Saigon Hi-Tech Park and Vietnam Infrastructure

July 4, 2007

In this exclusive and in-depth interview, VentureOutsource.com speaks with Saigon Hi-Tech Park (SHTP) president Nguyen Dinh Mai about the Park and Vietnam's infrastructure and developing electronics industry. Mr. Mai Nguyen talks about some of the challenges facing Vietnam and SHTP and shares thoughtful insight into what's being done to further develop Vietnam's infrastructure, increase foreign direct investment (FDI), encourage multinational corporations (MNC) to set up business operations with SHTP, electronics industry trends, and more. Transcripts from that discussion follow.

VO: Vietnam continues to attract technology company business and investment. Meanwhile, the country predominately relies on hydroelectric power for electricity which can be vulnerable to weather conditions. The electronics industry has a high electricity consumption rate and some shortages in electricity have occurred in Vietnam in recent years. What can you share with executives interested in setting up businesses in Vietnam but may feel reluctant to do so because their companies may not have the resources required to invest in and create their own uninterrupted supply of energy or power, on-site?

Mr. Mai Nguyen: I can address this question from two different levels of perspective: the national level and the Saigon Hi-Tech Park (SHTP) level.

National level
We acknowledge Vietnam has been experiencing power shortages. This is due to the rapid development of multiple industries internal Vietnam in addition to rising electronics manufacturing foreign direct investment (FDI) - both which require a lot of power and thus also impact the country's competitiveness. To address the problem, the government has laid out a strategy to liberalize Vietnam's power sector and diversify power sources to make the country less reliant upon hydroelectric power.

Vietnam is gradually opening up so that by 2020, multiple entities - in addition to Electricity of Vietnam Group (EVN) - will have joined the market to help generate power and either resells their power to EVN for trading and retailing or sell it directly to end-users. This strategy, once fully implemented, will create a competitive retail power trade market in which customers, be they individuals or businesses, select power suppliers at their discretion based on supplier pricing; power quality, and reliability. Such an energy market will help guarantee power is generated and supplied from multiple suppliers at competitive costs to help meet growing economical demand.

Nguyen Dinh Mai - Saigon Hi-Tech Park (SHTP)

Nguyen Dinh Mai
President
Saigon Hi-Tech Park (SHTP)

In the meantime, although power generated by these additional entities is not yet allowed to be sold directly to end-users, the power can be resold to EVN (which ultimately increases Vietnam's total available power supply) thus partially addressing the energy shortage.

As for power ‘source' diversification to help Vietnam become less dependent on hydroelectric power, the following alternatives or, developments, are being considered or are already underway:

Build more thermal power plants and locate these power plants close to Vietnam's ‘material zones' rich in natural resources. This effort includes coal-driven power plants (predominantly in Northern Vietnam where coal is abundant) and combined cycle gas turbine (CCGT) power plants (along the coastal and Southern areas rich in oil and gas). The government is also drafting a feasibility study to develop Vietnam's first nuclear power plant (2,000 megawatts or MW) expected to become operational after 2015.
Purchase power from China, Laos, and Cambodia. EVN is constructing several power plants in Laos. The current power capacity result being routed to Vietnam currently is roughly 2,000 MW.
Create additional power using recycled materials and alternative energy sources such as solar and wind power. These energy source types can be used predominantly in remote and highland areas where the national grid has yet to reach.
Continue to build more hydroelectric power plants at all technically feasible locations with design emphasis placed on mini-plants. Taking the above into consideration, Vietnam's total hydroelectric capacity should be around 15,000 MW by 2020.