Yangon city. — Photo demotix.com

by Le Hung Vong

Economic ties with Myanmar are expected to strengthen following the visit to Viet Nam by the Speaker of the National Assembly, Thura U Shwe Mann, earlier this month.

Speaking at a meeting with the Association of Vietnamese Investors in Myanmar (AVIM) on September 7, the speaker hoped that AVIM would act as a link between the two ASEAN members, bringing more Vietnamese investors to Myanmar, especially in agriculture, tourism and hospitality, and finance and banking.

He said Myanmar had been accelerating reforms and opening up its market to usher in economic development and improve people's living standards.

Viet Nam and Myanmar have taken measures to promote co-operation in a wide range of fields — from agro-forestry, aquaculture, transport, and energy to health care and culture — as well as co-ordinated at international and regional forums such as ASEAN, the Greater Mekong Sub-region and the Cambodia-Laos-Myanmar-Viet Nam co-operation mechanism.

Myanmar has issued licences to 56 Vietnamese projects with an investment of over US$600 million.

Viet Nam is targeting over $1 billion worth investment by 2015 and $2-2.5 billion by 2020 as the country is emerging as a hotspot for foreign investment.

According to Tran Bac Ha, chairman of AVIM, members of the association were seeking to enlarge their investment in Myanmar to $1.5 billion, making Viet Nam one of the five top investors in that country by next year.

He said efforts had been made to increase bilateral trade to $650-700 million and the number of Vietnamese travellers to Myanmar to 35,000 by next year.

To achieve these targets, AVIM suggested that Vietnamese lawmakers and Myanmar should create a more liberal legal framework and preferential policies for foreign investors and confirm ownership of assets by Vietnamese investors in Myanmar.

AVIM also wants to see Myanmar facilitate and speed up licensing for Vietnamese investors in areas like textile and garment, agriculture, health, energy, production of construction materials, and finance and banking.

New air route

Minister of Transport Dinh La Thang has instructed the Civil Aviation Authority of Viet Nam (CAAV) to work with relevant agencies to sort out problems facing the proposal on a direct flight path between Ha Noi and HCM City so that it could start from October.

He also instructed the CAAV to verify reports that said the new route would only reduce the distance by 85 kilometres and flying time by five minutes.

"Experts have assured that [it] can help reduce the flight time by eight to ten minutes"

The general director of the Viet Nam Air Traffic Management Corp said the reduction in flying time and distance depends on a number of technical conditions, especially aircraft's trajectory, and so the figures are reasonable.

Representatives of Vietnam Airlines and VietJetAir, which did the simulated test flights, recommended the new route, saying it is beneficial.

The CAAV said there were three issues: aircraft should be allowed to fly at a high altitude above clouds over Lao airspace to save fuel; authorities should reorganise the airspace so as to not affect military areas in Tho Xuan in Thanh Hoa Province and Bien Hoa in Dong Nai Province and the no-fly zone in Ha Noi; and Vietnam needs to negotiate with Lao and Cambodian authorities to reduce transit fees.

Broadening bio-fuel sales

Bio-fuel E5 will be sold widely in HCM City from December 1, but it is not cheap enough to become popular with vehicle owners. It costs the same as Ron 92 petrol.

The use of ethanol-blended gasoline releases less toxic fumes, according to the Directorate for Standards, Metrology and Quality.

While A92 petrol releases more than 700 parts per million (ppm) of toxic carbon monoxide gasoline containing 10 per cent ethanol only releases 400 ppm.

E5 Ron 92 also performs well, enabling rapid acceleration while not affecting the engine in any way, according to the Ha Noi University of Technology's internal combustion engine laboratory.

Nguyen Anh Toan, deputy director of fuel distributor PV Oil, said 242 of his company's filling stations around the country, including 21 in HCM City, are slated to supply E5 as required by the Government.

"In the past fuel firms faced challenges in selling bio-fuel because customers were not aware of the benefits of using bio-fuels," Sai Gon Giai Phong (liberated Sai Gon) newspaper quoted him as saying.

"However, the number of customers using bio-fuel is on the rise."

Dang Vinh Sang, general director of Saigon Petro, said in 2010 when traders began to supply E5, it became popular in the city because people were aware of the benefits of bio-fuel and taxi drivers got a VND100 discount per litre.

But when some vehicles caught fire, many began to wonder if it had something to do with the bio-fuel.

Sang dismissed the notion, saying the fires were caused by poor-quality fuel smuggled into the country.

Saigon Petro and other fuel wholesalers want E5 to be sold like in Quang Ngai Province and stop distributing A92 from December. The bio-fuel has been sold at all 150 filling stations in the central province since September 1 this year, the country's first province to do so.

Quang Ngai began selling the fuel on a pilot basis in August at the same price as Ron 92.

According to the HCM City Department of Industry and Trade, since a pilot scheme for selling E5 was begun in October 2010, only 29 filling stations (out of 504) in the city have been selling it.

Fuel traders have pledged to sell it at another 29 stations by year-end.

The fact of the matter is that many filling stations in the outlying districts of Hoc Mon , Can Gio, and Cu Chi have had to stop selling E5 due to losses in the last four years.

Fuel wholesalers are now awaiting clarifications from the Ministry of Industry and Trade on E5 distribution to know if distributors and agents will get any support and the price mechanism for E5 will be different from that of other fuels.

Wholesalers said selling E5 is costlier than the standard A92 petrol, and they cannot force agents to sell the bio-fuel if they make little profit.

They said E5 and A92 should not be available at the same filling stations because retailing various types of fuels would make it costly since more pumps need to be installed.

Le Ngoc Dao, deputy director of the department, said his department would urge the ministry to issue a guiding document on specific mechanisms and support for firms selling E5.

The department wanted to know if oil distributors can supply sufficient E5, but none of them could answer that question at a recent meeting since no one knows how much demand there is for the bio-fuel.

The department wants to have one or two stations in each district selling E5 by year-end.

The Government has decided that the fuel will be sold in Ha Noi, HCM City, Hai Phong, Da Nang, Can Tho, and Quang Ngai and Ba Ria – Vung Tau provinces beginning on December 1.

All provinces and cities in the country will have to sell the fuel from December 1 next year. — VNS