traffic share by

direction as indicated in Table 3-32 and future traffic capacity in consideration of expansion by existing road

development plan were applied to the calculation. As a result, the congestion ratio of each major access road for

traffic demand including port cargo traffic as of year 2025 became below 1.0, however, as of year 2030

congestion ratio of Nguyen Van Cu, Ta Quang Buu, and NH1A were 1.0 or more. Looking at this by year as

shown in Table 3-36, the congestion ratio of each road exceeds 1.0 from year 2030. Therefore, development of

new access road by year 2029 to resolve congestion on Nguyen Van Cu which has already been widened to 6

lanes and it seems difficult to expand further as of year 2025 and adjoining Ta Quang Buu is necessary. As for

NH1A, it is necessary to expand traffic capacity by widening by 2029.

La Son – Tuy Loan Expressway

Nguyen Van Cu

Ta Quang Buu

NH1A

Nguyen Luong Bang

57

Table 3-34 Traffic Conditions and Demand Supply Gap in Year 2025

Road Name ID

Traffic Conditions and Demand Supply Gap in Year 2025

Number of Lanes

Capacity (pcu/day)

Conventional Traffic Volume

(pcu/day)

Port Cargo Traffic Volume

(pcu/day)

Congestion Ratio

(C) (V1) (V2) (V1+V2)/C

Nguyen Van Cu

N1

2/6→6*1) 60,000 19,100 *3)

964 0.56 N2 964

D1 3,337

D2 3,337

S1 3,115

S2 3,115

Total 14,832

Nguyen Luong Bang

D1 6 60,000 33,500 *3)

3,337 0.61 Total 3,337

Ta Quang Buu

N1

4 45,000 13,200 *3)

964 0.54 N2 964

D2 3,337 S1 3,115 S2 3,115

Total 11,495

NH1A

N2

2→4 *2) 45,000 18,702 *2)

964 0.64 D2 3,337

S1 3,115 S2 3,115

Total 10,531

La Son – Tuy Loan

N2 4 45,000 14,307 *2)

964 0.40 S1 3,115

Total 4,079

*1) Da Nang M/P *2) Haivan Pass Tunnel 2nd Phase F/S *3) DaCRISS JICA Source: METI Study Team

58


Road Name ID


Number of Lanes

Capacity (pcu/day)


(pcu/day)


(pcu/day)

Congestion Ratio

(C) (V1) (V2) (V1+V2)/C

Nguyen Van Cu

N1

2/6→6*1) 60,000 25,802 *3)

2,295

1.02

N2 2,295

D1 7,943

D2 7,943

S1 7,413

S2 7,413

Total 35,302

Nguyen Luong Bang

D1 6 60,000 45,255 *3)

7,943 0.89

Total 7,943

Ta Quang Buu

N1

4 45,000 17,832 *3)

2,295

1.00

N2 2,295 D2 7,943 S1 7,413 S2 7,413

Total 27,359

NH1A

N2

2→4 *2) 45,000 22,732 *2)

2,295

1.06 D2 7,943 S1 7,413 S2 7,413

Total 25,064

La Son – Tuy Loan

N2 4 45,000 18,796 *2)

2,295 0.63 S1 7,413

Total 9,708

*1) Da Nang M/P *2) Haivan Pass Tunnel 2nd Phase F/S *3) DaCRISS JICA Source: METI Study Team

Table 3-36 Annual Traffic Congestion Ratio by Major Access Road

Road Name Year

2025 2026 2027 2028 2029 2030

Nguyen Van Cu 0.56 0.65 0.74 0.83 0.92 1.02

Nguyen Luong Bang 0.61 0.67 0.73 0.79 0.85 0.89

Ta Quang Buu 0.54 0.63 0.72 0.81 0.9 1.00

NH1A 0.64 0.72 0.8 0.88 0.96 1.06

La Son – Tuy Loan 0.4 0.45 0.5 0.55 0.6 0.63 Source: METI Study Team

59

Table 3-37 shows the results of the traffic demand supply gap analysis as of 2030 in case of the new access

road development shown in Figure 3-20 for reducing traffic congestion of Nguyen Van Cu and Ta Quang Buu

and widening from 4 lanes of NH 1A to 6 lanes. The congestion ratio of each access road became 1.0 or less.

Figure 3-20 Possible Position of New Access Road

Source：Added by METI Study Team on land use plan map by Da Nang People's Committee.

La Son – Tuy Loan Expressway Ta Quang Buu

Nguyen Van Cu

New Access Road

NH1A

Nguyen Luong Bang

60


(with new access road & NH1A widening）

Road Name ID


Number of Lanes

Capacity (pcu/day)


(pcu/day)


(pcu/day)

Congestion Ratio

(C) (V1) (V2) (V1+V2)/C

Nguyen Van Cu

N1

2/6→6*1) 60,000 25,802 *3)

765

0.71

N2 765 D1 7,943 D2 2,648 S1 2,471 S2 2,471

Total 17,062

Nguyen Luong Bang

D1 6 60,000 45,255 *3)

7,943 0.89

Total 7,943

Ta Quang Buu

N1

4 45,000 17,832 *3)

765

0.60

N2 765 D2 2,648 S1 2,471 S2 2,471

Total 9,120

NH1A

N2

2→4 *2)

→6 60,000 22,732 *2)

2,295

0.80 D2 7,943 S1 7,413 S2 7,413

Total 25,064

La Son – Tuy Loan

N2 4 45,000 18,796 *2)

2,295 0.63 S1 7,413

Total 9,708

New Port Access Road

N1

4 45,000 0

1,530

0.41

N2 1,530 D2 5,295 S1 4,942 S2 4,942

Total 18,239 *1) Da Nang M/P *2) Haivan Pass Tunnel 2nd Phase F/S *3) DaCRISS JICA Note: The above prepared on the assumption that 2/3 of Nguyen Van Cu and Ta Quang Buu's port cargo traffic volume will be shifted to the new port access road after its development. Source: METI Study Team

Validity of Route Selection 2)

Confirmation of the validity of route selection was processed by taking the following steps:

① Validation of route selection plan of the access road

② Validation of connecting plan to NH1A of the access road and traffic safety on NH1A

61

Validation of the route selection plan of the access road a)

In order to confirm the validity of the route selection plan of the access road, METI Study Team carried out

confirmation of control points along the planned route of the access road by site investigation, establishment of

design standard value, and confirmation of applicability of the design standard value.

Topography and features along the planned route of the access road were confirmed by field survey as shown in

Figure 3-21. The main control points are crossing with existing railway and Nguyen Van Cu roads, which will

be planned by grade separation and at-grade intersections, respectively. A flat plain continues from the

intersection to the ending point. However, planned route of the access road go through the high-tension

transmission line, the graveyard, steep slopes in the vicinity of the ending point to reach NH1A. The horizontal

distance between NH1A and the high-tension line is about 110 m.

Figure 3-21 Site Conditions along the Planned Route of the Access Road

Source：Pre-F/S Lien Chieu Port Construction Project in Form of PPP / METI Study Team

In the establishment of the design standard value of the access road, setting of values was made on the basis of

the reference value of TCVN 4054-2005 which is the urban road standard of Vietnam. Since most of terrain

along the access road is flat and jurisdiction of the access road is considered to be provincial, the road

classification was set as Class III, design speed as 80 km / h, and maximum longitudinal gradient as 5%.

Graveyard High-TensionLine

Nguyen Van Cu

NH1A

62

Table 3-38 Road Design Categories by Road Function and Design Traffic Volume（TCVN4054-2005）

Source：TCVN4054-2005

Table 3-39 Road Design Category and Design Speed（TCVN4054-2005）


Table 3-40 Road Design Category and Maximum Longitudinal Grade（TCVN4054-2005）


63

On the basis of the design standard value set above, the applicability of the design standard value was

confirmed. Since the topography is flat from the starting point to the vicinity of the ending point, it is possible

to design the intersection with the railway and Nguyen Van Cu within the design standard value. However, in

the section near the ending point shown in Figure 3-22, the height difference between the road surface of NH1A

on the slope and the ground height at the high-tension line below the slope is about 35 m. It is impossible to

design it to be less than the longitudinal grade of 5% which is the maximum value in the standard because the

horizontal distance between NH1A and the high-tension line is only about 110 m.

Figure 3-22 Site Conditions near the Ending Point and NH1A of the Access Road


Validation of connecting plan to NH1A of the access road and traffic safety on NH1A b)

The vicinity of the connection point with the access road of NH1A is a curvy section with the radius of 300 m

and the longitudinal grade is as steep as 4%. It is desirable for traffic safety that the longitudinal grade of the

main road side (NH1A) at the intersection is less than 2.5%, and it is a matter of concern that inflow of port

cargo traffic of heavy vehicles into the steep longitudinal grade section in NH1A will result in disturbance of

smooth traffic flow and reduction in the traffic safety. On the other hand, if interchange type crossing with ramp

ways, horizontal curve with a radius of 1,100 m or more and longitudinal grade of 3% or less are standard

values of main road side. Therefore, METI Study Team confirmed from the view point of traffic safety at the

connection point that it is difficult to connect the access road with NH1A as proposed in the Pre-F/S in

compliance with the geometric standard.

High-Tension Line (110kv)

NH1A

NH1A

Difference of Elevation: about 35m

64

Figure 3-23 Site Conditions of NH1A near the Ending Point of the Access Road


Figure 3-24 shows an alternative route for the access road plan proposed in the Pre-F/S. The alternative is based

on the concept of avoiding connection to the curved section or steep section of NH1A, selecting flat terrain and

connection in the form of an interchange type intersection with ramp ways. Detailed access road planning needs

to be formulated through detailed investigations including topographic survey.

Figure 3-24 Alternative Route for the Access Road proposed in the Pre-F/S


NH1A

Horizontal Curve Radius R=300m

Longitudinal Grade i=4%

Alternative Route (5.2km)

Pre-F/S (3.1km)

65

Port facility design 4.5

Primary dimensions and typical sections of the port facilities planned in the Pre-Feasibility Study as Phase I

shown in Figure 3-3, such as wharf, breakwater, seawall, reclamation, channel and basin, were reviewed. As

regards the breakwater desired to be constructed by using ODA fund, a structural type that uses Japanese

technologies was proposed which are considered to be more suitable from the technical and economic points of

view.

Wharf (1)

The container and general cargo wharves, as shown in Figure 3-3, are planned to be located in parallel and at

right angles to the breakwater, respectively. Primary dimensions and typical sections of the wharves are shown

in Table 3-41 and Figure 3-25.

Structural type of both container and general cargo wharves is open type. The type of wharf under construction

for Tien Sa Phase II is open type with bored reinforced concrete piles due to hard and shallow weathered rock

layer. On the other hand, in Lien Chieu port area, prestressed concrete piles (D800mm) are designed to

construct the wharf in the soft soil layer of 30m in thickness under seabed. Layout of coupled racking piles

under the crane rails seems appropriate.

In general, using steel pipe piles is more advantageous than using concrete piles to widen the pile spans from

economic and quality control viewpoints. For Lien Chieu port, however, prestressed concrete piles at 5m spans

are used in consideration of limited equipment capacity and experience of local contractors.

Table 3-41 Major Dimensions of Wharves

Item General Cargo Wharf Container Wharf Design Vessel

General Cargo Vessel 50,000DWT LOA:225m Breadth:31m Full Draft:12m

Container Vessel 50,000 DWT(4,000TEU) LOA:280m Breadth:32m Full Draft:13m

Structural Type

Open Type Wharf on Coupled Raking Piles Open Type Wharf on Coupled Raking Piles

Berth Length 260m 320m Deck Surface Level

+5.0m CD +5.0m CD

Pile Driving Elevation

-36m CD -36m CD

Operational Elevation

-13.5m CD -14.5m CD

66

Figure 3-25 Typical Section of Container Wharf

Source: Pre-Feasibility Study (TEDIPORT December 2016)

Breakwater (2)

Comparing rubble mound type sloping breakwater covered with wave dissipating concrete blocks and upright

concrete caisson type breakwater, rubble mound type sloping breakwater covered with wave dissipating

concrete blocks is recommended. Under breakwater (from seabed -9.5m CD to -28m CD), soft soil

improvement is proposed by cement mixing method. As a result of review, however, it is revealed that the layer

from -21m CD to -28m CD is sandy material and vertical load of breakwater on the seabed that reaches to this

layer is small, and hence soil improvement for the layer below -21mCD appears to be unnecessary. Therefore, it

is possible to modify soil improvement depth from -28m CD to -21m CD, and structural type comparison was

conducted from technical and economic points of view.

In addition, the soil improvement by cement mixing method was proposed with a low improvement ratio of

9.3%. However, improvement ratio less than 30% is not allowed by the relevant technical guideline in Japan

because stability calculation method of improved soil with low ration has not been established yet. By this

reason, the improvement ratio is modified from 9.3% to 37% in the following structural type comparison.

The results of comparison are shown in Table 3-42 and Figure 3-26. Alternative 4: Rubble Mound Type

Sloping Breakwater covered with Wave Dissipating Concrete Blocks (B) + Gravel Compaction Soil

Improvement Method 50% (-21m CD) is the most recommendable from economic and environmental

viewpoints because of less construction cost by 30% than the proposed design in the Pre-Feasibility Study and

much less volume of excavated soil to be disposed.

Furthermore, by replacing gravel by blast-furnace slag, which will be available in a new steelworks scheduled

to start operation shortly in Vietnam, construction cost of the breakwater will probably be further reduced.

Using the blast-furnace slag for soil improvement which is a Japanese original technology being supported by

numerous working records in port facility construction works in Japan, combined with the wave dissipating

concrete blocks (B) of which patent is owned by a Japanese manufacturer, the breakwater will most probably be

constructed under a Japanese ODA loan with a STEP condition.

67

Table 3-42 Comparison Result of Breakwater Structural Type

Alternative Type Cost Ratio Descriptions Recommendations in Pre-Feasibility Study: Rubble Mound Type Sloping Breakwater covered with Wave Dissipating Concrete Blocks (A) + Cement Mixing Method 9.3% (-28mCD)

1.0

- Cement Mixing Method 9.3% is not acceptable. - Soil Improvement depth can be modified from -28m CD to -21m CD.

Alternative 1: Rubble Mound Type Sloping Breakwater covered with Wave Dissipating Concrete Blocks (A) + Cement Mixing Method 37% (-21mCD)

1.2

- Cost increase due to modification of cement mixing improvement ratio from 9.3% to 37%. - Cost decrease due to modification of soil improvement depth from -28m CD to -21m CD.

Alternative 2: Rubble Mound Type Sloping Breakwater covered with Wave Dissipating Concrete Blocks (B) + Sand Replacement Method (-21mCD) 0.7

- Cost decrease due to modification of wave dissipating concrete block from (A) to more stable (B).

- Cost decrease due to modification of concrete armor block to armor stone.

- Cost decrease due to modification of soil improvement method from cement mixing to sand replacement. - Increase of excavated soil to be disposed.

Alternative 3: Upright Concrete Caisson Type + Sand Replacement Method (-21mCD)

0.9

- Cost increase due to modification of breakwater type from rubble mound type to upright concrete caisson type. - Cost decrease due to modification of soil improvement method from cement mixing to sand replacement. Increase of excavated soil to be disposed.

Alternative 4: Rubble Mound Type Sloping Breakwater covered with Wave Dissipating Concrete Blocks (B) + Gravel Compaction Method (-21mCD) 0.7

- Cost decrease due to modification of wave dissipating concrete block from (A) to more stable (B).

- Cost decrease due to modification of concrete armor block to armor stone.

- Cost decrease due to modification of soil improvement method from cement mixing method (-28m CD) to gravel compaction method (-21m CD).

- Decrease of excavated soil to be disposed.

68

Figure 3-26 Comparison of Breakwater Structural Type

Design Conditions

50 years Wave Height: H1/3=5.8m Hmax=8.0m

Tide Level: HWL=1.5m CD LWL=+0.45m CD

Soil Improvement (Cement Mixing Method 9.3%)

Armour Block

-28m

Wave Disspating Concrete Block (A) 25 t

-21m

-21m

-21m

-21m

Pre-feasibility Study

Alternative 1

Alternative 2

Alternative 3

Alternative 4 Wave Disspating Concrete Block

(A) 25 t

Armour Block

Soil Improvement (Cement Mixing Method 37%)

Armour Block Armour Block

Wave Disspating Concrete Block (B) 20 t

Armour Stone Armour Stone

Soil Improvement (Sand Replacement Method)

Soil Improvement (Sand Replacement Method)

Wave Disspating Concrete Block (B) 20 t

Armour Stone Armour Stone

Soil Improvement (Gravel Compaction 50%)

69

Seawall (3)

Seawall (740m) is constructed between the root of breakwater (350m) and shoreline. Although the structure of

the seawall is similar to that of the breakwater, the area behind is reclaimed for construction of the container

yard. The height of seawall should be designed in such a way that excessive overtopping waves on to the

container yard are avoided in case of stormy weather.

In order to verify the height of seawall parapet designed as the same height (+7.5m CD) as that of the

breakwater, overtopping wave volume behind the seawall was estimated by the graph shown in Figure 3-27.

The estimated volume of 130 ℓ/m/sec turned out to be less than the allowable volume in paved area of 200

ℓ/m/sec shown in Table 3-43, therefore, the height of seawall parapet is high enough to avoid excessive

overtopping waves in a stormy condition.

Table 3-43 Damage Limit Rate of Overtopping

Coverage Rate of Overtopping (ℓ/m/sec)

Apron Paved 200

Apron Unpaved 50

Source: Technical Standards and Commentaries for Port and Harbour Facilities in Japan (July 2007, The Ports and Harbours Association of Japan)

Figure 3-27 Graph for Estimating Rate of Overtopping for a Wave-Absorbing Seawall

Source: Technical Standards and Commentaries for Port and Harbour Facilities in Japan (July 2007,

The Ports and Harbours Association of Japan)

Reclamation (4)

Since average seabed elevation in the area of Phase I is -8.5m CD, and given that the design height of the

container yard is +5.0m CD, approximately 2.7 million m3 of soil is required to reclaim up to the height of

13.5m in the area of 20ha. It is planned in the Pre-feasibility Study that sand will be extracted from the seabed

in the vicinal area.

Assuming that subsoil from the seabed down to -20m CD in the terminal area is soft the same as the area of

breakwater, the thickness of soft layer is approximately 30m which will cause settlement after completion of

reclamation. In the Pre-Feasibility Study, plastic vertical board drain method is proposed for improvement of

70

soft soil under the terminal yard. It is difficult to estimate settlement height because no results of quantitative

calculations and soil tests are provided in the Pre-feasibility Study.

However, from the calculated settlement height of approximately 50cm in Tien Sa Port Area where thickness of

the soft soil layer is thinner than that in Lien Chieu Port area, the settlement height in Lien Chieu area is

assumed to reach 1.0m. Since soil improvement works by the plastic vertical board drain method will probably

take about a year or so and become a critical path of the construction schedule, possible settlement must be

carefully evaluated in the subsequent planning and design stages.

Basin and channel (5)

Dimensions of basin and channel are proposed as shown in Table 3-44 to accommodate a 50,000DWT

(4,000TEU)-class container vessel of which LOA is larger than that of a general cargo vessel, comparing

calculated results in accordance with Vietnamese Standards and PIANC Guidelines.

The calculated results are similar to those calculated by the Technical Standards and Commentaries for Port and

Harbour Facilities in Japan (July 2007, The Ports and Harbours Association of Japan) except for the diameter of

the turning basin, which is planned at 450m, approximately one and a half times the LOA (280m), to reduce

dredging volume, in accordance with the special value provided in the Vietnamese Standards to be applicable to

the inside of a calm water area. It is recommendable, however, to ensure 560m, 2 times of LOA, in accordance

with the above Technical Standards and Commentaries for Port and Harbour Facilities in Japan to secure a safe

vessel maneuvering with tug boat assistance.

It is noted that as dredging elevation of -14m CD in the basin and the channel is calculated taking account of

navigable minimum tide elevation of +1.0m CD as shown in Table 3-44 of which exceedance probability is

50% according to the results of tide analysis in Da Nang Bay, operational hours of the basin and channel for the

container vessel 50,000DWT (4,000TEU) would be also 50% of a year. During the cargo handling time of the

50,000DWT (4,000TEU)-class container vessels, however, no operational confine is expected because the area

in front of the berth where the container vessels stay during cargo handling operation, is dredged down

to-14.5m CD.

Table 3-44 Dimensions of Basin and Channel

Item Unit Dimensions

Channel Operation Direction 1-lane（One-way）

Channel Width m 160

Channel Required Elevation mCD -14.4

Navigable Minimum Tide Elevation mCD +1.0

Sedimentation Allowance m 0.5

Dredging Elevation mCD -14.0

Channel Minimum Radius m 1,300

Turning Basin Diameter m 450

Slope of Dredging - 1:10

Source：Pre-Feasibility Study (TEDIPORT December 2016)

71

5. Effects on the stable supply of energy in Japan as a result of project

implementation

In this section, the reduction in CO2 and NOx emissions due to the implementation of this project is examined. In

addition, the effect of shifting to marine transport from land transport for supplying Vietnam with its energy needs

and in ensuring a stable energy supply in Japan will be evaluated.

Reduction of CO2 and NOx emissions 5.1

By implementing this project, CO2 and NOx emissions can be expected to decrease due to shorter transport times

and distance by avoiding the use of alternative ports, the use of larger vessel and the elimination of demurrage.

Less reliance on land transport will also result in significant reductions in CO2 and NOx emissions.

