VIETNAM SEAPORTS ASSOCIATION

SECRETARY REPORT

at the Annual Meeting 2008

11/09/2008 – Nha Trang City

Based on the resolution of the 6th General Meeting of the Vietnam Seaports Association (VPA) in Vung Tau on November 2007 on orientation and activities of the association for 2008-2010 and under the guidance of the 6th Term Standing Committee, the Secretariat has implemented the program of activities of the association with the schedule, results and evaluation including the financial report are detailed thereafter. In addition, based on the objectives and guidance of the Standing Committee, the Secretariat has also prepared the plan of activities and budget for 2008-2009 for the comments and decision by the meeting.

1. Membership: Currently, the Association has 49 members with total annual throughput of 134 million tonnes, 31% increase over 2006. In 2007-2008, four new members have been adopted namely Đình Vũ, Cái Cui, VICT and Binh Minh. For the time being, most of major ports of Vietnam are VPA members. However, there have been also some potential member ports including 100% foreign invested dedicated terminals and JV container terminals under development. The association, together with the support of other member ports, shall have to invite those ports to join in.

            On organization of the association, the Standing Committee is comprising of 15 members, including the Chairman and 3 Vice Chairmen. The Secretariat has 6 members who are from different ports and work as extra assignment with the support of Saigon Port. There have been changes in the management position at some ports in 2007-2008, such as Mr. Nguyễn Quang Minh Director of Cat Lai Petroleum Port from Feb 2008 replacing Mr. Nguyen Van Hoa, transferred, Mr. Vu Tuan Duong, Director of Doan Xa Port from April 2008 replacing Mr. Dao Van Then, retired.

2. Membership fee: to date 48 member ports have paid membership fee for 2008 based on membership schedule approved by the 2nd. Main Meeting.

3. Financial report as of 31 July 2008 based on the financial statements from Saigon Port Financial Department is enclosed as Annex 1. In which, actual costs incurred in 2007-2008 including estimated cost for this meeting are in line with the budget approved by the 6th. Main Meeting in Vung Tau. Some of the budget items provided for the activities of the Standing Committee, the sub working groups, consulting experts, collection of information, dissemination of technical materials have not been used. On the other hand, the cost of organizing the Annual Meeting in 2008 is higher than expected. The publication of Shipping Times magazine has been self sufficient and had nominal contribution to the general budget. Through this activity, the association has invited many leading experts to join the media activity of the association. In addition, the traditional sponsors as well as new sponsors have had positive support for the organization of the annual activities of the association and in fact have help covering significant part of the organization costs, but also make our activities more diversified and connected to the market.

From 2004, the association had approved the monthly allowance for permanent members of the Standing Committee and had employed one staff working full time for the Secretariat at 2.5 million Dong / month salary. The bank interest amounts generated have been approved to be used for paying extra time to Saigon Port staff who had provided support to the Secretariat in administrative, financial works, updating and operating the website. Saigon Port has been supporting the activities of the association on office space, manpower, IT equipment, maintenance and operation of the website and some other activities in promoting foreign relations, participation in APA, EU activities.

            Up to now, the budget of the association has been maintained at a level higher than the total membership fee collected each year. The activities relating to international economic integration including the annual meetings of APA have been agreed to be covered mainly by the participating ports instead of the association budget thus there has been no limitation on the participation from the member ports as before.

4.         Budget for 2008-2009 for the activities of the association based on the orientation and requirements in the report of the Standing Committee is enclosed as Annex 2 for the meeting to review and comment. The Association has had some contingencies for many budget items but in reality the spending approvals by the Standing Committee have always been on a as needed basis most economical and if possible high balance shall be maintained for important and urgent spending later on.

 5. Some specific works to report to the Meeting. Main activities of the association being carried out last year have been referred to in the report of the Standing Committee. Some activities are described in more details by the Secretariat as follows:

- New regulations relating to the association. Decree 88 on administration of the associations by which the associations are subject to direct administration by the Non governmental organization Department under the Ministry of Interior. The specialized administrative body of VPA is still the Ministry of Transportation. In respect of foreign relations, VPA is to report to the Central Foreign Relations Committee for direct guidance. In addition, the Chamber of Commerce and Industry of Vietnam (VCCI) has been appointed as coordinating agency between the associations and the State and VCCI has also been playing the role of Vietnam employers' representative. The Law on association is expected to be reviewed for promulgated based on Decree 88.

- Inputs given to the State on matters relating to the ports: recently, the Association has performed well the advisory role to the State on relevant decision, policy based on the comments from member ports. However, the inputs from member ports have not been completed and on time. The reasons were that the subjects are rather extensive and complicated at macro level and on the other hand the timing is normally too short and the hard materials and communications by mail took so much time.

- Contribution to stabilize the market. In 2007, 2008 the Secretariat together with the Tariff sub-working group in HCMC area have met and agreed on some minimum rates for port services by commodity and handling operations belonging to the negotiable group (domestic tariff) and rates for container on international shipping. Recently, due to surge in prices, land rental also rose some ports have announced adjustment in tariff but container handling charges are still much lower than the THC levels announced by the shipping conferences.

