Unlocking Vietnam’s Maritime Potential: The Thaco Group’s Ky Ha – Quang Nam Dredging Project Receives Green Light from the Ministry of Transport

This is the second time in the past six months that the Ministry of Transport has corresponded with the People’s Committee of Quang Nam Province regarding this maritime channel.

In Official Dispatch No. 8526, the Ministry of Transport stated that the consideration and approval of allowing THACO to dredge the Ky Ha channel must follow the proper legal procedures as stipulated in Decree No. 57/2024/ND-CP on managing dredging activities in seaport and inland waterway areas.

According to the Ministry of Transport, the Ky Ha channel dredging project was approved by the Prime Minister and assigned to the People’s Committee of Quang Nam Province for implementation using state budget funds. Subsequently, in March 2009, the Vietnam Maritime Administration handed over the management of the Ky Ha channel to the local authorities to carry out the upgrade and receive vessels with a capacity of 20,000 DWT.

During the implementation process, due to certain obstacles, the People’s Committee of Quang Nam Province decided to halt the project and proceed with the necessary steps for acceptance, payment, and finalization to conclude the project.

Currently, the channel has not been handed over to the Ministry of Transport for management and operation. Therefore, to comply with the regulations set forth in Decree No. 57/2024/ND-CP, the Ministry of Transport requested the People’s Committee of Quang Nam Province to direct relevant agencies to promptly finalize the settlement of the Ky Ha channel dredging project and carry out the necessary procedures as stipulated in Decree No. 43/2018/ND-CP dated March 12, 2018, on the management, use, and exploitation of maritime infrastructure assets, in order to hand over the Ky Ha maritime channel to the Ministry of Transport for management.

“After the handover and acceptance of the management of the Ky Ha maritime channel, the Ministry of Transport will consider approving the proposal of the THACO Corporation to dredge the Ky Ha maritime channel in accordance with the provisions of Decree No. 57/2024/ND-CP dated May 20, 2024, of the Government,” the dispatch from the Ministry of Transport stated.

Regarding the proposal submitted by the THACO Corporation for dredging the Ky Ha maritime channel, the Ministry of Transport requested the company to supplement the project proposal dossier in accordance with the provisions of Clause 1, Article 20 of Decree No. 57/2024/ND-CP. The supplementary contents should include: the necessity and compatibility of the project with the socio-economic development plan of the industry and locality; the current status of the channel; the objectives, scale, and location of the project; the estimated dredging volume; the proposed disposal site for the dredged material; the implementation schedule and timeframe; a description of the management and construction organization; ensuring maritime traffic safety; ensuring environmental sanitation; and preventing environmental pollution.

According to the People’s Committee of Quang Nam Province, the Ky Ha maritime channel plays a crucial role in transporting import and export goods in the Central region, the Central Highlands, Southern Laos, and Northeast Cambodia through Chu Lai Port.

However, after a long hiatus in construction since June 2022, many sections of the channel have been severely silted up (with some sections currently reaching a depth of only -8mHD), making it impossible to ensure sufficient depth for large-capacity vessels to enter and exit the Chu Lai Port. As a result, the port cannot accommodate and operate ships as per its design, forcing goods transported by large vessels to be diverted to other regional ports, leading to infrastructure wastage and increased logistics costs, significantly impacting the province’s socio-economic development.

Previously, the THACO Corporation had submitted a proposal to the People’s Committee of Quang Nam Province, requesting approval for the company to dredge the channel to a minimum depth of -9.3 m, ensuring the ability to receive vessels of 30,000 DWT in reduced load.

The project will be implemented using funds from the THACO Corporation, with a commitment not to request reimbursement from the state budget. After the completion and acceptance of the project, the THACO Corporation will hand over the work to the state for ownership and management.

Why did the THACO Corporation agree to “foot the bill” for dredging the Ky Ha – Quang Nam channel?

According to MarketTimes’ research, in February 2024, THILOGI (a subsidiary of THACO) submitted a proposal for the project to expand and upgrade the Chu Lai Port in the Tam Hiep Port Area, with a total investment of nearly VND 1,589 billion.

The project aims to expand the port area to 1.72 hectares and upgrade the Chu Lai Port in the Tam Hiep Port Area to accommodate vessels of 50,000 DWT.

The land requirements for the project fall within the 5.48-hectare area registered in the 2023 land use plan of Nui Thanh district, approved by the Provincial People’s Committee in Decision No. 1354/QD-UBND dated July 3, 2023. The current status of this area is state-managed water surface, with no households or individuals using it.

The project to expand and upgrade the Chu Lai Port has a total investment of over VND 1,589 billion, with the implementation period spanning 2024 and 2025. The project’s operational duration is 70 years…

The expansion and upgrade of the Chu Lai Port comply with the master plan for the development of Vietnam’s seaport system for the period of 2021-2030, with a vision towards 2050. According to this plan, Chu Lai Port (operated by THILOGI) is one of 15 seaports nationwide that will be upgraded from a local comprehensive port (type 2) to a national and regional hub port (type 1) in the coming years.

The goal of the project, as outlined in the master plan, is to develop the Chu Lai port system into a key transportation and trade hub in the Central region and the Central Highlands, serving as a gateway to the East Sea for the Central Highlands, Southern Laos, Northeast Cambodia, and Thailand.

To develop the Chu Lai Port in line with the scale and cargo handling capacity of a type 1 seaport, the People’s Committee of Quang Nam Province approved the assignment and budget estimate for the survey and master plan formulation for the development of the Chu Lai Port, with a vision towards 2030.

Covering an area of 140 hectares, the entire Chu Lai Port area marks a significant step forward in logistics services in the Central region, contributing to the completion of a comprehensive service supply chain while also attracting investors to the Chu Lai Open Economic Zone.

Chu Lai Port is the only large-scale river port in the Central region, boasting advantages such as being a sheltered port, strategically located on the Truong Giang River, approximately 80 km from Da Nang city, 30 km from the Dung Quat Economic Zone (Quang Ngai province), 40 km from VSIP (Quang Ngai), 3 km from the Bac Chu Lai and THACO Chu Lai industrial parks, 20 km from the Tam Thang industrial park (Tam Ky), and conveniently connected to National Highway 1A (2 km away) and the Da Nang – Quang Ngai expressway (4 km away). The area also benefits from a well-developed transport system, including a railway station and an international airport.

Constructed to international standards using the advanced Larsen steel sheet pile technology commonly employed in ports around the world, such as Hong Kong, Taiwan, and Singapore, Chu Lai Port has a capacity of 3 million tons per year, with a 500-meter-long pier that can accommodate up to three vessels with a capacity of 30,000 tons each. It is a comprehensive port capable of handling a diverse range of cargo, including containers, bulk cargo, ultra-long and ultra-heavy cargo, liquids, and gases.

However, with the current depth of the channel, it is extremely challenging to receive vessels of 30,000 tons. Therefore, to enable the efficient operation of the port and its role as a crucial hub for Chu Lai Logistics, as well as to attract major shipping lines such as SITC (South Korea), APL (Japan), COSCO (China), and ZIM (Israel), it is imperative to dredge the Ky Nam – Quang Nam channel, which has been severely silted up.

This explains why THACO agreed to “foot the bill” for dredging the Ky Nam – Quang Nam channel (instead of using state budget funds), aiming to prevent infrastructure wastage at the soon-to-be-upgraded Chu Lai Port.