Therefore, in this survey METI Study Team will measure the effect of reducing CO2 and NOx emissions due to

shorter road transport distances, which is brought about by avoiding the use of alternative ports.

Calculation method to measure the reduction in CO2 and NOx emissions (1)

In the "Without case" in which the project is not carried out, it is assumed that the container cargo will be handled

at Quy Nhon port which is ranked as Class 1 regional gateway port. On the other hand, general cargo in the

“Without case” is assumed to be handled at Tian Sa Port as before. The road distance between Da Nang Port and

Quy Nhon Port is 300 km. The reduction in exhaust gas is calculated as follows.

⊿ GC = ⊿ DL × UC

⊿ GN = ⊿DL × UN

Where,

⊿GC : Reduction amount of CO2 emissions (ton-C / year)

⊿GN : Reduction amount of NO x emissions (ton / year)

⊿DL : Decrease in land transport distance by project implementation (units · km / year)

UC : CO2 emissions per unit of land transport (tons - C / unit· km)

In 40 km / h; 396.98 (g-C / unit · km)

UN : NOx emissions per unit of land transport (ton / km · km)

In 40 km / h; 5.85 (g / unit · km)

Results of reductions in CO2 and NOx emissions (2)

The results of reductions in CO2 and NOx emissions are as follows:

Table 3-1 Results of reduction CO2 and NOx emission

Container Cargo Volume CO2 (ton-C/year) NOx (ton/year)

500,000TEU 79,396 1,170

900,000TEU 142,913 2,106

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Effects on the reduction in the use of fossil fuel 5.2

An improved domestic energy supply and demand situation in Vietnam, and stable energy supply in Japan are

expected due to the reduction in the use of fossil fuel, which will be calculated by examining the shift in transport

from land to sea.

Calculation method (1)

The calculation method which yields the decrease in fossil fuel is the same as the calculation method used for

determining the reduction in CO2 emissions. The formula is as follows.

⊿E =⊿DL×F

F = 18,000(37×𝑉×𝑒−0.049×𝑉+98)×𝑊+7.9×𝑉1.2

Where,

⊿E : Reduction amount of fuel (liter / year)

⊿DL : Decrease in land transport distance (units · km / year)

F : Fuel Consumption amount per unit of land transport (liter / units · km)

V : Speed (Ave 40km/h)

W : Weight (Ave 15ton)

Results of reductions in diesel fuel (2)

The results of reductions in diesel fuel are as follows:

Table 3-2 Results of diesel fuel reduction

Container Cargo Volume Diesel fuel (kiloliter/year)

500,000TEU 684,000

900,000TEU 1,231,200

Effects on the stable supply of energy in Japan 5.3

Gasoline-fueled cars run by firing fuel in the engine, thereby exhausting greenhouse gas CO2 and NOx which is

harmful to human body, etc. Namely, reduction in the use of said fuel will directly lead to the reduction in the

discharge of CO2 and NOx.

In consequence of the above paragraph (1), the effects of the reduction in the discharge of CO2 and NOx can be

expressed in terms of quantity as follows:

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Table 3-3 Effects of reduction in the discharge of CO2 and NOx

Material Container handling volume

Effects of annual reduction

CO2 500,000 TEU Equivalent to 7,490ha of afforestation

※Afforestation absorbs CO2 at a rate of 10.6t-CO2/ha/year

Source: “Good Practice Guidance for Land Use, Land Use Change and Forestry (Guideline of Good Method)” (IPCC: Intergovernmental Panel on Climate Change)

900,000 TEU Equivalent to 13,482ha of afforestation

NOx 500,000 TEU Equivalent to the reduction of 500,000 cars

Conversion rate of 1TEU/car assumed.

900,000 TEU Equivalent to the reduction of 900,000 cars

Furthermore, the reduction in the use of fuel will control emission of greenhouse gas, it can possibly contribute

to environmental conservation (to contain global warming) of Vietnam, or the world. In addition, improvement

in Vietnam in the fuel supply and demand balance can also contribute to a stable supply of energy for Japan that

imports 99.6% of its petroleum requirement from abroad.

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Chapter 4 Evaluation of Environmental and Social Impacts This chapter comprises the following descriptions that have been prepared on the basis of the results of reviewing

the ongoing Pre-Feasibility Study (“pre-F/S”), and of making reference to information on environmental and

social impacts acquired from the existing reports and local surveys:

- Present status of the project site,

- Potential impacts on environmental and social conditions and mitigation measures,

- Vietnamese laws on environment and social considerations, and

- Necessary matters for and related to the implementation of the Project.

Since the project is on the stage of a pre-F/S phase, the project owner and the scope of the Project are not yet

determined. Consequently, a part of the information obtained from relevant authorities and the contents of pre-F/S

are based on general knowledge or left as undecided, so that in-depth study or evaluation on these pieces of

information needs to be conducted at the time of the F/S phase of this Project and implementation of EIA that

contemplates the finalized project scope.

Furthermore, on the assumption that Japanese ODA Loan funds will used for the public investment portion of this

Project, it falls under a large-scaled project in the port and harbor sector enumerated in JICA’s “Environmental

and Social Considerations Guidelines” (published in April 2010), the Project is assumed to have a certain degree

of impact on the environment. Consequently, a sufficient confirmation in terms of environmental and social

considerations is necessary at implementing this Project.

1. Analysis of current environmental and social situation

Environmental contamination 1.1

Air contamination (1)

There are two air quality monitoring stations in Da Nang City: one monitoring station inside the city, and the other

located near the airport. According to DONRE’s internal agency EPA (Environmental Protection Agency) which

is in charge of environmental monitoring for Da Nang City, no major air pollution has been recognized.

Water quality contamination (2)

An automatic surface water quality monitoring station of Da Nang City is located in Han River. The measured

parameters are COD, BOD, Salinity, TSS, pH and temperature. Manual water quality sampling surveys are also

conducted every month for living environment parameters and some heavy metals in the beach, Da Nang Bay, and

Han River.

Waste water monitoring stations are mainly keeping watch over companies discharging more than 1,000m3/day of

wastewater, wastewater originating in industrial parks (currently only Hoa Cam industrial park installs an

automatic monitoring system), and sanitary wastewater. According to EPA, no major water pollution has been

recognized.

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Wastes (3)

According to the environmental protection law, for the preservation of marine environment, a corresponding

permit should be obtained from DONRE, depending on the characteristics of waste, before dumping wastes into

the sea. In particular, disposal of radioactive waste is prohibited, and pre-treatment of some other wastes

potentially harmful to human body, ecosystem and fishery is necessary beforehand. According to Decree

40/2016/ND-CP, dredge soil is designated as a material that can be dumped into the sea.

One waste treatment facility is in operation on land for the final disposal of urban, industrial and medical wastes

originating in Da Nang City. However, the capacity is expected to be short in 2020 due to the rapidly progressing

urbanization and sightseeing development.

Natural environment 1.2

Protected area (1)

There are sixteen (16) MPAs (Marine Protected Area) designated in Vietnam. However, no MPAs are registered

in Da Nang Bay and the sea areas in the vicinity.

Meanwhile, two national conservation parks are designated by Da Nang City, which include coasts and sea areas

extending from Hon Chao to Hai Van Nam, and nearly the whole of Son Tra Headland. Confirmation has been

made with DONRE that the project site is out of the national conservation areas as shown Figure 4-1.

Figure 4-1 National Conservation Parks Designated by Da Nang City

Hon Chao to Hai Van Nam Son Tra Peninsula

Source：Prepared by METI Study Team

Ecosystem (2)

Since an ecosystem survey of Da Nang Bay including the proximity of the project site is scheduled to be

implemented by DONRE in the future, detailed information needs to be confirmed with the result of the EIA to be

implemented later. At this time point, while live coral (in red) and sea grass (in green) communities are found

along the shorelines of Da Nang Bay and Son Tra Headland as shown Figure 4-2. However, no live corals and sea

grasses are found at or near the project site.

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Figure 4-2 Distribution of Coral and Sea Plants

Source：EIA in the Study for Tien Sa - Da Nang Port Improvement Project (Phase II)

Social environment 1.3

Resettlement (1)

Given that all land in Vietnam belongs to the government, in case land acquisition is necessary for a new project,

a PMU (Project Management Unit) is established under the competent People’s Committee, and the PMU will

promote an early implementation of resettlement in cooperation with DPI (Department of Planning and

Investment).

For this Project, resettlement of approximately 30 to 40 households is expected for a short section of the new

access road near the shoreline. Da Nang City People’s Committee is experienced in realizing a large number of

resettlement activities involving more than 5,000 households to secure project sites for constructing an access road

(approximately 12 km) and a bypass road for Tien Sa Port Improvement Project (Phase I), as well as those

required for the development of urban areas.

Living and livelihood (2)

There are many bathing resorts, restaurants, hotels and other tourism facilities in operation along the coast line of

Da Nang City. Da Nang PC puts a priority on the policy to develop tourism in order to realize a sustainable

economic development of the central region. However, the increasing cargo handling volume at Tien Sa port

located in the east of the city where tourist development is in progress has become a critical issue of traffic jam

and accidents that caused by trucks that transport port cargoes in the neighborhood of the sightseeing district.

According to the Department of Agriculture and Rural Development of Da Nang City, the government of Vietnam

is encouraging people engaged in fishery to change their fishing style from coastal fishing to deep-sea fishing. The

number of small boats is expected to be reduced from approximately 800 boats at present to some 100 boats in the

future. The department expects that the number of small boats in operation near Lien Chieu port area is roughly

2 % of the 800 boats, which means there will be no major impacts by the Project on coastal fishing activities.

Project Site

Live Coral

Dead Coral

Sea Glass

Sea Weed

Legend

77

Future development plan 1.4

Da Nang City is developing by aggressively inviting manufacturing factories to industrial parks in a manner

compatible with the promotion of IT related industries and tourism. The urbanization of Da Nang City is

accelerated in line with its population growth of more than 1% every year. Having declared an environmental city

under these circumstances, Da Nang PC is dealing with the solutions to urban environmental problems by

positively receiving supports from overseas development aids related to water utility, waste management facility,

urban and transport development and formulation of environmental monitoring programs, etc.

Sudden environmental degradation in the above present status is, therefore, unlikely, but the following

environmental improvement effects may not be achieved without the Lien Chieu port project.

2. Environmental Improvement Effects of the Project Implementation

Improvement of traffic congestion 2.1

The west coast of Da Nang City has been realizing a rapid tourism industry development along the coast line and

the number of visitors from home and abroad to Da Nang City in 2016 increased by approximately 20% from the

last year.

Meanwhile, the amount of cargo handling volume in Tien Sa port located in the east of Da Nang City has been

increasing by approximately 20% every year recently. The number of container cargos brought from industrial

parks located and being developed in some provinces near Da Nang City such as Quang Nam Province is also

increasing year by year. Therefore, incidence of chronic traffic jams by cargo trucks and accidents of collision and

sideslip by large-size trucks is increasing in the vicinity of the tourist district as shown Figure 4-3.

Such being the case, in case cargo handling is shared with Lien Chieu port where freight vehicles can access outer

major roads without passing the city area or tourism area, reduction in the number of traffic jams and accidents is

expected since interference will be lessened between port-related traffic and environment related industries. At the

same time, improvement in the air environment is also expected since reduction will be made in the emissions of

gas from large-size freight vehicles, which tends to be more exhausted during the starting and stopping motions of

vehicles at the time of congestion.

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Figure 4-3 Situation of Freight Vehicle Traffic Jam from City to Tien Sa


Improvement of the safety of port operation 2.2

Currently, Tien Sa port deals with cargos in excess of its capacity, and it is becoming a port being increasingly

called at by international large cruise ships as well. Therefore, serious interceptions between cargos and

passengers occur in the terminals of Tien Sa port. The situation is not only lowering cargo handling efficiency but

is also generating an issue in terms of safety control of dock workers and passengers. Therefore, Da Nang Port

Joint Stock Company is planning to construct a quay capable of accommodating cruise ships in the framework of

the ongoing Da Nang Port Improvement Project (Phase II) thereby enhancing cargo handling capacity and safety

in the operation of the terminal. However, the increase of cargo handling capacity at Tien Sa port has a limit due

to the difficulty in securing further land space for the construction work

In such a situation, construction of a new port in Lien Chieu and sharing of cargo handling with Tien Sa port will

ease the cargo handling burden on Tien Sa, so that improvement of labor conditions of dock workers and safety of

passengers going ashore from cruise ships are expected.

Creation of employment opportunities 2.3

Out of six (6) industrial parks in Da Nang City, four (4) are almost fully occupied. Da Nang City intends to

develop two new industrial parks (in total 1,200ha), and new companies will be the tenants subsequently.

Factories operating in these industrial parks transfer every day more than 1,000 employees by large size bus

between their living towns around Da Nang city and the factories, potentially making associated traffic congestion

in the future become an issue of stable securement of employees.

In this context, shifting cargo originating in Tien Sa to Lien Chieu thereby solving the traffic congestion in Da

Nang City will promote or stabilize employment in the industrial parks of people living in the adjacent provinces,

which will expectedly contribute to reducing disparities in the living standard between urban and rural areas in the

Central Vietnam.

Project Site

Tien Sa port

Legend Industrial Park Freight Vehicle Route

79

Half of some 100 Japanese companies operating in Da Nang City are industrial sectors with factories. The rest are

mainly companies related to tourism and IT sectors. Therefore, compatibility between the development of new

industrial parks and the promotion of tourism industry is expected to generate opportunities of new employment

that relates to the touristic industry in Da Nang City and nearby sightseeing districts.

3. Environmental and Social Impacts of the Project Implementation ·

Potential impacts on environment 3.1

An environmental impact assessment study has not yet been conducted for this Lien Chieu Project, and available

environment-related information in the Pre-F/S report is limited to the levels of general knowledge. Consequently,

available information from the relevant authorities and the contents of Tien Sa - Da Nang Port Improvement

Project (Phase II) were consulted to forecast potential impacts of the Project and to prepare a check list for JICA’s

guideline on environmental and social considerations.

The major negative impacts of the Project are estimated to be the below-listed three (3). The detailed information

of the impact, such as scope and degree will, however, be determined by the oncoming environmental and social

impact study during the F/S phase.

1. Water pollution due to the dredging of channel and berth, dumping of dredge soil, and reclamation work

During the phase I of the Project, approximately 5,000,000 m3 of seabed dredging will be required to facilitate

navigation and berthing of cargo ships. Since offshore dumping of dredge soil was not approved according to

the EIA prepared in Tien Sa Port Improvement Project (Phase II), disposal of the dredge soil on to the land

reclamation area is proposed in the Pre-F/S, but without referring to its details. Although past studies reported

no contamination by seabed soil around the scheduled dredging site of the Project, marine ecosystems, such as

coral reefs and sea grasses located in the neighboring seas, may be jeopardized due to the dispersion of

pollutants in case proper treatment or disposal is not implemented. Therefore, on top of conducting a sufficient

study of the method of dredging and reclamation, treatment and dumping of dredge soil during the oncoming

feasibility study (F/S study), port facility planning and design that envisage minimization of dredge soil volume

need to be performed.

2. Increase in marine traffic and accident caused by development of new port

In Da Nang Bay, a variety of vessels are in navigation, including cargo ships, oil tankers, fishing boats, small

sightseeing boats, large cruise ships and navy ships. Although incidence of marine accidents is low at present,

higher risks of raising the incidence are expected to result from the construction of a new port in Lien Chieu

and the resultant increase in the number and size of navigating vessels. Accidents in particular related to oil

storage facilities or oil tankers can result in a large volume of oil spillage and significant damage on marine

ecosystem and tourism industry. Consequently, establishment is strongly advised of a PMB (Port Management

Body) that enables information sharing by a centralized management of cargo handling work and navigating

vessels in Da Nang Bay to minimize the risk of collision accidents.

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3. Resettlement required for access road construction

A part of the access road that links port facilities with the existing roads on land is expected to pass through a

district of houses and buildings near the shoreline. While actual number of households to be resettled needs to

be confirmed by taking into account the resettlement action plan or the result of social survey during the F/S,

roughly 30 to 40 households will probably have to be resettled. As shown in Figure 4-4, most of the facilities to

be resettled are houses; there are also a few commercial facilities, such as restaurants and stores recognized

along the road.

Necessity of preparing the resettlement action plan has not yet been confirmed, but if necessary, the plan will be

prepared at the same time as the EIA report. Even if the resettlement action plan is not required, the social

survey will be conducted and incorporated to EIA report.

Da Nang City is experienced in realizing a large number of resettlement activities to secure project sites for

constructing access roads including those for the Tien Sa Port Improvement Project (Phase I), so that

implementation of proper and prompt resettlement is desirable in this Project as well.

Figure 4-4 Current Situation of New Access Road Construction Site

Potential Resettlement Area

（View from Roadside）

Potential Resettlement Area

（View from inside）


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Table 4-1 Result of Confirmation with Environmental Checklist (1：Permits and Explanation)

Category Environmental Item Main Check Items Yes:Y

No: N Confirmation of Environmental Considerations (Reasons,

Mitigation Measures)

1 Permits and Explanation

1) EIA and

Environmental

Permits

(a) Have EIA reports been already prepared in official process?

(b) Have EIA reports been approved by authorities of the host

country's government?

(c) Have EIA reports been unconditionally approved? If

conditions are imposed on the approval of EIA reports, are

the conditions satisfied?

(d) In addition to the above approvals, have other required

environmental permits been obtained from the appropriate

regulatory authorities of the host country's government?

(a) N/A

(b) N/A

(c) N/A

(d) N/A

(a) EIA report will be prepared during the F/S stage. (Not

available at the time of Pre-F/S)

(b) Ditto

(c) Ditto

(d) Ditto

(2) Explanation

to the Local

Stakeholders

(a) Have contents of the project and the potential impacts been

adequately explained to the local stakeholders based on

appropriate procedures, including information disclosure? Is

understanding obtained from the local stakeholders?

(b) Have the comment from the stakeholders (such as local

residents) been reflected on the project design?

(a) N/A

(b) N/A

(a) Information disclosure to local people will be

organized during the F/S stage. (Not available at the

time of Pre-F/S)

(b) Ditto

(3) Examination of

Alternatives

(a) Have alternative plans of the project been examined with

social and environmental considerations?

(a) N/A (a) Alternative plans will be prepared during the F/S stage.

(Not available at the time of Pre-F/S)

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Table 4-2 Result of Confirmation with Environmental Checklist (2：Pollution Control)

Category Environmental

Item Main Check Items

Yes:Y No: N

Confirmation of Environmental Considerations (Reasons, Mitigation Measures)

2 Pollution

Control

(1) Air Quality

(a) Do air pollutants, such as sulfur oxides (SOx), nitrogen oxides (NOx), and soot and dust emitted from ships, vehicles and project equipment comply with the country's emission standards? Are any mitigating measures taken?

(a) Y (a) In operation phase, increased port related traffics could increase emission of such air pollutants. However, efficient operation using enlarged vessels and equipment will reduce total gas emission. In order to minimize emission of air pollutants, maintenance of equipment and vehicles used for port operation will properly be conducted and be driven using qualified fuel. Detailed studies will be made during the preparation of EIA report.

(2) Water Quality

(a) Do effluents from the project facilities comply with the country's effluent and environmental standards?

(b) Do effluents from the ships and other project equipment comply with the country's effluent and environmental standards?

(c) Does the project take any measures to prevent leakage of oils and toxicants?

(d) Does the project cause any alterations in coastal lines and disappearance/appearance of surface water to change water temperature or quality by decrease of water exchange or changes in flow regimes?

(e) Does the project take any measures to prevent polluting surface, sea or underground water by the penetration from reclaimed lands?

(a) Y (b) Y (c) Y (d) N (e) N

(a) In general, project facilities (container terminal) will not discharge large amount of and toxic effluent. Domestic discharges will be treated in individual septic tanks in the terminal to meet effluent quality standards before being discharged.

(b) Oily efferent originated from equipment maintenance facilities will be separated from others and corrected by a licensed waste management company contracted by the port operator.

(c) Potential source of oil and toxicants pollution, such as equipment maintenance shop, fuel station will be enclosed by correction ditch to prevent leakages.

(d) Since the project will include a facility that projects from the land out into the sea, a change in near shore ocean current is expected. However, past studies showed the presence of facilities will not cause significant impact on shoreline and ocean current.

(e) Since natural sand exploited from vicinal sources will

83

be used for reclamation, no pollution by reclamation materials is expected.

(3) Wastes (a) Are wastes generated from the ships and other project facilities properly treated and disposed of in accordance with the country's regulations?

(b) Is offshore dumping of dredged soil properly disposed in accordance with the country's regulations?

(c) Does the project take any measures to avoid dumping or discharge toxicants?

(a) Y (b) Y (c) Y

(a) Wastes and gavages will be collected and properly disposed of by a licensed waste management company contracted by construction contractors and port operators.

(b) Dredged seabed materials will be disposed of following national standards at a designated on-land disposal area, which is going to be confirmed through F/S study. The quality of overflow being discharged from disposal/reclamation areas to the sea will be carefully monitored.

(c) The project will not handle toxic materials. However, oil spill response program is prepared in EIA report.

(4) Noise and Vibration

(a) Do noise and vibrations from the vehicles and train traffic comply with the country's standards?

(a) Y (a) In the operation phase, increased port related traffic can raise noise and vibration levels. In order to minimize emission of air pollutants, maintenance of equipment and vehicles used for port operation will properly be conducted and be driven using qualified fuel. Detailed studies will be made during the preparation of EIA report.

