DANANG MAKES PUSH FOR FREE TRADE ZONE

The central city of Danang is striving to develop itself into being a major logistics centre for Vietnam, backed by major government policy moves.

It has been scheduled that a forum on developing a free trade zone (FTZ) for the city as a new driving force for the logistics industry will take place on November 14, attracting 350-400 domestic and international guests.

Danang People’s Committee said that the forum aims to introduce the potential in logistics with the Danang FTZ model to attract investment, as well as enhance exchange activities, and support business connections through exhibitions and introductions of products and services in the industry.

This is also an opportunity for the city to exchange and discuss specific solutions and tasks to promote the development of the logistics industry, as well as orientation for the construction of the Danang FTZ.

According to Danang’s planning for this decade, approved a year ago, it aims to become a regional logistics centre - an orientation considered more feasible with the presence of an FTZ.

Duong Tien Lam, a representative from the Vietnam Logistics Service Enterprises Association, said that Danang’s industry is facing a great opportunity, with Lien Chieu seaport under construction and the FTZ still to be formed.

“When put into operation, Lien Chieu port will be very convenient to attract goods from the Central Highlands region and southern provinces of Laos, replacing Tien Sa port, which no longer has much room for development,” Lam said.

“In addition, many key traffic projects such as highways, coastal roads connecting Lien Chieu port, or upgrading traffic axes on the East-West Economic Corridor route have been invested in, creating a synchronous infrastructure for Danang’s logistics industry.

Great prospects

The FTZ associated with Lien Chieu port is creating interest and some large corporations want to participate.

The port’s developers said that the infrastructure part has a total investment of about $146 million, which is being accelerated for completion in 2025. It has already completed 70 per cent of the progress.

It is seeking investment for eight container terminals, six general cargo terminals, terminals for river-sea ships, and the port rear. According to preliminary calculations by Danang’s authorities, the investment cost is about $2.04 billion.

In October, the APM Terminal-Hateco joint venture was the next latest to submit an expression of interest for the Lien Chieu project. The venture commits that, if selected as investor, it will ensure the volume of transported goods and create a flow of goods to and from key locations, turning Danang into an important freight transit centre in the medium and long term. It also commits to build it into the first green port in Vietnam, with green logistics services and maintaining the highest standards of governance, environmental, and social responsibility.

In addition to that, Lien Chieu port has also attracted the attention of Adani from India and Sumitomo from Japan.

Meanwhile, Danang will invest in the construction and business of infrastructure for functional areas in the Danang FTZ, including the trade-service zone with capital of as much as $126 million; and a logistics centre associated with Lien Chieu seaport with funding of a similar figure. In addition, it will also invest in the construction and business of inland waterway tourism for about $337 million.

Realising the dream

According to Assoc. Prof., Dr. Nguyen Chu Hoi, permanent vice president of the Vietnam Fisheries Association, with its favourable geographical location and natural conditions, Danang will develop into a major marine economic centre of the country, an international-class marine urban area.

“Danang is an important traffic hub, with full road, rail, sea, and air traffic. This is a condition to promote the role of the gateway to the East-West Economic Corridor, an important port of the central region, aiming to become an international gateway port. It is the foundation for building a logistics service supply chain, and a logistics centre of the region and ASEAN,” Hoi said.

The marine economic sectors that need to be prioritised for development in Danang, according to Hoi, are maritime economy, seaport services, tourism services, seafood exploitation, aquaculture, and the marine urban economy.

To realise its long-term developmental goals, Danang has made a detailed plan to develop the logistics industry. According to the project on service development for 2021-2030, with a vision to 2050, Danang sets a target that by 2030, the contribution rate of the logistics service industry to regional GDP will reach more than 11 per cent, the outsourcing rate will hit more than 40 per cent, and related costs will be reduced to 13 per cent of regional GDP. Logistics centres in Danang will meet about 55 per cent of the service demand for goods through seaports, 20 per cent of goods through railways and airways.

By 2050, the contribution rate of the logistics service industry to regional GDP will reach more than 15 per cent. Related centres in

Danang will hit about 55 per cent of the service demand for goods through seaports, and 40 per cent of goods through railways and airways.

Danang will also implement a series of solutions to develop relevant services from seaports, airports, and railways. In particular, enterprises operating at Danang seaports are encouraged to provide full basic logistics services. The city encourages aviation logistics enterprises to provide 24/7 services; and must strengthen the connection between Danang International Airport and key domestic and international economic centres.

In addition, railway services are also focused on, building a cargo terminal in the Kim Lien area connecting Lien Chieu port, and investing in developing Kim Lien station into a multimodal connection point.

At the same time, it will invest in infrastructure serving logistics services, especially IT infrastructure. It will form and operate an information network providing such services to businesses in the area, the Central Key Economic Zone, and along the East-West Economic Corridor.

Source: VIR