Foreign investors unhappy with HCMC logistics infrastructure

Speaking at the Policy Dialogue 2024 organized by the city People’s Committee and the Vietnam Business Forum on Wednesday, Tran Anh Duc, co-head of the latter’s investment & trade working group, said foreign business communities are keen on investing in Vietnam, a major manufacturing hub in Asia.

But the infrastructure in HCMC, the country’s economic mainstay, does not meet their needs, he said.

"The road leading to Cat Lai Port and the HCMC-Long Thanh-Dau Giay Expressway are often congested. The city also lacks a large-scale logistics center."

He said procedures at Tan Son Nhat Airport are lengthy and leave a poor impression on investors while road infrastructure does not match the north’s.

HCMC needs a clear plan to improve connectivity, he said.

High costs are another major issue, with logistics accounting for 25% of Vietnam’s GDP as against the global average of 10-12%, he said.

Foreign firms also want more information about the timeline for the transport sector’s green transition since they want to switch to green logistics and use electric trucks, he added.

Vietnam Business Forum co-head Tran Anh Duc (middle) speaking at the Policy Dialogue 2024 on Sept. 18, 2024. Photo courtesy of the Investment & Trade Promotion Centre of HCMC

In response, Vo Khanh Hung, deputy director of the HCMC Department of Transport, said the city aims to increase the proportion of urban land allocated for transportation to 15% from the current 12.2% and the road density to 2.5 kilometers per square kilometer and later to 3.1.

It has completed two of its five planned expressways while its ring road network is under construction and the first metro line is expected to be completed this year, he said.

The transport authorities, police and local authorities are coordinating to ease congestion around Cat Lai Port and Tan Son Nhat Airport, he added.

Nguyen Cong Hoan, deputy director of Tan Son Nhat, said the airport’s service quality has been affected since it is operating well above its designed capacity, serving 41.6 million passengers a year against a capacity of 28-30 million.

But its Terminal 3, which is expected to have a capacity of 20 million passengers, and Long Thanh Airport would help alleviate the situation once they are completed, he said.

Vo Van Hoan, vice chairman of the HCMC People’s Committee, speaking at the Policy Dialogue 2024 on Sept. 18, 2024. Photo courtesy of the Investment & Trade Promotion Centre of HCMC

Vo Van Hoan, vice chairman of the city People’s Committee, said some major projects are planned to help improve logistics, such as an international port in Can Gio District.

The city has also drafted a detailed plan for electric vehicles that would be announced soon, he added.

The transport department is working on emission control solutions and seeks to switch buses completely from diesel and gasoline to electric by 2030, and taxis and personal vehicles by 2050.