(5) Subsidence

(a) In the case of extraction of a large volume of groundwater, is there a possibility that the extraction of groundwater will cause subsidence?

(a) N (a) No large volume of ground water is extracted in the project.

(6) Odor (a) Are there any odor sources? Are adequate odor control measures taken?

(a) N (a) No odder source is expected in the project.

(7) Sediment (a) Are adequate measures taken to prevent contamination of sediments by discharges or dumping of hazardous materials from the ships and related facilities?

(a) Y (a) No discharge of hazardous materials is expected. However, an oil spill response program is prepared in EIA report.

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Table 4-3 Result of Confirmation with Environmental Checklist (3：Natural Environment)



Yes:Y No: N


3 Natural

Environment

(1) Protected Areas

(a) Is the project site located in the protected areas designated by the country's laws or international treaties and conventions? Is there a possibility that the project will affect the protected areas?

(a) N (a) Project site is not located in the protected area.

(2) Ecosystem (a) Does the project site encompass primeval forests, tropical rain forests, ecologically valuable habitats (e.g., coral reefs, mangroves, or tidal flats)?

(b) Does the project site encompass the protected habitats of endangered species designated by the country's laws or international treaties and conventions?

(c) If significant ecological impacts are anticipated, are adequate protection measures taken to reduce the impacts on the ecosystem?

(d) Is there a possibility that the project will adversely affect aquatic organisms? Are adequate measures taken to reduce negative impacts on aquatic organisms?

(e) Is there a possibility that the project will adversely affect vegetation or wildlife of coastal zones? If any negative impacts are anticipated, are adequate measures taken to reduce the impacts on vegetation and wildlife?

(a) N (b) N (c) N (d) N (e) N

(a) Two (2) areas adjacent to the project site are protected by the local authority, DONRE. However, no significant impact is expected because no coral reefs and seaweed beds are found around the project site.

(b) No endangered species is found in the project site. Detailed studies will be made when preparing EIA.

(c) No significant impacts are expected to the above areas.

(d) Since the project site has already been modified by the development of oil storage facilities, no major impacts on aquatic fauna expected. However detailed studies will be made when preparing EIA

(e) Ditto

(3) Hydrology (a) Do the project facilities affect adversely flow regimes, waves, tides, currents of rivers, etc. if the project facilities are constructed on/by the seas?

(a) N (a) Since the project will include a facility that projects from the land out into the sea, a change in near shore ocean current is expected. However, past studies showed the presence of facilities will not cause significant impact on shoreline and ocean current.

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Table 4-4 Result of Confirmation with Environmental Checklist (4：Social Environment)



Yes:Y No: N


4 Social

Environment

(1) Resettlement

(a) Is involuntary resettlement caused by project implementation? If involuntary resettlement is caused, are efforts made to minimize the impacts caused by the resettlement?

(b) Is adequate explanation on compensation and resettlement assistance given to affected people prior to resettlement?

(c) Is the resettlement plan, including compensation with full replacement costs, restoration of livelihoods and living standards developed based on socioeconomic studies on resettlement?

(d) Are the compensations going to be paid prior to the resettlement?

(e) Are the compensation policies prepared in document? (f) Does the resettlement plan pay particular attention to

vulnerable groups or people, including women, children, the elderly, and people below the poverty line, ethnic minorities, and indigenous peoples?

(g) Are agreements with the affected people obtained prior to resettlement?

(h) Is the organizational framework established to properly implement resettlement? Are the capacity and budget secured to implement the plan?

(i) Are any plans developed to monitor the impacts of resettlement?

(j) Is the grievance redress mechanism established?

(a) Y (b) N.A (c) N.A (d) N.A (e) N.A (f) N.A (g) N.A (h) N.A (i) N.A (j) N.A

(a) Resettlement will be expected for the short section of new access road. However the number of potential affected households will be as small as 30 to 40. Detailed studies will be made during the F/S stage. DPI will be responsible for organizing proper compensation and information disclosure.

(b)～(j) Detailed studies will be made during the F/S stage.

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(2) Living and Livelihood

(a) Is there a possibility that the project will adversely affect the living conditions of inhabitants? Are adequate measures considered to reduce the impacts, if necessary?

(b) Is there a possibility that changes in water uses (including fisheries and recreational uses) in the surrounding areas due to the project implementation will adversely affect the livelihoods of inhabitants?

(c) Is there a possibility that port and harbor facilities will adversely affect the existing water traffic and road traffic in the surrounding areas?

(d) Is there a possibility that diseases, including infectious diseases, such as HIV will be brought due to immigration of workers associated with the project? Are considerations given to public health, if necessary?

(a) Y (b) Y (c) Y (d) Y

(a) The livelihood of affected households is likely to be lost temporally. The proper compensation and training will be provided by a specialized committee to recover their loss of livelihood shortly after the relocation. However, detailed studies will be made during the F/S. On the other hand, expansion of port facilities may create positive impact as new employment opportunities and business chances in local communities.

(b) During construction, local fishing boats will have temporally restriction on their operation route (not fishing ground) due to dredging/disposal works. To avoid traffic accidents, dredging/disposal activity schedule will be informed to fishermen in advance.

(c) On completion of the project, port related water and land traffic will be increased. However, access road to the port has been constructed having enough traffic capacity. In water area, necessary navigation aids, such as lighting buoys and beacons are installed to prevent ship collision and interference to local traffics. Moreover port management authorities will be established to minimize the impact.

(d) There is possibility of prevalence of infectious diseases brought by construction workers. To avoid this, contractors will provide education and awareness program to the workers.

(3) Heritage

(a) Is there a possibility that the project will damage the local archeological, historical, cultural, and religious heritage? Are adequate measures considered to protect these sites in

(a) N (a) The project site is located within the present oil storage facility area already developed, and no heritage sites have been reported.

87

accordance with the country's laws?

(4) Landscape (a) Is there a possibility that the project will adversely affect the local landscape? Are necessary measures taken?

(a) N (a) The project site is located within the present oil storage facility area already developed, and no important landscape sites have been reported.

(5) Ethnic Minorities and Indigenous Peoples

(a) Are considerations given to reduce impacts on the culture and lifestyle of ethnic minorities and indigenous peoples?

(b) Are all of the rights of ethnic minorities and indigenous peoples in relation to land and resources respected?

(a) N/A (b) N/A

(a), (b) No ethnic minorities and indigenous peoples are expected to be involved. However, detailed studies will be made during the F/S.

(6) Working Conditions

(a) Is the project proponent not violating any laws and ordinances associated with the working conditions of the country which the project proponent should observe in the project? (b) Are tangible safety considerations in place for individuals involved in the project, such as the installation of safety equipment which prevents industrial accidents, and management of hazardous materials? (c) Are intangible measures being planned and implemented for individuals involved in the project, such as the establishment of a safety and health program, and safety training (including traffic safety and public health) for workers? (d) Are appropriate measures taken to ensure that security guards involved in the project not to violate safety of other individuals involved, or local residents?

(a) Y (b) Y (c) Y (d) Y

(a) Port facilities will be managed by operator to be selected in bidding process by the project owner. Such working and safety conditions abiding related laws and ordinances will be required to the port operator as requirement in bidding conditions. In construction stage, contractors are required as same above.

(b),(c),(d) ditto

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Table 4-5 Result of Confirmation with Environmental Checklist (5：Others、6：Note)

Category Environmental Item Main Check Items Yes:Y

No: N Confirmation of Environmental Considerations (Reasons,

Mitigation Measures)

5 Others

(1) Impacts

during

Construction

(a) Are adequate measures considered to reduce impacts during

construction (e.g., noise, vibrations, turbid water, dust,

exhaust gases, and wastes)?

(b) If construction activities adversely affect the natural

environment (ecosystem), are adequate measures considered

to reduce impacts?

(c) If construction activities adversely affect the social

environment, are adequate measures considered to reduce

impacts?

(a) Y

(b) Y

(c) Y

(a) In order to reduce such negative impacts on the

surrounding local communities, bulky construction

materials, such as sand and stone will be transported to

the construction site from the seaside. The project

owner will encourage contractors in bidding process to

use low emission, noise and vibration equipment.

(b) In order to avoid negative impacts to aquatic

environment by dredge soil dumping, location of

dumping will be designated keeping an adequate

distance from the sensitive areas.

(c) No significant adverse impacts due to construction

activities is expected. However, if observed, adequate

measures, such as slowdown and suspension of

construction activities, will be taken until unfavorable

conditions are recovered.

(2) Monitoring

(a) Does the proponent develop and implement a monitoring

program for the environmental items that are considered to

have potential impacts?

(b) What are the items, methods and frequencies of the

monitoring program?

(c) Does the proponent establish an adequate monitoring

framework (organization, personnel, equipment, and adequate

budget to sustain the monitoring framework)?

(a) N.A

(b) N.A

(c) N.A

(d) N.A

(a) A proper environmental monitoring program will be

planned in EIA repot.

(b) Item and frequency of the monitoring program will be

specified in EIA report as follows.

(c) Monitoring budget and organization will be established

in EIA report

(d) Reporting to the organizations and reporting frequency

will be established in EIA report

89

(d) Are any regulatory requirements pertaining to the monitoring

report system identified, such as the format and frequency of

reports from the proponent to the regulatory authorities?

6 Note

Note on Using

Environmental

Checklist

(a) Where necessary, impacts on groundwater hydrology

(groundwater level drawdown and salinization) that may be

caused by alteration of topography, such as land reclamation

and canal excavation, should be considered, and impacts,

such as land subsidence that may be caused by groundwater

uses should be considered. If significant impacts are

anticipated, adequate mitigation measures should be taken.

(b) If necessary, the impacts to transboundary or global issues

should be confirmed, if necessary (e.g., the project includes

factors that may cause problems, such as transboundary waste

treatment, acid rain, destruction of the ozone layer, or global

warming).

(a) N.A

(b) N.A

(a) Hardly anticipated.

(b) Hardly anticipated.

90

4. Outline of Vietnamese Laws on Environmental and Social

Considerations and Compliance Measures

Environmental administration of Vietnam 4.1

The state structure of Vietnam comprises four levels: central, provincial, district and communal. The

environmental state agencies are Ministry of Natural and Resources and Environment (MONRE) in the central

level and Department of Natural and Resources and Environment (DONRE) in the provincial level.

MONRE is the governmental agency responsible for the state management of natural resources, including land,

water, mineral resources, environment, hydrometeorology, geological survey and topography.

DONRE is a functional agency that supports People’s Committees (PCs) that manage natural resources and the

environment at the local level. DONRE is responsible for providing PCs with grants, extensions and revocations

of environmental certificates concerning the implementation of projects. DONRE’s roles include conducting

environmental compliance inspections, settling environmental-related disputes and problems concerning

compliance and violations within its provincial jurisdiction. Furthermore, in addition to the environmental

compliance inspections, DONRE evaluates EIAs submitted by the project implementing entity and collects fees

for environmental protection.

Under the Law on Environmental Protection, MONRE is liable to fulfil administrative duties for environmental

management by cooperating with related ministries and agencies on the basis of the relevant principle. To

strengthen the coordinative capability, an inner organizational reform was made in MONRE in September 2008,

thereby giving birth to Vietnamese Environment Administration (VEA). This agency has environmental

management-related functions from formulation of policies and strategies to administrative execution such as EIA

and verification.

In a rural province, branch offices of VEA are established in respective provincial DONREs following MONRE’s

organizational reform.

Local administration in Vietnam is controlled by the PC of respective provinces or Municipalities of Vietnam, so

that regional PCs are playing an important role in the measures for environmental pollutions.

Outline of Vietnamese environmental laws 4.2

Laws related to environmental protection (1)

Recent laws, decrees, and circulars related to environmental protection are as follows:

- Environmental Protection Law adopted by the National Assembly of the Socialist Republic of Vietnam on

29 November 2005 and the President signed an order issued on 12 December 2005;

- Decree No. 29/2011/ND-CP dated 18 April 2011 of the Government on strategic environmental assessment,

environmental impact assessment, and environmental protection commitment;

91

- Circular No. 26/2011/TT-BTNMT dated 18 July 2011 of the Ministry of Natural Resources and

Environment detailing a number of articles of Decree No. 29/2011/ND-CP of the Government on Strategic

Environmental assessment, Environmental impact assessment, Environmental Protection Commitment.

Decree No. 29/2011/ND-CP requires the following projects to prepare EIA and its appraisal by DONRE:

- Construction of river ports or sea ports for ships of 1,000 DWT or more.

- Project associated with exploiting sand or dredging river/sea beds for site preparation or to obtain

construction materials with output capacities of 50,000 m3 or more materials per year.

Laws related to environmental assessment (2)

The Law on Environmental Protection passed the National Assembly of the Socialist Republic of Vietnam on

November 29, 2005, promulgated on December 12, 2005 as the President’s Ordinance 29/2005/L/CTN and

enforced as of July 1, 2006. The revised Law on Environmental Protection (55/2014/QH13) was approved on

June 23, 2014 by the National Assembly to come into force on January 1, 2015.

Relevant to the Project in the revised Law on Environmental Protection are Chapter 3 clause 2 (Strategic

Environmental Assessment, SEA) (sections 13-17) and clause 3 (EIA) (sections 18-28).

The overview of environmental impact assessment is as follows:

Projects for which EIA must be implemented 1)

- Projects that require approvals of the National Assembly, government or prime minister

- Projects that use designated natural reserves, national parks, historical or cultural sites, world heritages,

biosphere reserves and scenic sites

- Projects that might have a negative impact on the environment

Implementation of EIA 2)

- The project implementing entity can implement EIA on its own or request a consultation firm to conduct

EIA. In either case, the project implementing entity will bear legal responsibility for the result of EIA.

- EIA must be conducted in the preparatory stage of a project.

- The result of EIA will be included in the EIA evaluation report.

- The costs for the preparation of EIA report and review are to be paid from the invested fund of the project

implementing entity without fail.

Configuration of EIA reports 3)

The EIA report should include following information:

- Background of the establishment, the project implementing entity, authority approving the project, and

method for implementing EIA evaluation.

- Selection of work method and evaluation of work and activities for a project that may have negative impacts

on the environment

- Explanations on the natural environment of the project implementation site and surrounding areas, evaluation

of the current socioeconomic environment, and the suitability of the project location

92

- Estimation and evaluation of impacts from the waste generated in the course of project implementation.

Estimation and evaluation of impacts on environment and people’s health

- Estimation and evaluation of the project’s risks on environment and people’s health and risk management

measures

- Measures to control impacts on the environment and people

- Environmental management and audit program

- Construction costs for environmental protection facilities and implementation costs of environmental impact

reduction measures

- Methods for implementing environmental protection measures

Evaluation of the EIA report 4)

- The representative or head of the organization subject to evaluation must evaluate the EIA report with the

consultation of the evaluation committee or relevant organizations and take legal responsibility for the

evaluation result.

- As needed, the evaluating institution of the EIA report must carry out on-site verification and hear opposing

views from agencies, organization and specialists of different fields.

- If there is a need for corrections or additions during the evaluati0on period, the evaluating institution must

notify the project implementing entity of such effects in writing.

Approval of the EIA report 5)

- Within 20 days of receiving EIA report that is corrected and supplemented as pointed out by the evaluation

committee, the head of the evaluating institution must consider and make decision regarding the approval of

the EIA report. If the report is to be rejected, a response with its reasoning must be given to the project

implementing entity in writing.

Environmental standards (3)

Environmental standards for air quality 1)

The applicable air quality standard is national technological standard QCVN 05: 2009/BTNMT

Environmental standards for sanitary waste water quality 2)

The applicable sanitary wastewater standard is national technological standard QCVN

14:2008/BTNMT

Environmental standards for surface water quality 3)

The applicable surface water quality standard is national technological standard QCVN

08:2008/BTNMT.

93

Environmental standards for marine water quality 4)

The applicable marine water quality standard is national technological standard QCVN

10:2008/BTNMT

Environmental standards for waste management 5)

Laws and standards related to solid waste management are as follows:

- Decree 59/2007/ND-CP for solid waste management

- Circular 12/2006/TT-BTNMT for guidance and procedure for the application, registration and permission

for hazardous waste management.

- TCVN 6705:2009 for classification of non-hazardous waste

- TCVN 6706:2009 for classification of hazardous waste

- TCVN 6696:2009 for solid waste - requirements for sanitary landfill and environmental protection

Environmental standards for noise 6)

The applicable noise standard is national technological standard QCVN 26:2010/BTNMT

The applicable noise standard at workplace is TCVN 3985:1999

Environmental standards for vibration 7)

The applicable vibration standard is national technological standard QCVN 26:2010/BTNMT

5. Responsibilities of the Host Country for the Realization of the Project

Implementation of ESIA (Environmental Social Impact Assessment) study and information disclosure 5.1

The implementation of ESIA study including environmental and social baseline survey will be required in order to

complete EIA report and to confirm compliance of relevant laws. The information disclosure will be required to

inform stakeholders including local people affected by resettlement of the overview of the project and potential

impact to gain prior consensus.

Acquirement of approval of EIA and relevant environmental permits 5.2

The environmental regulation Decree No. 29/2011/ND-CP requires the Project to prepare EIA. The project owner

will be subject to negotiate with MONRE/DONRE to clarify the necessary process and scope of EIA, and will be

required to obtain the approval of EIA and relevant environmental permits.

94

Chapter 5 Financial and Economic Evaluation

1. Project Cost Estimation

The project cost presented in the Pre-feasibility Study is calculated based on the relevant norms and regulations

for estimation of construction costs and unit costs of material and labor issued by Ministry of Construction and Da

Nang People’s Committee, respectively. Based on these references, the direct project cost of Phase I shown in

Table 3-3 was reviewed as follows.

Based on the above-mentioned results of Port Facility Design and Road Planning and given that as in the

previous sections the breakwater and seawall are to be constructed by the structural type of Alternative 4 shown in

Table 3-42 and that construction of the port access road on land (1.5km segment between the shoreline and the

existing trunk load) is not necessary in Phase I, the direct project cost of the public fund portion resulted to

decrease by 15% (from 14.2 billion JPY to 12.1 billion JPY) as shown in Table 5-1. In addition, the direct

construction costs of breakwater and seawall are estimated on the assumptions that a special working vessel(s) for

soil improvement works (gravel compaction method) is(are) mobilized from Singapore and the wave dissipating

concrete blocks of which patent is owned by a Japanese manufacture are used.

Table 5-1 Breakdown of Direct Project Cost for Phase I (After review: constructing 1 general cargo berth and 1 container berth)

Source: Prepared by METI Study Team

95

Reviewing other items of direct project costs, comparing with those estimated for Tien Sa Phase II project and

similar projects in Vietnam and on the assumption that the facilities will be constructed by a local company(ies),

the direct project costs presented in the Pre-feasibility Study are understood to be within a reasonable range.

However, the costs of basin and channel dredging and soil improvement for road, yard and seawall may increase

depending on the results of detailed environmental and geotechnical surveys that are supposed to be implemented

in the future.

In order to evaluate financial advantages of the case of constructing two (2) container berths in Phase I, direct

project cost shown in Table 5-2 is estimated to compare with the original case of constructing one (1) container

berth in Phase I.

Table 5-2 Breakdown of Direct Project Cost for Phase I (After review: constructing 1 general cargo berth and 2 container berths)


96

2. Outline of the results of preliminary financial and economic evaluation

Financial Analysis 2.1

Methodology of Financial Analysis (1)

The financial analysis is to appraise the financial viability of the Project from the viewpoint of capital investment

as to whether it can yield sufficient returns. In this Study, to measure the financial viability quantitatively, FIRR

on a gross capital basis is calculated and compared with the Weighted Average Cost of Capital (WACC) as to

whether FIRR can exceed the WACC.

Da Nang People's Committee has revealed a policy to implement infrastructure development by a PPP

arrangement as much as possible. Therefore, in order to evaluate the possibility of project implementation by the

PPP method, in addition to calculating FIRR for the overall project, FIRR of both the public side and the private

side is calculated.

In this Study, FIRR as well as NPV and B/C Ratio is used to evaluate and appraise the financial feasibility of the

Project. Sensitivity analysis is also conducted.

Prerequisites for the Financial Analysis (2)

Base Year 1)

Incomes and expenses estimated in the financial analysis are expressed as the price of some fixed year throughout

the “Project Life” mentioned below. This year is called the “Base Year.” In this analysis, the year 2016 is adopted

as the “Base Year” since the expenses and revenues of the Project are prepared on the basis of the current price of

the same year.

Project Life 2)

It is assumed that engineering services for the Project will commence in 2019, and a total of 40 years is adopted as

the “Project Life”.

Foreign Currency Exchange Rate 3)

The following foreign exchange rates are adopted in the financial analysis:

VND 1.0 = ¥ 0.004628, US$1.00 = VND 22,067 as of September 2016.

Investment Cost and Japanese ODA Loan 4)

Investment cost and financial terms regarding the ODA loan Agreement with Japan are assumed as follows.

- Loan interest: 1.4% (Construction), 0.01% (Consultant Service)

- Grace period: 10 years

- Repayment: 30 years

- Corporate tax rate: 20%

97

- ODA ratio: 85%

Private bank's long term loan interest shall be 8%. Also, the private capital ratio is 30%.

Setting of Analysis Case (3)

In this study, 3 cases are set for each scenario.

In "Case-1," the existing container terminal of Tien Sa Port is effectively utilized even after construction of Lien

Chieu Port.

