Lach Huyen International Gateway Port, Japanese ODA Loans and a Public-Private Container Terminal

Lach Huyen is a deep-water port in Hai Phong on the northern coast of Viet Nam. It was built to meet growing container demand and the increase in the maximum size of container ships (JICA, 2016). JICA describes it as the first pilot public-private partnership (PPP) project between the Government of Viet Nam and the Government of Japan, in which the public portion was financed by Japanese ODA and the private portion was invested by a joint venture of Japanese and Vietnamese companies (JICA, 2020).

Approach

Public and private works were split. Japanese ODA loans funded the public infrastructure: soil improvement and reclamation for the terminal area, dredging, construction of revetments and a training dyke, and the Tan Vu-Lach Huyen Highway of about 15.63 km. A joint venture of Japanese companies and a Vietnamese company was to build the container yards, pier-type berths and cargo-handling equipment, and then operate and maintain the terminal (JICA, 2011; JICA, n.d.).

Loans were agreed in phases. JICA signed three phases of ODA loans for the port and the road and bridge components: JPY 20,995 million in November 2011, JPY 37,958 million in March 2014 and JPY 55,167 million in March 2016, a total of JPY 114,120 million (JICA, n.d.).

Long-term, low-interest terms. The 2014 and 2016 loans carry an interest rate of 0.1 percent a year, repayable over 40 years including a 10-year grace period (JICA, 2014; JICA, 2016).

Government agencies led delivery. The Ministry of Transport was the executing agency, with the Vietnam Maritime Administration responsible for the port and the Directorate for Roads of Viet Nam responsible for the road and bridge (JICA, 2011).

Results

The deep-sea port and related basic infrastructure opened in 2018. The public works included a 3,230 metre breakwater and a 7,600 metre sand protection dyke, and in 2020 the project received the Japan Society of Civil Engineers (JSCE) Innovative Technique Award, the first presented to a project in Viet Nam (JICA, 2020).

The private terminal, Haiphong International Container Terminal (HICT), opened on 13 May 2018. At opening, its shareholders were Saigon Newport Corporation (51 percent), Mitsui O.S.K. Lines (17.5 percent), Wan Hai Lines (16.5 percent) and the Itochu Group (15 percent). HICT had 750 metres of berth, 16 metres of water depth at berth and a capacity of 1.1 million TEU a year, and could receive container ships of up to 14,000 TEU (Saigon Newport Corporation, 2018).