            In recent past, ports which have maintained productivity, quality and reasonable prices have also retained prestige, market share and advantage on development and competition potentials. However, service charges for container on domestic transportation are still low as compared to those on international transportation and in the future, there should be roadmap and measures to come up to unified pricing for domestic and international transportation.

- IT application. Following the general plan and based on their own requirements, many ports have recently focused more in IT application for port management and operations with outstanding achievement at Hai Phong, Cai Lan, Sai Gon, Saigon New ports. For large container shipping lines, a container terminal operations system with features to exchange information in EDI with shipping lines is required. On the other hand, e-mail is becoming vital communications tool with the outside replacing gradually other media such as mail, fax. One of the many issues the ports have to consider is the software licenses mostly for Microsoft products.

- The website of the association: in the past few years, the website has been refined gradually with more information to meet the demand of the member ports and other subjects. In coming months, the Secretariat will have more contents and services for VPA website. By this, we would like to propose member ports to make use of website, e-mail, internet connections as means of improving business, marketing and also to better communicate with other ports. The VPA website address is www.vpa.org.vn
 - On-line forum on VPA website. Can be used to give opinions on draft of legal documents as requested by the Government and maritime agencies and for other purposes such as reflecting the situation, exchange of information and experience, cooperating for solutions to common matters. Currently, the on-line exchange and cooperation community wide is an effective and fastest way to coordinate for quick solutions to arising issues, particularly for the associations.
- International economic integration. This is a domain of activities and also a strong point of VPA. Based on the general requirements and plan, VPA has participated actively in APA annual events. In 2007 -  2008, the association has sent many delegations to APA events such as sports meet, port development seminar, working committee meetings, annual meetings of APA. VPA also has organized the 30th APA Working Committee Meeting in HCMC and plan to host the 34th APA Annual Meeting by the end of 2008.

            Recently, more and more ports have actively participated in activities of international economic integration. This is pre-condition for the ports of Vietnam to gain more integration strength in resolving common issues of the ports in the region, promote development cooperation on wider scope thus to gather information facilitating the active economic integration.

 - Publication of Shipping Times magazine. From April 2005 to date, VPA together with HGP company has published 16 issues of magazine distributed free of charge to member ports and enterprises within the maritime sub-sector to serve the demand on information and business promotion and obtained wide recognition and support. VPA will apply for permit to publish a maritime commerce magazine (Shipping Times) as the official media of the association and also integrate Shipping Times in VPA website.

 - Organization of VPA annual meeting. To coordinate with the host port Nha Trang to organize the annual meeting 2008 in Nha Trang City.

6.  Tasks to be fulfilled

Based on the program and content of activities approved in the last meeting and plan with major tasks to be fulfilled mentioned in the report of the Standing Committee, major tasks to be executed as expected by the Secretariat are as follows:

1. Routine and scheduled tasks to be continued:

- Development of member, management of membership fee with attention to major ports still to join.

- Participation in port related programs as required by the State, maritime administration, in particular to advice on policy, institutional measures relating to the ports

- Participation in port service tariff control, stabilization and promotion of a sound market, capacity building to execute functions and duties entrusted by the State to specialized associations.

- Collect and dissemination of information, reflecting the situation

- Refine and operate effectively the VPA website, serving the demand of the ports with attention to the increased demand in information, marketing, international economic integration etc.

- Maintain and promote the relationship with APA, ASEAN and other organization, regional community as planned and directed by the Standing Committee.

2. New tasks to be implemented, including:

- Employ outside experts and from member ports to study some subjects related to market, pricing, management mechanism, current situation and measures to build up competing capability, integration of Vietnam ports using VPA budget.

- Support member ports on information, cooperation opportunities, business development, economic integration, human resources development up to new demand

- Prepare and cooperate for organizing the meetings next year in particular the Annual Meeting 2009, meeting of the Standing Committee, working groups as required

- Support the member ports on standardization including the port code and commodity code, application of IT in management and operations of the ports, more frequent exchange of information using e-mail, web forum ...

- Organize the collection and report of statistics on cargo volume, container throughput more updated every 6 months instead of one year, for analysis and reporting, planning purposes.

- Organize the business promotion, marketing activities for Vietnam ports hosted by VPA in Vietnam on a self sufficiency basis.

- Apply for permit, organize, develop the Maritime Commerce (Shipping Times) magazine including the VPA official electronic paper

- Execute other tasks as required

            As presented in the foregoing sections and based on the projected activities, the Secretariat has prepared the budget for 2009 enclosed in Annex 2 to seek comments from the Meeting. This is a budget plan; all spending shall be based on the situation and actual demand as approved by the Standing Committee.

            Ladies and gentlemen

            Above is the summary report of major tasks and comments, proposals made by the Secretariat. We suggest the Standing Committee and the Meeting to review, evaluate, give specific comments for the works of our association to be carried out after this. The Secretariat also proposes the member ports to participate more actively in the activities of the association as well as to support the Secretariat in fulfilling the works with increasing volume in coming months to meet the general requirements and those of each particular member port.

On this occasion, the Secretariat sincerely thanks the organizations, entities and individuals within and outside the association for the trust and active support extended in helping the Secretariat to fulfill its duties in the past. We hope that the Secretariat shall continue to receive the kind attention and precious support for more effective cooperation in the future.

Thank you and best wishes of very good health to all distinguished guests and delegates, great success to the Meeting.