In "Case - 2" and "Case – 3," that cargo is shifted from the existing Tien Sa port soon after construction of Lien

Chieu Port.

Regarding the scope of the project, in "Case - 1" and "Case - 2", a new container terminal and a general cargo

terminal will be constructed (each with 1 berth) at Lien Chieu Port, and the container cargo handling capacity will

be 500,000 TEU / year (max) while the general cargo handling capacity will be 2 million tons / year (max). In

"case-3", a new container terminal with 2 berths will constructed; the container cargo handling capacity will be

900,000TEU/ year (max) and general cargo handling capacity will be 2 million tons / year (max).

In "Case – 1," the maximum handling volume at Tien Sa Port is set at 12 million tons, the same as indicated in the

master plan. In "Case-2" and "Case 3", the maximum volume is set at 10 million tons based on the road traffic

capacity.

Table 5-3 Cases for each scenario

Items

Container Terminal General Cargo Terminal

Berth

length

Operation

start year

Max Cargo

Volume

Berth

length

Operation

start year

Max Cargo

Volume

Case-1

Effective utilization of

Tien Sa Port

380m

(1Berth) 2024 500,000TEU

330m

(1Berth) 2024 2milion ton

Case-2

Early cargo shift from

Tien Sa Port

380m

(1Berth) 2022 500,000TEU

330m


Case-3

Early cargo shift from

Tien Sa Port

710m

(2Berth)

2022

2025 900,000TEU


Calculation of the FIRR (4)

The financial internal rate of return (FIRR) is used to appraise the financial viability of the Project. The FIRR is

the discount rate that makes net present values of cash inflow and outflow during the Project life equal. The

formula is expressed as follows:

98

Where,

n: Project life

i: Year

Ii: Cash inflow in the i-th year

Oi: Cash outflow in the i-th year

r: Discount rate

Concession fee Analysis (5)

In the PPP, in general, the public sector obtains a concession fee from the private sector and allocates it for

repayment of the initial cost and maintenance cost. The concession fee will basically be proposed by the private

sector.

In this study, it is assumed that a certain percentage of port operation revenues such as cargo handling fees etc.

obtained by the private sector is shared with the public side. In other words, if the concession fee is 10%, 90% of

port operation revenues such as cargo handling fees will be private income and 10% will be public side revenue.

In this survey, FIRR is calculated for cases where the concession fee is 0%, 10%, 20%.

Sensitivity Analysis (6)

Sensitivity analysis is executed to determine whether the Project will remain feasible if changes in the

assumptions used in the calculation/projections were to take place according to the degree in which they are likely

to vary from the estimated or projected values. The following three (3) cases are examined in this Study as

sensitivity analyses:

Case I: Increase in projected costs by 10%

Case II: Decrease in revenues by 10%

Case III: Combination of Cases I and II

Net Present Value (NPV) (7)

Expenses and revenues that will be generated each year during the Project life are converted to the present value

by applying the weighted average cost of the capital (WACC) as a social discount rate. Through this process,

values of expenses and revenues decrease as time passes.

Prediction of Revenues (8)

Revenues are gained by providing port services to users such as shippers and shipping lines.

Public sector gains tonnage charges, maritime safety charges and concession fee from the private sector. Private

sector gains loading charges, storage charge, wharf charges for ship etc.

99

The revenues of Port Operation are as follows;

Table 5-4 Unit Revenues of Port Operation (Container Cargo)

Public sector Items Unit Convert

to USD Remarks

Tonnage charge 10,000DWT(Domestic） /ship 200 250VND/GT 20,000DWT class /ship 1,199 0.0034USD/GT 50,000DWT class /ship 2,098 0.0034USD/GT Maritime safety charges 10,000DWT(Domestic） /ship 240 300VND/GT 20,000DWT class /ship 2,046 0.058USD/G 50,000DWT class /ship 4,602 0.058USD/GT Pilot charge 10,000DWT(Domestic） /ship 15.98 40VND/GT/NM 20,000DWT class /ship 119.91 0.0034USD/GT/NM 50,000DWT class /ship 299.78 〃 Procedure charges 10,000DWT(Domestic） /ship 9 100,000VND/time 20,000DWT class /ship 100 50USD/time 50,000DWT class /ship 100 50USD/time Private sector

Items Unit Convert to USD Remarks

Loading and unloading charge /TEU 54.0

Storage charge /TEU 5.4 Wharf charges 10,000DWT(Domestic） /ship 55 35VND/GT-hour 20,000DWT class /ship 201 0.0031USD/GT-hour 50,000DWT class /ship 1,726 〃 Rope tying and untying

charges

10,000DWT(Domestic） /ship 0 700,000 VND/time 20,000DWT class /ship 190 95USD/time 50,000DWT class /ship 190 〃 Fresh water charges 10,000DWT(Domestic） /ship 189 27,860VND/m3 20,000DWT class /ship 375 2.5USD/m3 50,000DWT class /ship 190 Opening and closing cargo

hold

10,000DWT(Domestic） /ship 27 300,000VND/time 20,000DWT class /ship 130 65USD/time 50,000DWT class /ship 130 Garbage disposal charges 10,000DWT(Domestic） /ship 7 150,000VND/time 20,000DWT class /ship 15 15USD/time 50,000DWT class /ship 15

Source：Da Nang Port Joint Stock Company No.136/QD-CĐN, Ministry Of Finance No: 01/2016/TT-BTC

100

Table 5-5 Unit Revenues of Port Operation (General Cargo)

Public sector Items Unit Convert

to USD Remarks

Tonnage charge 1,000DWT(Domestic） /ship 12 250VND/GT 20,000DWT(Domestic） /ship 239 250VND/GT 20,000DWT class /ship 719 0.0034USD/GT 30,000DWT class /ship 1,078 〃 Maritime safety charges 1,000DWT(Domestic） /ship 14 300VND/GT 20,000DWT(Domestic） /ship 287 〃 20,000DWT class /ship 2,114 0.1USD/GT 30,000DWT class /ship 3,171 〃 Pilot charge 1,000DWT(Domestic） /ship 0.96 40VND/GT/NM 20,000DWT(Domestic） /ship 19.16 40VND/GT/NM 20,000DWT class /ship 71.88 0.0034USD/GT/NM 30,000DWT class /ship 107.81 10NM Procedure charges 1,000DWT(Domestic） /ship 2 25,000VND/time 20,000DWT(Domestic） /ship 9 100,000VND/time 20,000DWT class /ship 100 50USD/time 30,000DWT class /ship 100 50USD/time Private sector

Items Unit Convert to USD Remarks

Loading and unloading charge /TEU 13.5

Storage charge /TEU 2.2 Wharf charges 1,000DWT(Domestic） /ship 4 35VND/GT-hour 20,000DWT(Domestic） /ship 161 35VND/GT-hour 20,000DWT class /ship 393 0.0031USD/GT-hour 30,000DWT class /ship 1,180 〃 Rope tying and untying

charges 1,000DWT(Domestic） /ship 20 220,000 VND/time 20,000DWT(Domestic） /ship 91 1,000,000 VND/time 20,000DWT class /ship 190 95USD/time 30,000DWT class /ship 190 〃 Fresh water charges 1,000DWT(Domestic） /ship 25 27860VND/m3 20,000DWT(Domestic） /ship 189 27860VND/m3 20,000DWT class /ship 375 2.5USD/m3 30,000DWT class /ship 375 2.5USD/m3 Opening and closing cargo

hold 1,000DWT(Domestic） /ship 0 20,000DWT(Domestic） /ship 11 1,400,000 VND/time 20,000DWT class /ship 39 65USD/time 30,000DWT class /ship 39 65USD/time Garbage disposal charges 1,000DWT(Domestic） /ship 7 150,000VND/time 20,000DWT(Domestic） /ship 7 150,000VND/time 20,000DWT class /ship 15 15USD/time 30,000DWT class /ship 15 〃

Source：Da Nang Port Joint Stock Company No.136/QD-CĐN, Ministry Of Finance No: 01/2016/TT-BTC

101

Prediction of Expenses (9)

Expenses for Initial Investment 1)

In case 1 and case 2, the public portion of the amount disbursed for initial investment is estimated at 119 million

USD while that of private portion is 142 million USD. In case 3, the public portion is estimated at 134 million

USD while the private portion is 219 million USD.

Maintenance Costs for Infrastructure and Renewal Investment 2)

The maintenance costs for infrastructure are assumed to be 1% of the initial investment expenses of depreciable

infrastructure. The maintenance costs for cargo handling equipment are assumed to be 3% of the initial investment

expenses.

The private sector will bear renewal expenses for cargo handling equipment, which will be renewed when its

useful life expires throughout the Project life. Individual use lives are assumed referring to actual operational

experiences: Fifteen (15) years for reach stacker, forklift and tractor/chassis, twenty (20) years for Rubber Tire

Mounted Gantry Cranes (RTG), and 25 years for Quayside Gantry Cranes.

Operation Cost 3)

Operation costs every year are classified into those which vary according to the container handling volume such

as fuel consumption or power etc. and those which are constant regardless of handling volumes such as salary for

indirect employee or maintenance of fixed asset and dredging etc. Unit costs for these operation items are shown

in Table 5-6.

Table 5-6 Operation Cost（Maximum handled volume/year）

Items 1,000USD

Remarks Case-1,2 Case-3

Fuel consumption 582 1,045 Power 1,748 3,183 Water 28 55 Salary for direct works 2,665 4,486 Social/ Health Insurance / Trade Union 362 610 Other costs 538 938 10% of subtotal of above 5 item

Maintenance for private infrastructures 526 795 1% of construction cost (excl.

soil improvement and reclamation)

Maintenance for public infrastructures 419 501

Maintenance for private cargo handling equipment 1,212 2,181 3% of machinery and equipment

Property Insurance 118 212 0.33% of cargo handling equipment

Maintenance Dredging 979 1,468 General administrative expenses 2,500 3,750 Water surface and land rental cost 166 228

Grand total 11,842 19,453 * The year of establishing SPC；500 thousand USD / year, During the construction period； 250 thousand USD / year


102

Result of Financial Analysis (10)

The results of the financial analysis are shown with efficiency index from Table 5-7~Table 5-9. The calculation

process of these indexes is shown from Table 5-10~ Table 5-12, and the respective evaluations are described

below.

Case-1 (maximum utilization of Tien Sa port /general cargo berth-1/container berth-1) 1)


NPV in the most unfavorable conditions (10% cost increase, 10% decrease in container growth rate) is USD

38.5 million and B / C is 1.09 and thus the project can be evaluated as executable.

- As for the possibility of project implementation by PPP, FIRR of the private sector has to be over 8.0%

which is equal to the interest rate of private banks. FIRR varies depending on the concession fee.

- If the concession fee is 0%, FIRR of private sector exceeds the target value even in the case of unfavorable

conditions, but FIRR of the public sector is under the target value.

- If the concession fee is 10%, opposite to the above, FIRR of the public sector exceeds the target value, but

FIRR of the private sector falls below the target value.

- If the concession fee is 6% to 7%, FIRR of both the public and private sector almost reaches the target value

but would still be considered to be unsatisfactory.

- From the above, although the project is evaluated as feasible in case-1, it is assumed that would be necessary

to carefully manage the construction cost, seek more advantageous financing, etc.

Case-2 (Early cargo shift from Tien Sa Port/general cargo berth-1/container berth-1) 2)


NPV in the most unfavorable conditions (10% cost increase, 10% decrease in container growth rate) is USD

88.2 million and B / C is 1.18, and thus the project can be evaluated as executable.


private sector and public sector exceeds the target value even in the case of unfavorable conditions.


Case-3 (Early cargo shift from Tien Sa Port/general cargo berth-1/container berth-2) 3)

- · For the entire project, FIRR exceeds WACC (5.2%) in all cases. This is more than government bonds

(5.2%). NPV in the most unfavorable conditions (10% cost increase, 10% decrease in container growth rate)

is USD 149.6 million and B / C is 1.23, and thus the project can be evaluated as executable.


private sector and public sector exceeds the target value even in the case of unfavorable conditions. The

calculated FIRR is the highest of all cases.

103


Table 5-7 Case-1 Result of Financial Analysis

Concession fee 0% Items Base Case Cost +10% Revenue-10

% Cost +10%

Revenue-10% Remarks

FIRR Overall 7.8% 6.7% 6.6% 5.6% >4.6% Private 12.2% 10.8% 10.6% 9.2% >8.0% Public -0.5% -1.0% -1.1% -1.6% >1.4%

NPV (1000USD)

Overall 130,134 90,822 77,809 38,497 Private 192,370 163,734 144,497 115,860 Public -62,236 -73,151 -66,927 -77,842

B/C Overall 1.33 1.21 1.20 1.09 Private 1.67 1.52 1.50 1.37 Public 0.43 0.39 0.39 0.35


% Cost +10%

Revenue-10% Remarks

FIRR Overall 7.8% 6.7% 6.6% 5.6% >4.6% Private 10.6% 9.1% 8.9% 7.3% >8.0% Public 3.7% 3.1% 3.0% 2.4% >1.4%

NPV (1000USD)




% Cost +10%

Revenue-10% Remarks


NPV (1000USD)

Overall 130,134 90,822 77,809 38,497 Private 96,623 58,412 48,750 10,538 Public 33,511 22,596 19,245 8,330



104



% Cost +10%

Revenue-10% Remarks

FIRR Overall 9.2% 8.0% 7.8% 6.6% >4.6% Private 14.6% 12.9% 12.7% 11.1% >8.0% Public 0.0% -0.5% -0.6% -1.1% >1.4%

NPV (1000USD)




% Cost +10%

Revenue-10% Remarks


NPV (1000USD)




% Cost +10%

Revenue-10% Remarks


NPV (1000USD)




105


Concession fee 0% Items Scope Base Case Cost +10% Revenue-10

% Cost +10%

Revenue-10% Remarks


NPV (1000USD)



Concession fee 10%

Items Scope Base Case Cost +10% Revenue-10%

Cost +10% Revenue-10% Remarks


NPV (1000USD)

Overall 296,925 238,128 208,435 149,638 Private 267,515 213,654 186,902 133,041 Public 29,410 16,072 13,131 -207


Concession fee 20%

Items Scope Base Case Cost +10% Revenue-10%

Cost +10% Revenue-10% Remarks


NPV (1000USD)




106

Table 5-10 Case-1 Financial Analysis Calculation sheets (Base Case)

Case-1 FIRRPraivate (1000USD)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 402019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 2050 2051 2052 2053 2054 2055 2056 2057 2058

Revenue 0 0 0 0 0 6,098 12,196 18,294 24,393 30,491 36,712 37,709 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707Port operation Revenue 38,707 6,098 12,196 18,294 24,393 30,491 36,712 37,709 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 Contaner Cargo 30,727 5,101 10,201 15,302 20,403 25,503 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 General Cargo 7,980 997 1,995 2,992 3,990 4,987 5,985 6,982 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980

Cost 0 1,388 20,860 30,722 50,328 45,516 7,942 10,432 13,862 14,472 15,094 15,194 15,294 15,294 15,294 15,294 15,294 15,294 15,294 15,294 18,834 15,294 15,294 15,294 15,294 23,432 15,294 15,294 15,294 15,294 44,010 15,294 15,294 15,294 15,294 15,294 15,294 15,294 15,294 15,294Construction 0 888 20,611 30,473 50,079 39,921 0 0 0 0 0 0 0 0 0 0 0 0 0 0 3,540 0 0 0 0 8,138 0 0 0 0 28,717 0 0 0 0 0 0 0 0 0Operation & Maintenance 11,257 0 500 250 250 250 4,818 6,556 8,436 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257Water surface rental 166 0 0 0 0 0 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166Concession fee 10.0% 610 1,220 1,829 2,439 3,049 3,671 3,771 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871

Balance 0 -1,388 -20,860 -30,722 -50,328 -39,417 4,254 7,862 10,530 16,019 21,618 22,515 23,413 23,413 23,413 23,413 23,413 23,413 23,413 23,413 19,873 23,413 23,413 23,413 23,413 15,275 23,413 23,413 23,413 23,413 -5,303 23,413 23,413 23,413 23,413 23,413 23,413 23,413 23,413 23,413FIRR= 10.6%Discount rate 4.6% 1.00 1.05 1.09 1.14 1.20 1.25 1.31 1.37 1.43 1.50 1.57 1.64 1.72 1.79 1.88 1.96 2.05 2.15 2.25 2.35 2.46 2.57 2.69 2.81 2.94 3.08 3.22 3.37 3.52 3.68 3.85 4.03 4.22 4.41 4.61 4.83 5.05 5.28 5.52 5.78Revenue 478,736 0 0 0 0 0 4,870 9,312 13,354 17,022 20,341 23,415 22,993 22,563 21,571 20,623 19,716 18,849 18,020 17,227 16,470 15,745 15,053 14,391 13,758 13,153 12,575 12,022 11,493 10,987 10,504 10,042 9,601 9,178 8,775 8,389 8,020 7,667 7,330 7,008 6,700Cost 334,239 0 1,327 19,066 26,845 42,042 36,350 6,064 7,615 9,673 9,655 9,627 9,264 8,915 8,523 8,148 7,790 7,447 7,120 6,807 6,507 7,661 5,948 5,686 5,436 5,197 7,612 4,750 4,541 4,341 4,150 11,418 3,793 3,627 3,467 3,315 3,169 3,029 2,896 2,769 2,647NPV 144,497 0 -1,327 -19,066 -26,845 -42,042 -31,480 3,248 5,739 7,348 10,687 13,788 13,729 13,648 13,048 12,474 11,926 11,401 10,900 10,420 9,962 8,084 9,105 8,705 8,322 7,956 4,962 7,272 6,952 6,646 6,354 -1,376 5,807 5,552 5,308 5,074 4,851 4,638 4,434 4,239 4,052B/C= 1.43

Public1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

2,019 2,020 2,021 2,022 2,023 2,024 2,025 2,026 2,027 2,028 2,029 2,030 2,031 2,032 2,033 2,034 2,035 2,036 2,037 2,038 2,039 2,040 2,041 2,042 2,043 2,044 2,045 2,046 2,047 2,048 2,049 2,050 2,051 2,052 2,053 2,054 2,055 2,056 2,057 2,058Revenue 0 0 0 0 0 1,358 2,550 3,742 4,934 6,126 7,344 7,477 7,611 7,611 7,611 7,611 7,611 7,611 7,611 7,611 7,611 7,611 7,611 7,611 7,611 7,611 7,611 7,611 7,611 7,611 7,611 7,611 7,611 7,611 7,611 7,611 7,611 7,611 7,611 7,611

Port operation Revenue 3,574 582 1,164 1,746 2,329 2,911 3,506 3,540 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 Contaner Cargo 3,302 548 1,096 1,645 2,193 2,741 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 General Cargo 272 34 68 102 136 170 204 238 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272Water surface rental 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166Concession fee 10% 610 1,220 1,829 2,439 3,049 3,671 3,771 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871

Cost 0 1,041 35,758 35,758 35,064 11,572 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419Construction 0 1,041 35,758 35,758 35,064 11,572 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Maintenance 0 0 0 0 0 0 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419

Balance 0 -1,041 -35,758 -35,758 -35,064 -10,214 2,132 3,324 4,516 5,708 6,925 7,059 7,192 7,192 7,192 7,192 7,192 7,192 7,192 7,192 7,192 7,192 7,192 7,192 7,192 7,192 7,192 7,192 7,192 7,192 7,192 7,192 7,192 7,192 7,192 7,192 7,192 7,192 7,192 7,192FIRR= 3.7%Discount rate 4.60% 1.00 1.05 1.09 1.14 1.20 1.25 1.31 1.37 1.43 1.50 1.57 1.64 1.72 1.79 1.88 1.96 2.05 2.15 2.25 2.35 2.46 2.57 2.69 2.81 2.94 3.08 3.22 3.37 3.52 3.68 3.85 4.03 4.22 4.41 4.61 4.83 5.05 5.28 5.52 5.78Revenue 94,786 0 0 0 0 0 1,085 1,947 2,732 3,443 4,087 4,684 4,559 4,437 4,242 4,055 3,877 3,706 3,543 3,387 3,238 3,096 2,960 2,830 2,705 2,586 2,473 2,364 2,260 2,161 2,065 1,975 1,888 1,805 1,725 1,650 1,577 1,508 1,441 1,378 1,317Cost 109,148 0 996 32,682 31,245 29,291 9,242 320 306 292 279 267 255 244 233 223 213 204 195 186 178 170 163 156 149 142 136 130 124 119 114 109 104 99 95 91 87 83 79 76 72NPV -14,363 0 -996 -32,682 -31,245 -29,291 -8,157 1,627 2,426 3,151 3,808 4,417 4,304 4,193 4,008 3,832 3,664 3,502 3,348 3,201 3,060 2,926 2,797 2,674 2,556 2,444 2,337 2,234 2,136 2,042 1,952 1,866 1,784 1,706 1,631 1,559 1,490 1,425 1,362 1,302 1,245B/C= 0.87

Overall1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

2,019 2,020 2,021 2,022 2,023 2,024 2,025 2,026 2,027 2,028 2,029 2,030 2,031 2,032 2,033 2,034 2,035 2,036 2,037 2,038 2,039 2,040 2,041 2,042 2,043 2,044 2,045 2,046 2,047 2,048 2,049 2,050 2,051 2,052 2,053 2,054 2,055 2,056 2,057 2,058Revenue 0 0 0 0 0 6,680 13,361 20,041 26,721 33,401 40,218 41,249 42,281 42,281 42,281 42,281 42,281 42,281 42,281 42,281 42,281 42,281 42,281 42,281 42,281 42,281 42,281 42,281 42,281 42,281 42,281 42,281 42,281 42,281 42,281 42,281 42,281 42,281 42,281 42,281

Private Port operation Revenue 38,707 0 0 0 0 0 6,098 12,196 18,294 24,393 30,491 36,712 37,709 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 Contaner Cargo 30,727 0 0 0 0 0 5,101 10,201 15,302 20,403 25,503 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 General Cargo 7,980 0 0 0 0 0 997 1,995 2,992 3,990 4,987 5,985 6,982 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980

Public Port operation Revenue 3,574 0 0 0 0 0 582 1,164 1,746 2,329 2,911 3,506 3,540 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 Contaner Cargo 3,302 0 0 0 0 0 548 1,096 1,645 2,193 2,741 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 General Cargo 272 0 0 0 0 0 34 68 102 136 170 204 238 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272

Cost 0 2,429 56,618 66,480 85,392 56,312 6,975 8,855 11,675 11,675 11,675 11,675 11,675 11,675 11,675 11,675 11,675 11,675 11,675 11,675 15,216 11,675 11,675 11,675 11,675 19,814 11,675 11,675 11,675 11,675 40,392 11,675 11,675 11,675 11,675 11,675 11,675 11,675 11,675 11,675Construction 0 1,929 56,369 66,231 85,142 51,493 0 0 0 0 0 0 0 0 0 0 0 0 0 0 3,540 0 0 0 0 8,138 0 0 0 0 28,717 0 0 0 0 0 0 0 0 0Operation & Maintenance 0 500 250 250 250 4,818 6,556 8,436 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257Maintenance 0 0 0 0 0 0 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419

Balance 0 -2,429 -56,618 -66,480 -85,392 -49,631 6,386 11,186 15,046 21,726 28,543 29,574 30,605 30,605 30,605 30,605 30,605 30,605 30,605 30,605 27,065 30,605 30,605 30,605 30,605 22,467 30,605 30,605 30,605 30,605 1,889 30,605 30,605 30,605 30,605 30,605 30,605 30,605 30,605 30,605FIRR= 7.8%Discount rate 4.6% 1.00 1.05 1.09 1.14 1.20 1.25 1.31 1.37 1.43 1.50 1.57 1.64 1.72 1.79 1.88 1.96 2.05 2.15 2.25 2.35 2.46 2.57 2.69 2.81 2.94 3.08 3.22 3.37 3.52 3.68 3.85 4.03 4.22 4.41 4.61 4.83 5.05 5.28 5.52 5.78Revenue 523,254 0 0 0 0 0 5,335 10,201 14,628 18,647 22,283 25,651 25,152 24,647 23,563 22,527 21,536 20,589 19,684 18,818 17,990 17,199 16,443 15,720 15,028 14,368 13,736 13,132 12,554 12,002 11,474 10,970 10,487 10,026 9,585 9,164 8,761 8,375 8,007 7,655 7,318Cost 393,119 0 2,322 51,748 58,089 71,333 44,972 5,325 6,464 8,147 7,789 7,446 7,119 6,806 6,507 6,220 5,947 5,685 5,435 5,196 4,968 6,190 4,540 4,341 4,150 3,967 6,437 3,626 3,467 3,314 3,168 10,480 2,896 2,769 2,647 2,530 2,419 2,313 2,211 2,114 2,021NPV 130,134 0 -2,322 -51,748 -58,089 -71,333 -39,637 4,875 8,165 10,499 14,494 18,204 18,033 17,841 17,056 16,306 15,589 14,904 14,248 13,622 13,023 11,010 11,902 11,379 10,879 10,400 7,299 9,505 9,087 8,688 8,306 490 7,591 7,257 6,938 6,633 6,341 6,063 5,796 5,541 5,297B/C= 1.33

107



1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 402019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 2050 2051 2052 2053 2054 2055 2056 2057 2058

Revenue 0 0 0 10,814 21,628 32,442 37,111 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707Port operation Revenue 38,707 10,814 21,628 32,442 37,111 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 Contaner Cargo 30,727 9,218 18,436 27,654 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 General Cargo 7,980 1,596 3,192 4,788 6,384 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980

Cost 20,815 30,722 50,920 46,579 10,766 14,667 15,134 15,294 15,294 15,294 15,294 15,294 15,294 15,294 15,294 15,294 15,294 15,294 18,834 15,294 15,294 15,294 15,294 22,374 15,294 15,294 15,294 15,294 44,010 15,294 15,294 15,294 15,294 15,294 15,294 15,294 15,294 15,294 15,294 15,294Construction 20,315 30,473 50,670 40,513 0 0 0 0 0 0 0 0 0 0 0 0 0 0 3,540 0 0 0 0 7,081 0 0 0 0 28,717 0 0 0 0 0 0 0 0 0 0 0Operation & Maintenance 11,257 500 250 250 4,818 8,436 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257Water surface rental 166 0 0 0 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166Concession fee 10.0% 1,081 2,163 3,244 3,711 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871

Balance -20,815 -30,722 -50,920 -35,765 10,863 17,775 21,977 23,413 23,413 23,413 23,413 23,413 23,413 23,413 23,413 23,413 23,413 23,413 19,873 23,413 23,413 23,413 23,413 16,332 23,413 23,413 23,413 23,413 -5,303 23,413 23,413 23,413 23,413 23,413 23,413 23,413 23,413 23,413 23,413 23,413FIRR= 12.7%Discount rate 4.6% 1.00 1.05 1.09 1.14 1.20 1.25 1.31 1.37 1.43 1.50 1.57 1.64 1.72 1.79 1.88 1.96 2.05 2.15 2.25 2.35 2.46 2.57 2.69 2.81 2.94 3.08 3.22 3.37 3.52 3.68 3.85 4.03 4.22 4.41 4.61 4.83 5.05 5.28 5.52 5.78Revenue 578,563 0 0 0 9,449 18,067 25,909 28,334 28,253 27,010 25,823 24,687 23,601 22,563 21,571 20,623 19,716 18,849 18,020 17,227 16,470 15,745 15,053 14,391 13,758 13,153 12,575 12,022 11,493 10,987 10,504 10,042 9,601 9,178 8,775 8,389 8,020 7,667 7,330 7,008 6,700Cost 378,227 20,815 29,371 46,540 40,700 8,993 11,714 11,555 11,163 10,672 10,203 9,754 9,325 8,915 8,523 8,148 7,790 7,447 7,120 8,382 6,507 6,221 5,948 5,686 7,953 5,197 4,968 4,750 4,541 12,493 4,150 3,968 3,793 3,627 3,467 3,315 3,169 3,029 2,896 2,769 2,647NPV 200,337 -20,815 -29,371 -46,540 -31,251 9,074 14,195 16,779 17,090 16,338 15,620 14,933 14,276 13,648 13,048 12,474 11,926 11,401 10,900 8,845 9,962 9,524 9,105 8,705 5,805 7,956 7,606 7,272 6,952 -1,505 6,354 6,074 5,807 5,552 5,308 5,074 4,851 4,638 4,434 4,239 4,052B/C= 1.53

Public1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

2,019 2,020 2,021 2,022 2,023 2,024 2,025 2,026 2,027 2,028 2,029 2,030 2,031 2,032 2,033 2,034 2,035 2,036 2,037 2,038 2,039 2,040 2,041 2,042 2,043 2,044 2,045 2,046 2,047 2,048 2,049 2,050 2,051 2,052 2,053 2,054 2,055 2,056 2,057 2,058Revenue 0 0 0 2,293 4,419 6,546 7,397 7,611 7,611 7,611 7,611 7,611 7,611 7,611 7,611 7,611 7,611 7,611 7,611 7,611 7,611 7,611 7,611 7,611 7,611 7,611 7,611 7,611 7,611 7,611 7,611 7,611 7,611 7,611 7,611 7,611 7,611 7,611 7,611 7,611

Port operation Revenue 3,574 1,045 2,090 3,135 3,520 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 Contaner Cargo 3,302 991 1,981 2,972 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 General Cargo 272 54 109 163 217 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272Water surface rental 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166 166Concession fee 10% 1,081 2,163 3,244 3,711 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871 3,871

Cost 35,758 35,758 35,758 11,919 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419Construction 35,758 35,758 35,758 11,919 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Maintenance 0 0 0 0 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419

Balance -35,758 -35,758 -35,758 -9,627 4,001 6,127 6,978 7,192 7,192 7,192 7,192 7,192 7,192 7,192 7,192 7,192 7,192 7,192 7,192 7,192 7,192 7,192 7,192 7,192 7,192 7,192 7,192 7,192 7,192 7,192 7,192 7,192 7,192 7,192 7,192 7,192 7,192 7,192 7,192 7,192FIRR= 4.3%Discount rate 4.60% 1.00 1.05 1.09 1.14 1.20 1.25 1.31 1.37 1.43 1.50 1.57 1.64 1.72 1.79 1.88 1.96 2.05 2.15 2.25 2.35 2.46 2.57 2.69 2.81 2.94 3.08 3.22 3.37 3.52 3.68 3.85 4.03 4.22 4.41 4.61 4.83 5.05 5.28 5.52 5.78Revenue 114,259 0 0 0 2,003 3,692 5,228 5,648 5,555 5,311 5,078 4,854 4,641 4,437 4,242 4,055 3,877 3,706 3,543 3,387 3,238 3,096 2,960 2,830 2,705 2,586 2,473 2,364 2,260 2,161 2,065 1,975 1,888 1,805 1,725 1,650 1,577 1,508 1,441 1,378 1,317Cost 119,418 35,758 34,185 32,682 10,415 350 334 320 306 292 279 267 255 244 233 223 213 204 195 186 178 170 163 156 149 142 136 130 124 119 114 109 104 99 95 91 87 83 79 76 72NPV -5,159 -35,758 -34,185 -32,682 -8,412 3,342 4,893 5,328 5,250 5,019 4,798 4,587 4,386 4,193 4,008 3,832 3,664 3,502 3,348 3,201 3,060 2,926 2,797 2,674 2,556 2,444 2,337 2,234 2,136 2,042 1,952 1,866 1,784 1,706 1,631 1,559 1,490 1,425 1,362 1,302 1,245B/C= 0.96

Overall1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

2,019 2,020 2,021 2,022 2,023 2,024 2,025 2,026 2,027 2,028 2,029 2,030 2,031 2,032 2,033 2,034 2,035 2,036 2,037 2,038 2,039 2,040 2,041 2,042 2,043 2,044 2,045 2,046 2,047 2,048 2,049 2,050 2,051 2,052 2,053 2,054 2,055 2,056 2,057 2,058Revenue 0 0 0 11,859 23,718 35,577 40,630 42,281 42,281 42,281 42,281 42,281 42,281 42,281 42,281 42,281 42,281 42,281 42,281 42,281 42,281 42,281 42,281 42,281 42,281 42,281 42,281 42,281 42,281 42,281 42,281 42,281 42,281 42,281 42,281 42,281 42,281 42,281 42,281 42,281

Private Port operation Revenue 38,707 0 0 0 10,814 21,628 32,442 37,111 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 38,707 Contaner Cargo 30,727 0 0 0 9,218 18,436 27,654 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 30,727 General Cargo 7,980 0 0 0 1,596 3,192 4,788 6,384 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980

Public Port operation Revenue 3,574 0 0 0 1,045 2,090 3,135 3,520 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 3,574 Contaner Cargo 3,302 0 0 0 991 1,981 2,972 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 3,302 General Cargo 272 0 0 0 54 109 163 217 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272

Cost 56,573 66,480 86,678 57,251 8,855 11,675 11,675 11,675 11,675 11,675 11,675 11,675 11,675 11,675 11,675 11,675 11,675 11,675 15,216 11,675 11,675 11,675 11,675 18,756 11,675 11,675 11,675 11,675 40,392 11,675 11,675 11,675 11,675 11,675 11,675 11,675 11,675 11,675 11,675 11,675Construction 56,073 66,231 86,428 52,432 0 0 0 0 0 0 0 0 0 0 0 0 0 0 3,540 0 0 0 0 7,081 0 0 0 0 28,717 0 0 0 0 0 0 0 0 0 0 0Operation & Maintenance 500 250 250 4,818 8,436 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257 11,257Maintenance 0 0 0 0 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419 419

Balance -56,573 -66,480 -86,678 -45,391 14,863 23,902 28,955 30,605 30,605 30,605 30,605 30,605 30,605 30,605 30,605 30,605 30,605 30,605 27,065 30,605 30,605 30,605 30,605 23,525 30,605 30,605 30,605 30,605 1,889 30,605 30,605 30,605 30,605 30,605 30,605 30,605 30,605 30,605 30,605 30,605FIRR= 9.2%Discount rate 4.6% 1.00 1.05 1.09 1.14 1.20 1.25 1.31 1.37 1.43 1.50 1.57 1.64 1.72 1.79 1.88 1.96 2.05 2.15 2.25 2.35 2.46 2.57 2.69 2.81 2.94 3.08 3.22 3.37 3.52 3.68 3.85 4.03 4.22 4.41 4.61 4.83 5.05 5.28 5.52 5.78Revenue 632,287 0 0 0 10,362 19,813 28,413 31,021 30,862 29,505 28,207 26,967 25,781 24,647 23,563 22,527 21,536 20,589 19,684 18,818 17,990 17,199 16,443 15,720 15,028 14,368 13,736 13,132 12,554 12,002 11,474 10,970 10,487 10,026 9,585 9,164 8,761 8,375 8,007 7,655 7,318Cost 437,109 56,573 63,557 79,222 50,025 7,397 9,324 8,914 8,522 8,147 7,789 7,446 7,119 6,806 6,507 6,220 5,947 5,685 5,435 6,772 4,968 4,749 4,540 4,341 6,667 3,967 3,793 3,626 3,467 11,466 3,168 3,029 2,896 2,769 2,647 2,530 2,419 2,313 2,211 2,114 2,021NPV 195,178 -56,573 -63,557 -79,222 -39,662 12,416 19,089 22,107 22,340 21,357 20,418 19,520 18,662 17,841 17,056 16,306 15,589 14,904 14,248 12,046 13,023 12,450 11,902 11,379 8,362 10,400 9,943 9,505 9,087 536 8,306 7,941 7,591 7,257 6,938 6,633 6,341 6,063 5,796 5,541 5,297B/C= 1.45

108



1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 402019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 2050 2051 2052 2053 2054 2055 2056 2057 2058

Revenue 0 0 0 9,892 19,784 29,676 39,567 49,459 57,755 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286Port operation Revenue 63,286 9,892 19,784 29,676 39,567 49,459 57,755 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 Contaner Cargo 55,306 8,296 16,592 24,888 33,184 41,480 49,776 55,306 55,306 55,306 55,306 55,306 55,306 55,306 55,306 55,306 55,306 55,306 55,306 55,306 55,306 55,306 55,306 55,306 55,306 55,306 55,306 55,306 55,306 55,306 55,306 55,306 55,306 55,306 55,306 55,306 55,306 55,306 General Cargo 7,980 1,596 3,192 4,788 6,384 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980

Cost 10,277 17,738 51,899 66,866 51,635 51,689 18,248 20,791 23,174 25,280 25,280 25,280 25,280 25,280 25,280 25,280 25,280 25,280 28,467 25,280 28,467 25,280 25,280 31,653 25,280 31,653 25,280 25,280 58,362 25,280 43,889 25,280 25,280 25,280 25,280 25,280 25,280 25,280 25,280 25,280Construction 9,777 17,487 51,648 60,776 42,472 36,876 0 0 0 0 0 0 0 0 0 0 0 0 3,186 0 3,186 0 0 6,373 0 6,373 0 0 33,081 0 18,608 0 0 0 0 0 0 0 0 0Operation & Maintenance 18,724 500 250 250 4,873 6,956 11,617 14,063 15,617 17,170 18,724 18,724 18,724 18,724 18,724 18,724 18,724 18,724 18,724 18,724 18,724 18,724 18,724 18,724 18,724 18,724 18,724 18,724 18,724 18,724 18,724 18,724 18,724 18,724 18,724 18,724 18,724 18,724 18,724 18,724 18,724Water surface rental 228 0 0 0 228 228 228 228 228 228 228 228 228 228 228 228 228 228 228 228 228 228 228 228 228 228 228 228 228 228 228 228 228 228 228 228 228 228 228 228 228Concession fee 10.0% 989 1,978 2,968 3,957 4,946 5,776 6,329 6,329 6,329 6,329 6,329 6,329 6,329 6,329 6,329 6,329 6,329 6,329 6,329 6,329 6,329 6,329 6,329 6,329 6,329 6,329 6,329 6,329 6,329 6,329 6,329 6,329 6,329 6,329 6,329 6,329 6,329

Balance -10,277 -17,738 -51,899 -56,974 -31,851 -22,013 21,319 28,669 34,581 38,005 38,005 38,005 38,005 38,005 38,005 38,005 38,005 38,005 34,819 38,005 34,819 38,005 38,005 31,633 38,005 31,633 38,005 38,005 4,924 38,005 19,397 38,005 38,005 38,005 38,005 38,005 38,005 38,005 38,005 38,005FIRR= 13.2%Discount rate 5.1% 1.00 1.05 1.10 1.16 1.22 1.28 1.35 1.42 1.49 1.56 1.64 1.73 1.82 1.91 2.01 2.11 2.22 2.33 2.45 2.57 2.70 2.84 2.99 3.14 3.30 3.47 3.64 3.83 4.03 4.23 4.45 4.67 4.91 5.16 5.43 5.70 5.99 6.30 6.62 6.96Revenue 806,130 0 0 0 8,521 16,214 23,141 29,358 34,916 38,794 40,447 38,484 36,617 34,840 33,149 31,541 30,010 28,554 27,168 25,850 24,595 23,402 22,266 21,186 20,158 19,180 18,249 17,363 16,521 15,719 14,956 14,231 13,540 12,883 12,258 11,663 11,097 10,559 10,046 9,559 9,095Cost 538,615 10,277 16,877 46,984 57,597 42,319 40,307 13,539 14,677 15,566 16,157 15,373 14,627 13,917 13,242 12,599 11,988 11,406 10,853 11,628 9,825 10,526 8,895 8,463 10,082 7,662 9,127 6,936 6,599 14,496 5,975 9,869 5,409 5,146 4,897 4,659 4,433 4,218 4,013 3,818 3,633NPV 267,515 -10,277 -16,877 -46,984 -49,076 -26,104 -17,166 15,818 20,239 23,229 24,290 23,111 21,990 20,923 19,907 18,941 18,022 17,148 16,315 14,222 14,770 12,875 13,372 12,723 10,076 11,518 9,122 10,427 9,921 1,223 8,982 4,362 8,131 7,737 7,361 7,004 6,664 6,341 6,033 5,740 5,462B/C= 1.50

Public1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

2,019 2,020 2,021 2,022 2,023 2,024 2,025 2,026 2,027 2,028 2,029 2,030 2,031 2,032 2,033 2,034 2,035 2,036 2,037 2,038 2,039 2,040 2,041 2,042 2,043 2,044 2,045 2,046 2,047 2,048 2,049 2,050 2,051 2,052 2,053 2,054 2,055 2,056 2,057 2,058Revenue 0 0 0 2,162 4,096 6,031 7,965 9,899 11,619 12,766 12,766 12,766 12,766 12,766 12,766 12,766 12,766 12,766 12,766 12,766 12,766 12,766 12,766 12,766 12,766 12,766 12,766 12,766 12,766 12,766 12,766 12,766 12,766 12,766 12,766 12,766 12,766 12,766 12,766 12,766

Port operation Revenue 6,209 945 1,890 2,835 3,780 4,725 5,616 6,209 6,209 6,209 6,209 6,209 6,209 6,209 6,209 6,209 6,209 6,209 6,209 6,209 6,209 6,209 6,209 6,209 6,209 6,209 6,209 6,209 6,209 6,209 6,209 6,209 6,209 6,209 6,209 6,209 6,209 6,209 Contaner Cargo 5,938 891 1,781 2,672 3,563 4,453 5,344 5,938 5,938 5,938 5,938 5,938 5,938 5,938 5,938 5,938 5,938 5,938 5,938 5,938 5,938 5,938 5,938 5,938 5,938 5,938 5,938 5,938 5,938 5,938 5,938 5,938 5,938 5,938 5,938 5,938 5,938 5,938 General Cargo 272 54 109 163 217 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272Water surface rental 228 228 228 228 228 228 228 228 228 228 228 228 228 228 228 228 228 228 228 228 228 228 228 228 228 228 228 228 228 228 228 228 228 228 228 228 228 228Concession fee 10% 989 1,978 2,968 3,957 4,946 5,776 6,329 6,329 6,329 6,329 6,329 6,329 6,329 6,329 6,329 6,329 6,329 6,329 6,329 6,329 6,329 6,329 6,329 6,329 6,329 6,329 6,329 6,329 6,329 6,329 6,329 6,329 6,329 6,329 6,329 6,329 6,329

Cost 40,188 40,188 39,798 13,786 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501Construction 40,188 40,188 39,798 13,786 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Maintenance 0 0 0 0 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501

Balance -40,188 -40,188 -39,798 -11,624 3,596 5,530 7,464 9,398 11,118 12,265 12,265 12,265 12,265 12,265 12,265 12,265 12,265 12,265 12,265 12,265 12,265 12,265 12,265 12,265 12,265 12,265 12,265 12,265 12,265 12,265 12,265 12,265 12,265 12,265 12,265 12,265 12,265 12,265 12,265 12,265FIRR= 6.5%Discount rate 5.10% 1.00 1.05 1.10 1.16 1.22 1.28 1.35 1.42 1.49 1.56 1.64 1.73 1.82 1.91 2.01 2.11 2.22 2.33 2.45 2.57 2.70 2.84 2.99 3.14 3.30 3.47 3.64 3.83 4.03 4.23 4.45 4.67 4.91 5.16 5.43 5.70 5.99 6.30 6.62 6.96Revenue 162,788 0 0 0 1,862 3,357 4,703 5,910 6,988 7,805 8,159 7,763 7,386 7,028 6,687 6,362 6,054 5,760 5,480 5,214 4,961 4,721 4,492 4,274 4,066 3,869 3,681 3,503 3,333 3,171 3,017 2,871 2,731 2,599 2,473 2,353 2,239 2,130 2,027 1,928 1,835Cost 133,378 40,188 38,238 36,029 11,875 410 391 372 354 336 320 305 290 276 262 250 237 226 215 205 195 185 176 168 160 152 144 137 131 124 118 113 107 102 97 92 88 84 80 76 72NPV 29,410 -40,188 -38,238 -36,029 -10,013 2,947 4,312 5,538 6,635 7,468 7,839 7,458 7,096 6,752 6,424 6,113 5,816 5,534 5,265 5,010 4,767 4,535 4,315 4,106 3,907 3,717 3,537 3,365 3,202 3,046 2,899 2,758 2,624 2,497 2,376 2,260 2,151 2,046 1,947 1,853 1,763B/C= 1.22

Overall1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

2,019 2,020 2,021 2,022 2,023 2,024 2,025 2,026 2,027 2,028 2,029 2,030 2,031 2,032 2,033 2,034 2,035 2,036 2,037 2,038 2,039 2,040 2,041 2,042 2,043 2,044 2,045 2,046 2,047 2,048 2,049 2,050 2,051 2,052 2,053 2,054 2,055 2,056 2,057 2,058Revenue 0 0 0 10,837 21,674 32,511 43,347 54,184 63,371 69,495 69,495 69,495 69,495 69,495 69,495 69,495 69,495 69,495 69,495 69,495 69,495 69,495 69,495 69,495 69,495 69,495 69,495 69,495 69,495 69,495 69,495 69,495 69,495 69,495 69,495 69,495 69,495 69,495 69,495 69,495

Private Port operation Revenue 63,286 0 0 0 9,892 19,784 29,676 39,567 49,459 57,755 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 63,286 Contaner Cargo 55,306 0 0 0 8,296 16,592 24,888 33,184 41,480 49,776 55,306 55,306 55,306 55,306 55,306 55,306 55,306 55,306 55,306 55,306 55,306 55,306 55,306 55,306 55,306 55,306 55,306 55,306 55,306 55,306 55,306 55,306 55,306 55,306 55,306 55,306 55,306 55,306 55,306 55,306 55,306 General Cargo 7,980 0 0 0 1,596 3,192 4,788 6,384 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980 7,980

Public Port operation Revenue 6,209 0 0 0 945 1,890 2,835 3,780 4,725 5,616 6,209 6,209 6,209 6,209 6,209 6,209 6,209 6,209 6,209 6,209 6,209 6,209 6,209 6,209 6,209 6,209 6,209 6,209 6,209 6,209 6,209 6,209 6,209 6,209 6,209 6,209 6,209 6,209 6,209 6,209 6,209 Contaner Cargo 5,938 0 0 0 891 1,781 2,672 3,563 4,453 5,344 5,938 5,938 5,938 5,938 5,938 5,938 5,938 5,938 5,938 5,938 5,938 5,938 5,938 5,938 5,938 5,938 5,938 5,938 5,938 5,938 5,938 5,938 5,938 5,938 5,938 5,938 5,938 5,938 5,938 5,938 5,938 General Cargo 272 0 0 0 54 109 163 217 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272 272

Cost 50,465 57,926 91,697 79,435 49,929 48,994 14,564 16,118 17,671 19,225 19,225 19,225 19,225 19,225 19,225 19,225 19,225 19,225 22,411 19,225 22,411 19,225 19,225 25,597 19,225 25,597 19,225 19,225 52,306 19,225 37,833 19,225 19,225 19,225 19,225 19,225 19,225 19,225 19,225 19,225Construction 49,965 57,675 91,446 74,562 42,472 36,876 0 0 0 0 0 0 0 0 0 0 0 0 3,186 0 3,186 0 0 6,373 0 6,373 0 0 33,081 0 18,608 0 0 0 0 0 0 0 0 0Operation & Maintenance 500 250 250 4,873 6,956 11,617 14,063 15,617 17,170 18,724 18,724 18,724 18,724 18,724 18,724 18,724 18,724 18,724 18,724 18,724 18,724 18,724 18,724 18,724 18,724 18,724 18,724 18,724 18,724 18,724 18,724 18,724 18,724 18,724 18,724 18,724 18,724 18,724 18,724 18,724Maintenance 0 0 0 0 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501 501

Balance -50,465 -57,926 -91,697 -68,599 -28,256 -16,483 28,783 38,067 45,700 50,271 50,271 50,271 50,271 50,271 50,271 50,271 50,271 50,271 47,084 50,271 47,084 50,271 50,271 43,898 50,271 43,898 50,271 50,271 17,189 50,271 31,662 50,271 50,271 50,271 50,271 50,271 50,271 50,271 50,271 50,271FIRR= 10.4%Discount rate 5.1% 1.00 1.05 1.10 1.16 1.22 1.28 1.35 1.42 1.49 1.56 1.64 1.73 1.82 1.91 2.01 2.11 2.22 2.33 2.45 2.57 2.70 2.84 2.99 3.14 3.30 3.47 3.64 3.83 4.03 4.23 4.45 4.67 4.91 5.16 5.43 5.70 5.99 6.30 6.62 6.96Revenue 884,900 0 0 0 9,335 17,763 25,352 32,162 38,252 42,567 44,415 42,260 40,209 38,258 36,402 34,635 32,954 31,355 29,834 28,386 27,009 25,698 24,451 23,265 22,136 21,062 20,040 19,067 18,142 17,262 16,424 15,627 14,869 14,147 13,461 12,807 12,186 11,595 11,032 10,497 9,987Cost 587,975 50,465 55,115 83,014 68,424 40,921 38,206 10,806 11,378 11,870 12,287 11,690 11,123 10,583 10,070 9,581 9,116 8,674 8,253 9,154 7,471 8,287 6,764 6,436 8,153 5,826 7,381 5,275 5,019 12,992 4,543 8,507 4,113 3,914 3,724 3,543 3,371 3,207 3,052 2,904 2,763NPV 296,925 -50,465 -55,115 -83,014 -59,089 -23,158 -12,854 21,356 26,874 30,697 32,128 30,569 29,086 27,675 26,332 25,054 23,838 22,681 21,581 19,232 19,537 17,411 17,687 16,829 13,982 15,235 12,658 13,793 13,123 4,270 11,881 7,120 10,755 10,234 9,737 9,264 8,815 8,387 7,980 7,593 7,225B/C= 1.50

109

Economic Analysis 2.2

Methodology of Economic Analysis (1)

The economic analysis carried out to examine the economic benefits as well as economic costs arising from the

Project, and to evaluate whether the benefits of the Project exceed those that could be obtained from other

investment opportunities in Vietnam.

In the economic analysis, the development plan, referred to as the “With” case, is compared to the “Without” case.

All of the benefits and cost differences between the “With” case and “Without” case will be calculated in market

price, then they will be converted to economic price.

In this Study, EIRR method as well as NPV and B/C Ratio is used to evaluate and appraise the economic

feasibility of the Project. Sensitivity analysis is also conducted.

Prerequisites for Economic Analysis (2)

Base Year 1)

In the financial analysis, the year 2016 is adopted as the “Base Year” since the market survey was conducted for

the estimation of construction costs in this year.

Project Life 2)

It is assumed that engineering services for the Project will commence in 2019, and a total of 40 years is adopted as

the “Project Life”.

Foreign Currency Exchange Rate 3)

The following foreign exchange rates are adopted in the financial analysis:

VND 1.0 = ¥ 0.004628, US$1.00 = VND 22,067 as of September 2016.

Economic Price 4)

In the economic analysis, all prices must be expressed as economic prices. In general, the operation costs, the

construction costs, and the maintenance costs are estimated at market prices. To convert market prices to

economic prices, a standard conversion factor of 0.85 is used. The formula is as follows:

Where:

X: total net export value

M: total net import value

Tx: Net export tax

Tm: Net import tax

110

SCF in this report is 0.85.

Value Added Tax (VAT) 5)

VAT has to be excluded in the economic analysis. Transfer items such as VAT that are included in the Project

expenses and revenues in the financial analysis have to be removed in the economic analysis.

Setting of “With” Case and “Without” Case (3)

In the "With case", 3 cases are set for each scenario.

In "Case-1," the existing container terminal of Tien Sa Port is effectively utilized even after construction of Lien

Chieu Port. In "Case - 2" and "Case – 3," that cargo is shifted from the existing Tien Sa port soon after

construction of Lien Chieu Port.

Regarding the scope of the project, in "Case - 1" and "Case - 2", a new container terminal and a general cargo

terminal will be constructed (each with 1 berth) at Lien Chieu Port, and the container cargo handling capacity will

500,000 TEU / year (max) while the general cargo handling capacity will be 2 million tons / year (max). In

"case-3", a new container terminal with 2 berths will constructed; to the container cargo handling capacity will be

900,000TEU/ year (max) and general cargo handling capacity will be 2 million tons / year (max).

In "Case – 1," the maximum handling volume at Tien Sa Port is set at 12 million tons, the same as indicated in the

master plan. In "Case-2" and "Case 3", the maximum volume is set at 10 million tons rebased on the road traffic

capacity.

In the "Without case", it is assumed that the container cargo would be handled at Quy Nhon port which is ranked

as a Class 1 local gateway port. It is assumed that general cargo would continue to be handled at Tian Sa port as at

present.

Table 5-13 Cases for each scenario

Items Container Terminal General Cargo Terminal

Berth length

Operation start year

Max Cargo Volume

Berth length

Operation start year

Max Cargo Volume

Case-1 Effective utilization of Tien Sa Port

380m (1Berth)

2024 500,000TEU 330m


Case-2 Early cargo shift from Tien Sa Port

380m (1Berth)

2022 500,000TEU 330m


Case-3 Early cargo shift from Tien Sa Port

710m (2Berth)

2022 2025

900,000TEU

Calculation of EIRR (4)

EIRR based on a cost-benefit analysis is used to appraise the economic feasibility of the Project. The EIRR is the

discount rate that makes the costs and benefits of a project during the Project life equal. The formula is as follows:

111

Where, n : Period of economic calculation (project life)

i : Year

Bi : Benefits in the i-th year

Ci : Costs in the i-th year

R : Discount rate

Sensitivity Analysis (5)

Sensitivity analysis is performed for the following three (3) cases in this Study:

-Case I : Increase in projected costs by 10%

-Case II : Decrease in projected benefits by 10%

-Case III : Combination of Cases I and II

Net Present Value（NPV） (6)

Costs and Benefits generated each year during the Project life are converted to the present value by applying a

Social Discount Rate (SDR). SDR in this report is 5.2%.

Cost of the Project (7)

The project cost consists of initial investments cost, port operating cost, maintenance cost, and renewal cost, the

same as in the financial analysis.

Benefits of the Project (8)

The economic benefits created from this project are reduced cargo transportation costs and transportation time by

avoiding the use of alternative ports, reduction of transportation cost by enlargement vessels, reduction of offshore

waiting of vessels, reduction of transportation time, expansion of employment and income by port related

industries, increase in employment and income due to construction work, stability and development of regional

industry, etc.

Among these benefits, land transport cost reduction effect by avoiding use of alternative ports was used in the

EIRR analysis of project benefits as it possible to quantify this benefit.

The effect of reduction of transportation cost by enlargement of vessels was excluded since there is already a plan

to expand Tien Sa Port in order to accommodate larger vessels.

Regarding the port revenue, although port income at Lien Chiu Port would increase due to an increase in cargo,

income from other Vietnamese ports would decrease. For this reason, in calculating the benefits to the entire

Vietnamese economy, increase in port revenues was not included.

112

Calculation of Benefits (9)

Reduction of land transportation costs 1)

For container cargo, it is assumed that land transport will be made to Quy Nhon Port if Lien Chiu Port is not

developed. Land transportation expenses were calculated based on the trucking fee (0.66 USD / Km / 20 ft

container) obtained by the hearing survey to Da Nang based carriers. The road distance between Da Nang Port

and Quy Nhon Port is 300 km, and the transport cost is assumed to be 198 USD / TEU.

Result of economic analysis (10)

The results of the economic analysis are shown in Table 5-14~Table 5-16. The calculation sheets are shown in

Table 5-17.

EIRR is 11.4% even in "case-1", which is the most disadvantageous condition. It exceeds the level of government

bonds (5.2%) and is evaluated as being superior to other investment opportunities in Vietnam.

Likewise, NPV was calculated to be 274 million dollars and the cost benefit ratio was calculated to be 1.77.

Even after the sensitivity analysis (Increase in projected costs by 10%, Decrease in projected benefits by 10%),

the EIRRs of all cases are higher than target level. This means that the planned Projects are economically feasible.

Table 5-14 Case1 Result of economic analysis （Effective utilization of Tien Sa Port/ General Berth×1/Container Berth×1）

Items Base case Cost+10% Revenue-10% Cost+10% Revenue-10%

EIRR 11.2% 10.0% 10.1% 8.9%

NPV (1000USD) 265,063 202,149 228,655 165,740

B/C 1.73 1.56 1.57 1.41

Table 5-15 Case2 Result of economic analysis （Early cargo shift from Tien Sa Port / General Berth×1/Container Berth×1）


EIRR 14.7% 13.0% 13.1% 11.6%

NPV (1000USD) 402,955 321,859 362,154 281,058

B/C 1.99 1.79 1.81 1.63

Table 5-16 Case2 Result of economic analysis （Early cargo shift from Tien Sa Port / General Berth×1/Container Berth×2）


EIRR 16.6% 14.9% 15.0% 13.4%

NPV (1000USD) 726,543 597,068 669,723 540,248

B/C 2.28 2.05 2.07 1.86


113

Table 5-17 Calculation sheets (Base Case)

Case-1 (1000USD)1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 2050 2051 2052 2053 2054 2055 2056 2057 2058Benefit 0 0 0 0 0 9,313 18,625 27,938 37,250 46,563 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,255

Reduction of land transportation costs 9,313 18,625 27,938 37,250 46,563 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100Cost 0 2,601 59,697 74,937 89,094 59,127 5,929 7,527 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 12,660 9,924 9,924 9,924 9,924 16,213 9,924 9,924 9,924 9,924 32,114 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924

Construction 0 2,176 59,484 74,725 88,882 55,031 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2,736 0 0 0 0 6,289 0 0 0 0 22,190 0 0 0 0 0 0 0 0 0Operation & maintenance　Cost 0 425 212 212 212 4,096 5,929 7,527 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924

Balance 0 -2,601 -59,697 -74,937 -89,094 -49,814 12,697 20,411 27,326 36,639 46,176 46,176 46,176 46,176 46,176 46,176 46,176 46,176 46,176 46,176 43,440 46,176 46,176 46,176 46,176 39,887 46,176 46,176 46,176 46,176 23,986 46,176 46,176 46,176 46,176 46,176 46,176 46,176 46,176 46,331EIRR= 11.2%Discount rate 5.2% 1.00 1.05 1.11 1.16 1.22 1.29 1.36 1.43 1.50 1.58 1.66 1.75 1.84 1.93 2.03 2.14 2.25 2.37 2.49 2.62 2.76 2.90 3.05 3.21 3.38 3.55 3.74 3.93 4.13 4.35 4.58 4.81 5.06 5.33 5.60 5.90 6.20 6.53 6.86 7.22Benefit 629,145 0 0 0 0 0 7,228 13,741 19,592 24,832 29,505 33,791 32,121 30,533 29,024 27,589 26,226 24,929 23,697 22,526 21,412 20,354 19,348 18,391 17,482 16,618 15,797 15,016 14,274 13,568 12,898 12,260 11,654 11,078 10,530 10,010 9,515 9,045 8,598 8,173 7,790Cost 364,082 0 2,473 53,941 64,365 72,742 45,889 4,374 5,278 6,615 6,288 5,978 5,682 5,401 5,134 4,881 4,639 4,410 4,192 3,985 3,788 4,593 3,423 3,253 3,093 2,940 4,565 2,656 2,525 2,400 2,282 7,018 2,062 1,960 1,863 1,771 1,683 1,600 1,521 1,446 1,374NPV 265,063 0 -2,473 -53,941 -64,365 -72,742 -38,661 9,367 14,314 18,216 23,217 27,814 26,439 25,132 23,890 22,709 21,586 20,519 19,505 18,541 17,625 15,761 15,925 15,138 14,390 13,679 11,232 12,360 11,749 11,168 10,616 5,242 9,592 9,118 8,668 8,239 7,832 7,445 7,077 6,727 6,416B/C= 1.73

Case-21 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

2,019 2,020 2,021 2,022 2,023 2,024 2,025 2,026 2,027 2,028 2,029 2,030 2,031 2,032 2,033 2,034 2,035 2,036 2,037 2,038 2,039 2,040 2,041 2,042 2,043 2,044 2,045 2,046 2,047 2,048 2,049 2,050 2,051 2,052 2,053 2,054 2,055 2,056 2,057 2,058Benefit 0 0 0 33,660 67,320 50,490 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100

Reduction of land transportation costs 16,830 33,660 50,490 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100 56,100Cost 59,452 74,937 90,545 60,309 7,527 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 12,660 9,924 9,924 9,924 9,924 15,396 9,924 9,924 9,924 9,924 32,114 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924

Construction 59,027 74,725 90,333 56,214 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2,736 0 0 0 0 5,472 0 0 0 0 22,190 0 0 0 0 0 0 0 0 0 0 0Operation & maintenance　Cost 425 212 212 4,096 7,527 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924 9,924

Balance -59,452 -74,937 -90,545 -26,649 59,793 40,566 46,176 46,176 46,176 46,176 46,176 46,176 46,176 46,176 46,176 46,176 46,176 46,176 43,440 46,176 46,176 46,176 46,176 40,704 46,176 46,176 46,176 46,176 23,986 46,176 46,176 46,176 46,176 46,176 46,176 46,176 46,176 46,176 46,176 46,176EIRR= 14.7%Discount rate 5.20% 1.00 1.05 1.11 1.16 1.22 1.29 1.36 1.43 1.50 1.58 1.66 1.75 1.84 1.93 2.03 2.14 2.25 2.37 2.49 2.62 2.76 2.90 3.05 3.21 3.38 3.55 3.74 3.93 4.13 4.35 4.58 4.81 5.06 5.33 5.60 5.90 6.20 6.53 6.86 7.22Benefit 810,962 0 0 0 28,911 54,964 39,186 41,387 39,342 37,397 35,548 33,791 32,121 30,533 29,024 27,589 26,226 24,929 23,697 22,526 21,412 20,354 19,348 18,391 17,482 16,618 15,797 15,016 14,274 13,568 12,898 12,260 11,654 11,078 10,530 10,010 9,515 9,045 8,598 8,173 7,769Cost 408,008 59,452 71,233 81,815 51,801 6,145 7,702 7,321 6,959 6,615 6,288 5,978 5,682 5,401 5,134 4,881 4,639 4,410 4,192 5,083 3,788 3,601 3,423 3,253 4,798 2,940 2,794 2,656 2,525 7,767 2,282 2,169 2,062 1,960 1,863 1,771 1,683 1,600 1,521 1,446 1,374NPV 402,955 -59,452 -71,233 -81,815 -22,890 48,819 31,484 34,066 32,382 30,782 29,260 27,814 26,439 25,132 23,890 22,709 21,586 20,519 19,505 17,443 17,625 16,753 15,925 15,138 12,685 13,679 13,002 12,360 11,749 5,801 10,616 10,091 9,592 9,118 8,668 8,239 7,832 7,445 7,077 6,727 6,394B/C= 1.99

Case-31 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

2,019 2,020 2,021 2,022 2,023 2,024 2,025 2,026 2,027 2,028 2,029 2,030 2,031 2,032 2,033 2,034 2,035 2,036 2,037 2,038 2,039 2,040 2,041 2,042 2,043 2,044 2,045 2,046 2,047 2,048 2,049 2,050 2,051 2,052 2,053 2,054 2,055 2,056 2,057 2,058Benefit 0 0 0 30,294 60,588 45,441 60,588 75,735 90,882 100,980 100,980 100,980 100,980 100,980 100,980 100,980 100,980 100,980 100,980 100,980 100,980 100,980 100,980 100,980 100,980 100,980 100,980 100,980 100,980 100,980 100,980 100,980 100,980 100,980 100,980 100,980 100,980 100,980 100,980 100,980

Reduction of land transportation costs 15,147 30,294 45,441 60,588 75,735 90,882 100,980 100,980 100,980 100,980 100,980 100,980 100,980 100,980 100,980 100,980 100,980 100,980 100,980 100,980 100,980 100,980 100,980 100,980 100,980 100,980 100,980 100,980 100,980 100,980 100,980 100,980 100,980 100,980 100,980 100,980 100,980

Cost 46,589 58,293 96,740 94,675 57,931 53,244 12,379 13,700 15,020 16,341 16,341 16,341 16,341 16,341 16,341 16,341 16,341 16,341 18,803 16,341 18,803 16,341 16,341 21,265 16,341 21,265 16,341 16,341 41,904 16,341 30,720 16,341 16,341 16,341 16,341 16,341 16,341 16,341 16,341 16,341Construction 46,164 58,080 96,527 90,533 51,592 42,944 0 0 0 0 0 0 0 0 0 0 0 0 2,462 0 2,462 0 0 4,924 0 4,924 0 0 25,563 0 14,379 0 0 0 0 0 0 0 0 0Operation & maintenance　Cost 425 213 213 4,142 6,339 10,300 12,379 13,700 15,020 16,341 16,341 16,341 16,341 16,341 16,341 16,341 16,341 16,341 16,341 16,341 16,341 16,341 16,341 16,341 16,341 16,341 16,341 16,341 16,341 16,341 16,341 16,341 16,341 16,341 16,341 16,341 16,341 16,341 16,341 16,341

Balance -46,589 -58,293 -96,740 -64,381 2,657 -7,803 48,209 62,035 75,862 84,639 84,639 84,639 84,639 84,639 84,639 84,639 84,639 84,639 82,177 84,639 82,177 84,639 84,639 79,715 84,639 79,715 84,639 84,639 59,076 84,639 70,260 84,639 84,639 84,639 84,639 84,639 84,639 84,639 84,639 84,639EIRR= 16.5%Discount rate 5.2% 1.00 1.05 1.11 1.16 1.22 1.29 1.36 1.43 1.50 1.58 1.66 1.75 1.84 1.93 2.03 2.14 2.25 2.37 2.49 2.62 2.76 2.90 3.05 3.21 3.38 3.55 3.74 3.93 4.13 4.35 4.58 4.81 5.06 5.33 5.60 5.90 6.20 6.53 6.86 7.22Benefit 1,294,743 0 0 0 26,020 49,468 35,267 44,698 53,111 60,583 63,987 60,824 57,818 54,960 52,243 49,661 47,206 44,873 42,655 40,546 38,542 36,637 34,826 33,105 31,468 29,913 28,434 27,029 25,693 24,423 23,216 22,068 20,977 19,940 18,955 18,018 17,127 16,281 15,476 14,711 13,984Cost 568,200 46,589 55,412 87,412 81,318 47,298 41,323 9,133 9,607 10,013 10,355 9,843 9,356 8,894 8,454 8,036 7,639 7,261 6,903 7,550 6,237 6,822 5,636 5,357 6,627 4,841 5,988 4,374 4,158 10,135 3,757 6,714 3,395 3,227 3,067 2,916 2,772 2,635 2,504 2,381 2,263NPV 726,543 -46,589 -55,412 -87,412 -55,298 2,169 -6,056 35,566 43,504 50,570 53,633 50,982 48,462 46,066 43,789 41,625 39,567 37,611 35,752 32,996 32,305 29,815 29,190 27,748 24,841 25,072 22,446 22,655 21,535 14,288 19,459 15,354 17,583 16,713 15,887 15,102 14,356 13,646 12,971 12,330 11,721B/C= 2.28

114

Chapter 6 Planned Project Schedule Study is made of a project implementation schedule on the basis of the volume of container cargo and general

cargo as shown in Chapter 3 4.1 Demand forecast, the capacity of the existing terminals in Da Nang Port and the

upper limit in the cargo handling volume of Tien Sa port area. The study was made for each assumed project

owner shown in Table 3-2 (in terms of concept on the upper limit in the cargo handling volume at Tien Sa port

area), and was concluded that in case MOT becomes the project owner and the upper limit of cargo handling

volume at Tien Sa is 12 million tons a year, it is necessary that the port becomes operational in 2024, and in case

Da Nang City People’s Committee becomes the project owner and the upper limit of cargo handling volume at

Tien Sa is 10 million tons a year, then the year in which the port needs to be in operation is 2022.

The details are as follows:

1. Opening time of Lien Chieu port area

The opening time of Lien Chieu port area is studied on the basis of the result of the demand forecast of container

cargo and general cargo volume adopted as Case 2 in Chapter 3 4.1 Demand forecast, and the project

implementation policies of the assumed project owners indicated in Table 3-2. The following is the reproduction

of Table 3-2:

Table 6-1 Differences in project implementation policy between assumed project owners (Reproduction of Table 3-2.)





The upper limit will be 12 million tons/year: the cargo handling capacity after the completion of Phase II Improvement Project being underway at Tien Sa.

Upon operation start-up of Lien Chieu port area, handling of general cargo shall be preferentially shifted from Tien Sa to Lien Chieu. For the time being Tien Sa shall continue to handle certain volume of containers while attending large-size cruise ships.


The upper limit will be 10 million tons/year: a smaller figure than the above due to consideration of the existing port road capacity and the mitigation of traffic congestion occurring in the proximity of the surrounding sightseeing areas.

From the startup of Lien Chieu port operation, handling of general cargo and containers shall be successively shifted from Tien Sa to Lien Chieu, which in the future shall exclusively serve as a tourist port to accommodate large cruise ships.

Table 6-2 shows the total cargo handling demand of Da Nang Port expressed in tonnage, which includes the

demand for container cargo with its unit expressed in tonnage instead of TEU (by using the conversion rate of 12

t/TEU), demand which was obtained from the demand forecast of Da Nang Port. Taking into account the upper

limit in the cargo handling at Tien Sa shown in Table 6-1, as well as that the demand is expected to exceed the

limit of 10 million tons in 2022 and 12 million tons in 2024, it is necessary to put Lien Chieu port area operational

by the said year(s).

115

Table 6-2 Estimated demand of Da Nang Port (tons)

2016 2017 2018 2019 2020 2021 2022 2023Container Handling Volume (TEU) 291,714 329,833 372,933 421,665 476,765 531,044 590,392 655,141General Cargo Volume (ton) 3,011,146 3,085,483 3,161,655 3,239,707 3,319,686 3,401,640 3,485,617 3,571,667Container Handking Volume (ton)Note: TEU*12t/TEU

3,500,564 3,957,993 4,475,195 5,059,982 5,721,185 6,372,524 7,084,710 7,861,696

Total (ton) 6,511,709 7,043,475 7,636,850 8,299,689 9,040,872 9,774,164 10,570,327 11,433,364

2024 2025 2026 2027 2028 2029 2030Container Handling Volume (TEU) 725,623 802,173 885,123 974,803 1,071,534 1,175,627 1,287,377General Cargo Volume (ton) 3,659,842 3,750,193 3,842,775 3,937,643 4,034,852 4,134,461 4,236,530Container Handking Volume (ton)Note: TEU*12t/TEU

8,707,481 9,626,077 10,621,482 11,697,642 12,858,414 14,107,523 15,448,519

Total (ton) 12,367,323 13,376,270 14,464,257 15,635,285 16,893,266 18,241,984 19,685,049

116

2. Phased construction plan for Lien Chieu port area

Taking into account the result of demand forecast, cargo handling capacities of respective existing terminals in Da

Nang Port, cargo handling capacity of Lien Chieu port area, and the division of functions between Tien Sa and

Lien Chieu shown in Table 6-1, a phased construction plan is studied for Lien Chieu port area.

Case scenario in which MOT becomes the project owner. 2.1

Phased construction plan of container terminal (1)

The result of the study of the conceptual cargo handling capacity of the container terminal and its phased

construction plan is as follows:

Table 6-3 Conceptual cargo handling capacity of the container terminal

(Mt in the table below stands for million tons.) Item Conceptual cargo handling capacity

Upper limit of cargo handling at Tien Sa port area 12 Mt in total (Calculation: containers 656,000 TEU + general cargo 3,572,000 tons = ca. 12 Mt = assumed cargo volume in 2023)

Container handling capacity at Tien Sa port area (Phase I & II)

Set at 463,000 TEU being the median value of cargo volume of 5.0-6.1 Mt in 2020 at Tien Sa stated in the Port Development Master Plan 2020-2030 (conversion rate: 12t/TEU)

Container handling capacity at Tien Sa port area (Phase I & II + introduction of latest cargo handling equipment and technology)


Berth 1 capacity of Lien Chieu port area Set at 500,000 TEU derived from Table 3-28.

Berth 2 capacity of Lien Chieu port area Set at 400,000 TEU derived from Table 3-28 and Table 3-29.

※As regards the Port Development Master Plan 2020-2030, refer to Table 3-1.

Figure 6-1 Phased construction plan of container terminal

0

500

1,000

1,500

2,000

2,500

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

TEU

(000

)

ActualHandling Volume of Tien Sa PortHandling Volume of Lien Chieu PortDemand Forecast (METI Study-Case 2)Capacity of Tien Sa PortCapacity of Lien Chieu Port

463,000TEU (Capacity of Tien Sa Phase 1 & 2)

667,000TEU (Capacity of Tien Sa Phase 2 + modernization)

1,156,000TEU (Capacity of Lien Chieu 1st Berth)

1,556,000TEU (Capacity of Lien Chieu 2nd Berth)

656,000TEU (+3,572,000ton =approx.12million ton)

117

Phased construction plan of general cargo terminal (2)

The result of the study of the conceptual cargo handling capacity of the general cargo terminal and its phased


Table 6-4 Conceptual cargo handling capacity of general cargo terminal

Item Conceptual cargo handling capacity Upper limit of cargo handling at Tien Sa port area

12 Mt in total (Calculation: general cargo 3,572,000 tons + containers 656,000 TEU = ca. 12 Mt = assumed cargo volume in 2023)

General cargo handling capacity at Tien Sa port area

Set at 2.85 Mt being the median value of cargo volume of 2.7-3.0 Mt in 2030 at Tien Sa stated in the Port Development Master Plan 2020-2030

Tho Quang port area Phase I Set at 1.1 Mt being the median value of cargo volume of 0.9-1.3 Mt in 2020 at Tho Quang stated in the Port Development Master Plan 2020-2030

Berth 1 capacity of Lien Chieu port area Set at 2 Mt derived from the Pre-Feasibility Study Volume of cargo to be shifted from Tien Sa port area to Lien Chieu port area

Set at 150,000 tons/year for the period starting from the development of Lien Chieu port area.

※As regards the Port Development Master Plan 2020-2030, refer to Table 3-1. ※Phase II construction is not planned for Tho Quang port area.

Figure 6-2 Phased construction plan of general cargo terminal

Cargo handling wharf construction plan at Lien Chieu port area (3)

A construction plan for cargo handling wharves in Lien Chieu port area until 2030 is formulated on the basis of

the above premises as follows:

Table 6-5 Cargo handling wharves construction plan

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

Ton(

000)

Handling Volume of Lien Chieu Port (Shift from Tien Sa to Lien Chieu Port)Handling Volume of Lien ChieuHandling Volume of Tien Sa+Tho QuangActualDemand Forecast (METI Study-Case 2)Capacity of Tien Sa+Tho QuangCapacity of Lien Chieu 150,000ton/year

2,850,000ton (Capacity of Tien Sa)

3,950,000ton (Capacity of Tho Quang Phase 1)

5,572,000ton (Capacity of Lien Chieu 1st Berth)

3,572,000ton(+656,000TEU =approx.12million ton)

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Total

Container 1 1 2General 1 1

118

Case scenario in which Da Nang City People’s Committee becomes the project owner 2.2

Phased construction plan of container terminal (1)



Table 6-6 Conceptual cargo handling capacity of container terminal

Item Conceptual cargo handling capacity Upper limit of cargo handling at Tien Sa port area 10 Mt in total

(Calculation: containers 532,000 TEU + general cargo 3,402,000 tons = ca. 10 Mt = assumed cargo volume in 2021)

Container handling capacity at Tien Sa port area (Phase I & II)


Container handling capacity at Tien Sa port area (Phase I & II + introduction of latest cargo handling equipment and technology)


Berth 1 capacity of Lien Chieu port area Set at 500,000 TEU derived from Table 3-28. Berth 2 & 3 capacities of Lien Chieu port area Set at 400,000 TEU derived from Table 3-28 and Table

3-29. Volume of cargo to be shifted from Tien Sa to Lien Chieu

Set at 100,000 TEU/year for 2022, and 50,000 TEU/year for 2023 onward.

※As regards the Port Development Master Plan 2020-2030, refer to Table 3-1.

Figure 6-3 Phased construction plan of container terminal

0

500

1,000

1,500

2,000

2,500

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

TEU

(000

)

Handling Volume of Lien Chieu Port (Shift from Tien Sa to Lien Chieu Port)Handling Volume of Lien Chieu PortHandling Volume of Tien Sa PortActualDemand Forecast (METI Study-Case 2)Capacity of Tien Sa PortCapacity of Lien Chieu Port

2022：100,000TEU/yearafter 2023: 50,000TEU/year

463,000TEU (Capacity of Tien Sa Phase 1 & 2)

667,000TEU (Capacity of Tien Sa Phase 2 + modernization)

532,000TEU (+3,402,000ton =approx.10million ton)

1,032,000TEU (Capacity of Lien Chieu 1st Berth)

1,432,000TEU (Capacity of Lien Chieu 2nd Berth)

1,832,000TEU (Capacity of Lien Chieu 3rd Berth)

119

Phased construction plan for general cargo terminal (2)



Table 6-7 Conceptual cargo handling capacity of general cargo terminal

Item Conceptual cargo handling capacity Upper limit of cargo handling at Tien Sa 10 Mt in total

(Calculation: general cargo 3,402,000 tons + containers 532,000 TEU = ca. 10 Mt = assumed cargo volume in 2021)

General cargo handling capacity at Tien Sa Set at 2.85 Mt being the median value of cargo volume of 2.7-3.0 Mt in 2030 at Tien Sa stated in the Port Development Master Plan 2020-2030

Tho Quang port area Phase I Set at 1.1 Mt being the median value of cargo volume of 0.9-1.3 Mt in 2020 at Tho Quang stated in the Port Development Master Plan 2020-2030

Lien Chieu Berth 1& 2 capacity Set at 2 Mt derived from the Pre-Feasibility Study Volume of cargo to be shifted from Tien Sa to Lien Chieu

Set at 300,000 tons/year for the period starting from the development of Lien Chieu port area.

※As regards the Port Development Master Plan 2020-2030, refer to Table 3-1. ※Phase II construction is not planned for Tho Quang port area.

Figure 6-4 Phased construction plan of general cargo terminal

Cargo handling wharf construction plan at Lien Chieu port area (1)

A construction plan for cargo handling wharves in Lien Chieu port area until 2030 is formulated on the basis of

the above premises as follows:

Table 6-8 Cargo handling wharf construction plan

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

Ton(

000)

Handling Volume of Lien Chieu Port (Shift from Tien Sa to Lien Chieu Port)Handling Volume of Lien Chieu PortHandling Volume of Tien Sa+Tho QuangActualDemand Forecast (METI Study-Case 2)Capacity of Tien Sa+Tho QuangCapacity of Lien Chieu Port 300,000ton/year

3,402,000ton(+532,000TEU =approx.10million ton)

2,850,000ton (Capacity of Tien Sa)

3,950,000ton (Capacity of Tho Quang Phase 1)

5,402,000ton (Capacity of Lien Chieu 1st Berth)

7,402,000ton (Capacity of Lien Chieu 2nd Berth)

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Total

Container 1 1 1 3General 1 1 2

120

Implementation schedule of the Project 2.3

Table 6-9 shows an outline project schedule that assumes the case of starting operation in 2024 at Lien Chieu port

area (to construct one general cargo berth and one container berth), schedule which has been prepared on the

premise that this Project is implemented under a PPP arrangement and that the public sector portion is

implemented by using Japanese ODA.

For the Project to be operational in 2024, the prerequisites should be fulfilled at the latest by the end of 2019 of

advancing procedures between Vietnam and Japan for the ODA Loan and selection of SPC for the private sector

portion. Multiple official procedures between the two countries have to be pushed forward at a higher than normal

speed from the present time point.

Figure 6-5 and Figure 6-6 show an estimated detailed project schedule that has been prepared in order that various

necessary procedures by the startup of the above operation, organizations involved and timing, etc. are well

recognized between the parties concerned, and realization of the Project is promoted.

Table 6-9 Outline project schedule up to the opening of Lien Chieu port area

Time point Contents of implementation Feb. 2017 Completion of METI Study 2017 Determination of the project owner, completion of Pre-Feasibility Study in

Vietnam 2018 Carrying out feasibility study in Vietnam, implementation of JICA study. 2019 Procedures for Japanese ODA Loan, selection of SPC 2020～2024 Selection of a consultant, designing, preparation of bidding documents,

bidding, construction work 2024 Startup of operation of Lien Chieu port area

121

Figure 6-5 Possible Implementation Scheme for Lien Chieu Port Development Project (1)


Note:1) "Project Owner" means a unit assigned by the governing body to manage and use ODA, concessional loans, and reciprocal capital to execute the program/project.2) Decree No.15 on Public-Private Partnership Investment Form, February 20153) Decree No.16 on Management and Use of Official Development Assistance and Concessional Loans Granted by Foreign Sponsors, March 2016

1. Planning Stage (～Sep, 2017) 2. Feasibility Study Stage （～Sep, 2018) 3. ODA Loan / SPC Arrangement Stage（～Sep, 2019)

Ministry of Transport(VINAMARINE)

National Port Master Plan

Lien Chieu Port Development Plan by

PPP

Prime Minister

Ministry of Planning & InvestmentMinistry of Finance

State Steering Committee on PPP

Danang People's Committee

Propose Approve

Propose

Assign

Approve

( Decree No.15 )

Japanese Government

METI Study for Lien Chieu Port Development

Project

Review

Decision of Project Owner

Japanese Government

JICA Study for Lien Chieu Port Development

Project

Prime Minister


Approve

Assign, Approval

Project ManagementUNIT (PMU)

Ministry of Natural Resource and Environment

ApproveRequest

Review

MOT Danang PC


Japanese Government

Request of ODA Loan for Public Infrastructure

Establish Exchange of Note / Loan Agreement

ODA to Project Owner

( Decree No.16)

Special Purpose Company (SPC)

(Concessionaire)

( Decree No.15)

PMUSelect

( Decree No.16)

Japanese Company

Danang Port Company Join Appraisal

To Design and Construction

Stage

Approve

2)

3)

3)

2)Pre-feasibility Study

Feasibility Study

Environmental Impact Assesment (EIA) Study

Japanese Technology

122

Figure 6-6 Possible Implementation Scheme for Lien Chieu Port Development Project (2)


Note:

1) "Project Owner" means a unit assigned by the governing body to manage and use ODA, concessional loans, and reciprocal capital to execute the program/project.2) Decree No.15 on Public-Private Partnership Investment Form, February 20153) Decree No.16 on Management and Use of Official Development Assistance and Concessional Loans Granted by Foreign Sponsors, March 20164) JICA: Japan International Cooperation Agency IBIC: Japan Bank for International Cooperation JOIN: Japan Overseas Infrastructure Investment Corporation for Transport & Urban Development

5. Operation Stage （Sep, 2024～)4. Design and Construction Stage (～Sep, 2024)

PMU I (MOT)Public Infrastructure

Da Nang – Lien Chieu Port Development Division

Consultant and Contractor

Japanese Fund (JICA, JBIC, JOIN)

Fund for Private

Investment

PMU II (DPC)Terminal Facilities

SPC(Concessionaire)

Establish

Design and Constriction

Consultant and Contractor

Design and Constriction

Project Owner

Select

ODA Loan

Select

Project Owner

Operation of Lien Chieu Terminal

Operation of Tien Sa Terminal

Maintenance of Terminals

Maintenance of Breakwater

Maintenance of Channel

Establish

Maritime Safety

Danang – Lien Chieu Port Operation Division

Port Management Body （PMB)

EstablishPMB Coordinate Ports in Da Nang

4)

Petroleum, Fishing and other Local Ports

123

Chapter 7 Implementing Organization

1. Outline of Organizations

Ministry of Transport 1.1

The organization responsible for the maritime and port affairs is the Ministry of Transport in Viet Nam.

Organizational structure is shown in Figure 7-1. Vinamarine is in charge of maritime and port administration

while PMU is responsible for the implementation of development projects.

Figure 7-1 Organization of MOT

Source: MOT Vietnam Web Site

Internal Departments and Administrations

Administrations -Directorate for Roads of Viet -Nam -Viet Nam Railway Authority -Viet Nam Inland Waterway

Administration -Viet Nam Maritime Administration -Civil Aviation Authority of Viet

Nam -Viet Nam Register -Transport Engineering Construction

and Quality Management Bureau -Health Administration of Transport

Internal Departments -Ministry’s Office - Planning and Investment Dept. -Organization and Personal Dept. - Finance Dept. -Transport Infrastructure Dept. -Transport Safety Dept. -Legal Dept. -Transportation Dept. -Science and Technology Dept. -Environment Dept. -International Cooperation Dept. -Enterprises Management Dept. - Public Private Partnership

Investment Project Management Dept.

-Information Technology Center (IT Center)

-Ministry’s Inspectorate

Training, Research, & Project Management

-Education and Training

Institute -Media/Press

-Project Management Unit (PMU)

-PMU 1 -PMU 2 -PMU 6 -PMU 7 -PMU 85 -Ho Chi Minh Road PMU -Thang Long PMU -Transport Safety PMU -Railway PMU

-Research Institutes

Public Corporations

-Shipbuilding Industry -Corporation Viet Nam Railway Corporation -Viet Nam Motors Industry Corporation -Viet Nam National Shipping Lines - Northern Viet Nam Maritime Safety

Corporation - Southern Viet Nam Maritime Safety

Corporation -Vietnam Airlines -Airport Corporation of Viet Nam -Viet Nam Air Traffic Management Corporation -Waterway Transport Corporation -Southern Waterborne Transport Corporation -Transport Engineering Design Inc. -Civil Engineering Construction Corporation

No.1, 4, 5, 6, 8 -Waterway Construction Corporation -Thang Long Construction Corporation -Viet Nam Expressway Corporation -Cuu Long Corporation for Investment,

Development and Project Management of Infrastructure

- Traco Transport Joint Stock Company -Transport Material Equipment Supply Joint

Stock Company -Viet Nam Maritime Communication and

Electronics Single Member Limited Liability Company

-Vinafco Joint Stock Corporation -Human Resource Development Corporation -Multi Modal Transport Holding Company -Sai Gon Transport Agency Joint Stock

Company -Transport Engineering Design Joint Stock

Incorporated South -Vietnam Sea Transport and Chartering Joint

Stock Company


124

As is the same with the previous port development projects under Japanese ODA Loans, all of them were

implemented with MOT (or Vinamarine) becoming the project owners as shown in Table 7-1. Departments

related to the Lien Chieu Port development project may be the Planning and Investment Dept., Finance Dept.,

Public Private Partnership Investment Project Management Dept., Vinamarine, and other departments in charge of

road development, environmental protection, international cooperation and the like. Construction of port

infrastructure will be managed by one of PMUs. After completion of the project, navigational channel will be

maintained by the Maritime Safety Corporation and ship entry and departure will be controlled by Da Nang

Maritime Administration.

As stated before, project owner is yet to be decided, and depending on the government’s fiscal conditions or

policy, the post may be assigned to Da Nang City People’s Committee that is taking positive activities vis-a-vis

the central government.

Da Nang City People’s Committee 1.2

Da Nang People’s Committee is responsible for municipal administration and is a possible project owner of the

Lien Chieu Port development project. Organizational structure is as shown in Figure 7-2.

Figure 7-2 Organization of Da Nang People’s Committee

Source: Da Nang PC Web Site

Danang People’s Committee

Internal Departments

-Department of Inspection -Department of Justice -Department of Finance -Department of Foreign Affairs -Department of Natural Resources and Environment -Department of Planning and Investment -Department of Education and Training -Department of Science and Technology -Department of Agriculture and Rural Development -Danang Investment Promotion Centre – IPC Da Nang -Department of Labour, Invalids and Social Affairs -Department of Industry and Trade -Department of Information and Communications -Department of Culture, Sports and Tourism -Department of Transport -Department of Internal Affairs - Department of Construction -Danang IPs and EPZs Authority -The Da Nang Radio and Television (DRT)

Project Management Unit

-Son Tra Peninsula and Da Nang's Tourism Beaches Management Board

-Rural Road Construction Project Management Board -Traffic Public Investment and Construction Project

Management Board -Urban Transport Infrastructure Project Management Board -Da Nang Urban Transport Development Project

Management Board -The Bach Dang Dong road Project Management Board -The Resettlement Project Management Board -Da Nang Construction Project Management Board -Tho Quang Fishing Port Management Board -Tho Quang European Boats Management Board -Protective Forests Project Management Board -Southern Laos Project Management Board -Da Nang Investment Project and Construction Land

Clearance & Compensation Board -Investment Project and Construction Land Clearance &

Compensation Board No.2 -Investment Project and Construction Land Clearance &

Compensation Board No.3 -Priority Infrastructure Project Management Board -The Steering Committee for Flood and Storm Control,

Search and Rescue -Rong Bridge Project Management Board -Han River Bridge operating Board

125

As stated before, the Project Owner is not determined at the present moment, so that Da Nang City People’s

Committee that is taking aggressive actions versus the central government can possibly be the Project Owner

depending on the fiscal conditions and policy of the government.

In case that Da Nang City People’s Committee becomes the project owner of Lien Chieu Port development

project, related departments may be the Dept. of Planning and Investment, Dept. of Finance, Dept. of Transport,

Dept. of Construction and other departments in charge of environmental protection, tourism and the like.

Construction of port infrastructure will be managed by a project management unit to be established for the Lien

Chieu port project. Da Nang People’s Committee has no experience in the development of a commercial port,

however, one PMU is engaged in a fishery port project and has experience in offshore work.

The reasons why the Project Owner is not determined are possibly because the priority of this Project has not yet

been clearly defined on the Vietnamese side in addition to the fact that further application for Japanese ODA Loan

by MOT is difficult under the severe fiscal conditions of the State.

2. Project Implementation Agency

In case that MOT becomes the project owner of Lien Chieu Port development, one of the existing PMUs may be

appointed as the responsible PMU for the Lien Chieu Port project. It is also probable that one of Maritime PMUs

is appointed for the Lien Chieu Port project.

According to the attached proposal No. 10444/UBND-SKHDI, 26 December 2016, a Project Management Unit

for Transport Facility Construction and Investment is expected to be organized under MOP in case Da Nang City

People’s Committee will implement the project.

As relevant examples, organization charts of PMU85 of MOT that worked as the PMU in Da Nang Port

Improvement Project and Cai Mep Thi Vai International Port Construction Project and that of the planned PMU is

provided in Figure 7-3 and Figure 7-4, respectively

Figure 7-3 Organization chart of PMU85

Source: PMU85

Accounting and Financial Dept. Economics Planning Division

Technical Appraisal Division Administration

Project ManagementDivision 1




Deputy Director


General Director

Deputy Director Deputy Director

126

Figure 7-4 Organization chart of PMU for Transport Facility Construction and Investment (Planned)

Source: Da Nang City People’s Committee

3. Organizational Project Management Capability

Port Development Project Experience 3.1

MOT has experience in developing a large commercial port and is therefore qualified to carry out the

development of Lien Chieu Port. Table 7-1 shows port development projects implemented by Japanese ODA

loans and implementing agencies which managed the project. In cases where MOT was the implementing agency,

one of the PMUs under MOT managed the project. In cases where Vinamarine was the implementing agency, one

of Maritime Project Management Units (MPMU) managed the project.

Table 7-1 Japanese ODA loans for Port Development and Implementing Agencies

Project Loan

Agreement Date

Credit Line Construction Consulting Serv. Implementing Agency million yen Interest

(%) Period (years)

Interest (%)

Period (years)

Lach Huyen Port Infrastructure Construction Project (Port) (III) 3/31/2016 32,287 0.1 40 0.01 40 MOT

Lach Huyen Port Infrastructure Construction Project (Port) (II) 3/18/2014 21,051 0.1 40 0.01 40 Vinamarine

Cai Mep-Thi Vai International Port Construction Project (II) 3/22/2013 8,942 0.2 40 0.01 40 MOT

Lach Huyen Port Infrastructure Construction Project (Port) (I) 11/2/2011 11,924 0.2 40 0.01 40 Vinamarine

Cai Mep-Thi Vai International Port Construction Project (I) 3/31/2005 36,364 0.4 40 0.40 40 MOT

Hai Phong Port Rehabilitation Project (2) 3/29/2000 13,287 1.0 40 0.75 40 MOT

Da Nang Port Improvement Project 3/30/1999 10,690 1.8 30 0.75 40 MOT Cai Lan Port Expansion Project 3/29/1996 10,273 2.3 30 2.30 30 Vinamarine Hai Phong Port Rehabilitation Project (1) 1/28/1994 3,975 1.0 30 1.00 30 Vinamarine

Source: JICA Database

Department of Transport

General Director Deputy Director

Deputy Director

Organization and Administration

Division

Finance and accounting Division

Technical Division

Professional Division

Bidding Plan Division

127

PMU under MOT has experience in several port development projects such as “Cai Mep - Thi Vai International

Port Construction Project”, “Hai Phong Port Rehabilitation Project”, and “Da Nang Port Improvement Project”.

MPMU under Vinamarine has experience in “Lach Huyen Port Infrastructure Construction Project”, “Cai Lan

Port Expansion Project”, and “Hai Phong Port Rehabilitation Project”. In this connection, PMU under MOT and

MPMU under Vinamarine are well experienced in port development projects and have sufficient knowledge on

port construction, equipment and operation.

PMU under Da Nang PC has experience in road projects, bridge construction projects, fishing port project and

other development projects; however, it has no experience in the development of a commercial port. It is therefore

important to carry out capacity development in the field of port planning, design, construction work, and operation,

and in the management of ODA loan projects. In addition, PMU needs to implement the selection of

concessionaire, manage the project under a Public Private Partnership scheme, and supervise activities of private

operators. Da Nang PC may need to invite outside experts to assist with the capacity building of related staff

members.

Even in the case where Da Nang PC becomes the project owner in line with the policy of the central government,

it appears to be necessary to build up a collaborative arrangement of, for example, entrusting construction and

management of the official fund using part to the PMU of MOT that has vast experience in the construction and

management of large-scale ports.

Measures for Successful Port Management 3.2

When Lien Chieu Port enters into operation, two ports will coexist in Da Nang Bay. It is imperative to clearly

demarcate the roles of two ports. If the two ports are operated in a competitive manner, each port will try to attract

container cargo, which is the most profitable cargo, and will offer discount rates for container handling. Severe

competition will only reduce the income of both ports. As a large investment is required to develop Lien Chieu

Port, no private company will be willing to make such an investment if their potential income is threatened by

cut-throat competition.

In order to avoid this situation, a plan to transfer cargo from Tien Sa Port to Lien Chieu Port should be formulated

by the competent authority and authorized by MOT and Da Nang PC. SPC for Lien Chieu Port and Da Nang Port

Joint Stock Company shall follow the transfer plan. If cargo shifts from Tien Sa Port to Lien Chieu Port, cargo

handling equipment will also be transferred to Lien Chieu. Taking these factors into account, it’s appropriate that

Da Nang Port Joint Stock Company joins the SPC for Lien Chieu Port.

Furthermore, it may be more practical if the SPC to be established will operate both container terminals in Tien Sa

Port and Lien Chieu Port, and pay rent to Da Nang Port Joint Stock Company. In this case, Da Nang Port Joint

Stock Company should become a holding company and lease its facilities to the SPC. Present port workers would

shift to SPC.

The ports of Tien Sa and Lien Chieu are supposed to be operated by Da Nang Port Joint Stock Company alone or

SPC established by Da Nang Port Joint Stock Company has a stake. Advantages and disadvantages of each

operational scenario are summarized in Table 7-2.

128

Table 7-2 Advantages and Disadvantages of Each Port Operator Scenario

Cases Operator of Tien Sa Port

Operator of Lien Chieu Port Advantages and Disadvantages

1 Da Nang Port Joint Stock Company

Da Nang Port Joint Stock Company

(Advantage) Both ports are operated by one single operator, which will enable harmonized operation of both ports and encourage the smooth shift of cargoes. (Disadvantage) Da Nang Port Joint Stock Company has to raise all funds for the private portion of Lien Chieu Port Development. However, difficulties are envisaged in fundraising.

2 Da Nang Port Joint Stock Company

SPC established by Da Nang Port Joint Stock Company and Private Investors

(Advantage) Private investors participate in SPC, so that fundraising for the private portion of the Lien Chieu development will not be an issue. (Disadvantage) Da Nang Port Joint Stock Company will be the prime shareholder of SPC, but the two companies are independent. There may be cases when this leads to a conflict of interests.

It would be necessary for Da Nang Port Joint Stock Company and SPC to reach a contractual agreement on the lease of cargo handling equipment, compensation for the shift of cargoes, and other compensation.

Port workers will be separated into two groups and be assigned to one of the two companies. Assignment of the group may face objection from port workers.

3



(Advantage) SPC, established by Da Nang Port Joint Stock Company as the prime shareholder and private investors, will operate both ports, which will enable harmonized operation of both ports and encourage the smooth shift of cargoes.

As the SPC will operate Tien Sa port and Lien Chieu port, it will be attractive to private investors. (Disadvantage) Da Nang Port Joint Stock Company will become a holding company and receive stock dividends and fees for the lease of property. Port workers and administrative officials will be required to move to the SPC.

Since fundraising in the abovementioned case 1 would be difficult for the development of Lien Chieu Port, case 2

or 3 is considered more feasible. In order to attract private investment, case 3 may be more attractive as the SPC

will operate both ports in Da Nang Bay. If shareholders of Da Nang Port Joint Stock Company do not support

case 3, case 2 is acceptable.

129

Chapter 8 Technical Advantages of Japanese Companies

1. Assumed form of participation by Japanese companies (equity

investment, material and equipment supply, operation and maintenance of

port facilities)

Possible form of participation by Japanese companies in the public sector portion (breakwater, seawall, access

roads, construction of temporary jetty(ies) and dredging of navigation channels and berths) is through securing

contracts of construction work or consulting service.

Since an SPC is supposed to assume construction and operation of the cargo terminals, Japanese companies may

have a chance, following the selection of the project owner in Vietnam, to take part in the private sector portion

related businesses with a share of below 50% as an SPC member(s). There is a possibility of participating in SPC

as a shareholder(s) as well.

At the stage of construction work, Japanese construction companies, manufacturers or trading firms may secure

orders for the construction work and supply of cargo handling equipment subsequent to the selection process

undertaken by the SPC. At the stage of operation, participation as a terminal operator can be possible subject to

the selection by the SPC.

It is difficult to confirm the intention of Japanese companies with respect to the participation in the private sector

portion of this project under the present circumstance where the Project Owner is undecided. Given, however, that

Japanese companies together with foreign companies including Chinese firms have presented a bid to the ongoing

tender to procure cargo handling equipment in the private sector portion of Lach Huyen Port Infrastructure

Construction Project, there is a sufficient possibility of Japanese companies participating in the private sector

portion of the project subject to the clarification in the future of the implementation system and risks associated

with the Project

2. International competitiveness of Japanese companies in the Project (in

terms of equipment, commodity and service) and possibility of securing

order for these

Since the Vietnamese government desires at present that a Japanese ODA Loan is to be granted to the public

sector portion of the Project, securing order for construction work and consulting service will vary as follows: in

case Special Terms for Economic Partnership (STEP) is applied to the Loan conditions, it will be facilitated on a

tied loan basis, placing Japanese companies in an advantageous position in receiving orders for both construction

work and consulting service. In case general terms and conditions are applied, consulting service and construction

130

work will be procured on the basis of tied loan and untied loan (this last being subject to international bidding),

respectively.

As for the private sector portion, SPC will assume selection of terminal constructor, cargo handling equipment

supplier and terminal operator, and hence it appears that the possibility for Japanese companies to receive orders

depends on whether or not they will participate in the bidding as the members of SPC. In the ongoing Lach Huyen

Port Infrastructure Construction Project, however, where Japanese companies are listed as the members of SPC,

local companies have been awarded to the construction of the terminal and consulting service, and procurement of

container cranes which are major cargo handling equipment is being practiced through international bidding. This

means that Japanese companies have to seek to secure contracts on the back of advantages in not only quality but

also price aspects contemplating the possibility of eventual international bidding.

3. Advantages of Japanese companies in the Project implementation

(technical and economic aspects)

In this Study, METI Study Team reviewed the structure of the breakwater and seawall put forward in the

Pre-Feasibility Study, thereby proposing more stable, more economic and more eco-friendly structures.

Concreting speaking, the proposed structure contemplates use of highly-stable wave breaking blocks1 being

patented by a Japanese company and application of Japanese unique soil improvement method to replace soft

seabed soil with blast furnace slag, a recycled material in steel mills, which contribute to save cost of work and

reduce discharge of excavated seabed soil that can cause environmental problems.

If Japanese ODA Loan comes to be applied to the Project and the above proposal is accepted, receiving order by

Japanese companies for the construction work and consulting service for the public sector portion will be

practically secured. Should an untied loan corresponding to the general terms and conditions is applied, the

possibility of securing award is high enough, subject to the condition that experience in constructing breakwaters

and seawalls of the type of the above-mentioned structures can be stipulated as a qualification criterion for

constructors to bid.

As regards the private sector portion, Japanese companies can display their advantages by proposing application

of their knowhow 2 for terminal operation and introduction of energy saving or environmentally friendly

1 Excellent in economy with their greater stability against waves thanks to the ingenious contrivance in their shapes

and their smaller weight than other comparable products (because of less quantity of concrete used) to resist certain specified wave force. In addition, experiments on the stability of the blocks against wave force has been conducted at Thuyloi University in Vietnam, and the blocks have working results in Vietnam as well as in Japan.

2 - Yokohama Port Y-CON24: A system knowhow to mitigate congestion in front of a container gate and to enhance working efficiency of terminal operators, shippers and public carriers by realizing a practically 24-hour open container terminal gate that makes use of the stockyard. The system also facilitates shippers and public carriers to acquire information on internet or through cellular phone about the congestion status of container cargoes at the container terminal (including possibility of carrying them out).

- Hakata Port HITS: A system knowhow to provide information on the position of containers in Hakata Port, the status of procedures such as customs-clearance, and the waiting time at the gate. In addition, the system offers a service to enable physical distributers to grasp real-time information necessary for enhancing physical distribution efficiency and its acceleration, such as information covering instructions and conveyances related to operation. The system also aims

131

equipment3. In addition, promotion of Da Nang City selecting Japan and introducing Japanese companies’

technology into this Project may be possible on the basis of the cooperative relationship that Yokohama City has

built up with Da Nang City as an inter-city cooperative arrangement.

4. Contents and prices of major equipment and materials expected to be

procured from Japan

As stated above, the possibility of procuring equipment and materials from Japan depends on multiple conditions.

Direct project cost of equipment and materials expected to be procured from Japan for the public and private

sector portions of this Project are as indicated in Table 8-1 and Table 8-2 (As for respective breakdowns, refer to

Table 5-1 and Table 5-2).

Table 8-1 Direct project cost related to the public sector portion

Item Constructing one general cargo berth and one container berth

Constructing one general cargo berth and two container berths

Construction cost (JPY) 11,818,547,885 13,282,770,068 Consultant fee (JPY) 354,556,437 398,483,102 Total (JPY) 12,173,104,322 13,681,253,170

Table 8-2 Direct project cost related to the private sector portion

Item Constructing one general cargo berth and one container berth

Constructing one general cargo berth and two container berths

Construction cost (JPY) 10,071,649,681 14,508,842,391 Procurement cost of cargo handling equipment and associated control equipment (JPY)

4,125,537,383 7,425,967,289

Consultant fee (JPY) 302,149,490 435,265,272 Total (JPY) 14,499,336,554 22,370,074,952

5. Necessary measures to promote award to Japanese companies

METI Study Team considers that taking effective measures, such as the following, in an integral manner will

promote materialization of this Project and enable Japanese companies to secure award of contracts.

High-quality infrastructure (1)

Japanese technology and product quality have been well recognized in Vietnam. In many cases, however,

people there tend to hesitate before introducing Japanese products or services in view of supporting speed or

cost balance. Under such circumstances, a more accelerated supporting process is necessary in order to promote

to facilitate sharing of operating information among operators concerned, thereby significantly raising high-quality customer service and working efficiency to contribute to the enhancement of cargo security.

3 Such as an RTG equipped with electric motor in a hybridized system (Refer to Chapter 3 4.3 (3) (3) Introduction of highly energy-saving materials and equipment)

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award to Japanese companies. Furthermore, on the basis of the “Partnership for Quality Infrastructure” being

advanced by the Japanese government, it is necessary to explain in plain language to the Vietnamese

government on the speedup of ODA Loan procedures and use of diverse and new supporting tools such as JOIN

(Japan Overseas Infrastructure Investment Corporation for Transport & Urban Development), and to request for

their actions of applying for Japanese ODA Loan conditioned on the Special Terms for Economic Partnership

for the implementation of the public sector portion of the Project.

Cooperation with the existing supporting projects (2)

The Da Nang Port Improvement Project completed in 2005 was successfully implemented by the Japanese

consultant and construction companies under Japanese ODA Loan, but the fiscal conditions of the Vietnamese

government and their concept on ODA have since significantly changed. In the meantime, the supports

including assistance projects by JICA and other Japanese official entities, as well as those supports that have

been provided by the Japanese local governments such as Yokohama City, Japanese companies and universities

for Da Nang City, have been a contributor to the solution of urban problems related to environmental and traffic

conditions. It is necessary to push forward participation of Japanese companies in the Project and their securing

award by highlighting the achievements of these supporting programs (from the viewpoint of a port

development project associated with them),

Experience and achievements in Vietnam (3)

In Vietnam the Lach Huyen Port Infrastructure Construction Project is in progress aiming at the startup of

operation in 2018 despite facing multiple challenges arising from the reasons of, for example, the yet

undeveloped law system that regulates projects being implemented in Vietnam under a PPP arrangement.

Nevertheless, Japanese companies are impressed that participation in Vietnamese private projects still bears

high risks. Under such circumstances, in order to promote award to Japanese companies, their participation in

Lien Chieu Project needs to be sought by making in-depth analysis of the various problems identified while

implementing the Lach Huyen project and clarifying assumed risks and counter-measures of the Lien Chieu

Project.

High-level conference (4)

In order to promote award to Japanese companies, on top of their own efforts, it is necessary that a government

level request be made of the Vietnamese side so that reform may be enforced in the legal system for PPP

projects in Vietnam and the priority order may be confirmed regarding the implementation of this Project under

Japanese ODA Loan. Besides, on occasion of the bilateral discussions to take place during the APEC

conference which is scheduled to be held in Da Nang City this year, it is desirable that the Vietnamese side will

request support of this Project from Japan.

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