The Vehicle Registration Crisis
The Vehicle Registration Crisis
And energy policy stasis
Good morning! Welcome to the latest Vietnam Weekly, and hello to all new readers. Next week I’ll publish another subscriber-only edition, this time on Ho Chi Minh City’s increasingly severe public investment paralysis. You can upgrade to a paid subscription for US$5/month or US$50/year below.
Just to follow up on last Friday’s newsletter, the deputy head of the Hanoi police department said small businesses and food vendors must move their operations into alleys, while people need to understand that sidewalks are places for pedestrians to walk. This will come as news to many people.
On to the news.
The Vehicle Registration Crisis
Back in January, I discussed the arrest of the Vietnam Register’s director on bribery allegations and the subsequent closure of almost 30 vehicle registration centers for investigation.
Since then, about 500 people from over 70 registration centers - mostly privately owned - have been detained nationwide for crimes including giving, brokering, or receiving bribes; producing and trading equipment and software for illegal use; and unauthorized intrusion into computer networks.
Local media is devoting increasing coverage to the topic, as the crackdown has created a crisis: 59 out of Vietnam’s 281 registration centers are currently closed.
This may sound rather boring compared to the fireworks of the Viet A or repatriation flight scandals, but the impact is real: kilometer-long lines are blocking roads and neighborhoods near the remaining registration centers; drivers for tour bus companies are waiting in line for nearly two weeks to register their vehicle so they can legally drive; transport companies are bleeding money because drivers have to sleep overnight in trucks; drivers in HCMC are living off instant noodles and spending days in their car/truck; and people are hiring third parties to handle registration for them. Some drivers, after spending days in line, have to do the process all over again if a fault is found in their car.
So how did we get here?
VnExpress has a good breakdown (in Vietnamese): way back in October, police officers in HCMC stopped a truck and discovered errors in its registration data, which led them to illegal activity at the registration center it was approved by.
The first arrests took place in mid-December, and investigations spiraled from there, uncovering an entirely rotten system leading to the top of the Vietnam Register.
Now, workers at open centers are putting in 12-hour days and being reminded at the start of every shift that they cannot accept money or gifts. One employee told the news outlet that he and his colleagues all have the same fear: they don’t know whether they’ve violated a rule or not.
They have also been ordered to be stricter in registration inspections, meaning 35% of vehicles are now failing their tests, compared to 15% before - with some drivers having to return seven times.
The situation is so dire that reinforcements have been called in: 26 traffic police officers were brought into HCMC registration centers this week. About 100 traffic police nationwide are now assisting with vehicle registration.
Perhaps most incredibly, the Ministry of National Defense has deployed up to 40 soldiers to help with registrations following a request from the Ministry of Transport.
But it seems like the pain will continue: 50,000 vehicles in HCMC alone need to be registered this month, a figure that will rise to 80,000 in April - currently, the city can only process 1,600 vehicles per business day (in a month with 20 business days, that’s 36,000 vehicles).
In response, the transport ministry has proposed relaxing penalties on vehicles with an expired registration, though that is probably a whole other can of worms.
There is no sign of when shuttered registration centers may reopen, and presumably further arrests and closures are likely. This is just the latest example of how challenging it is to address systemic graft: cleaning up the registration process will hopefully create more transparency (and safer roads?) in the future, but when the whole network is built on bribery, it’s going to nearly collapse if that grease is removed.
And, sadly, everyday folks end up being badly hurt by that collapse.
Energy Inertia
Vietnam’s energy policies (or lack thereof) continue to get attention from both international and domestic media. I touched on the noticeable shift in coverage of the country’s energy prospects - from glowing to skeptical - back in November.
The tenor improved somewhat the following month when the US$15.5 billion Just Energy Transition Partnership (JETP) was announced after appearing dead multiple times.
But it’s now clear that a lot of enthusiasm for Vietnam’s once-envied renewable energy development has vanished.
The overarching reason why is that Power Development Plan 8 is still nowhere to be seen - I’ll share my China Dialogue story from July 2020, when PDP8’s release appeared imminent, one final time. I recently read somewhere that it may not be completed until 2024, meaning another year of Vietnam not having a legal framework for its energy system.
About that recent coverage: here’s a Bloomberg feature titled ‘Enough Wind Power for a Major City Snarled in Vietnam’s Red Tape, while VnExpress ran ‘2-year ‘legal gap’ lingers as rooftop solar systems stay disconnected from national grid.’
This week, 36 renewable energy companies sent a joint letter to Prime Minister Phạm Minh Chính lamenting the lack of pricing mechanisms for solar and wind power, noting that 34 completed projects (28 wind farms and six solar farms) costing a total of US$3.6 billion are sitting idle because there is no way for them to sell power to EVN. The solar projects have been waiting for over 26 months.
The companies are concerned about the prospect of bankruptcy since they cannot sell power and relied on bank loans for much of the construction funding.
Meanwhile, Viet Nam News reported that EVN is increasing its use of coal and gas for electricity generation, with thermal power making up 42.7% of the supply in February. Keep in mind that EVN has warned it may run out of cash by May after two years of enormous losses.
JETP, which didn’t receive a ton of domestic attention in the first place, has vanished from local coverage, and Chính’s much-lauded commitment to net-zero emissions by 2050 feels like a distant memory.
This China Dialogue piece from a pseudonymous author deftly lays out some of the high-level reasons behind Vietnam’s worrying lack of movement on energy. It also hints at a new investigation into renewable energy policies, which is something I’ve heard whispers of as well - if such an investigation exists, renewable developers face a long road.
Extra Links:
As livelihoods clash with development, Vietnam’s Cần Giờ mangroves are at risk (Mongabay)
Go Through Centuries of Ceramic History at Hanoi's Bát Tràng Museum (Saigoneer)
Vietnam’s export prowess turns to excess (Reuters)
The Green Giants of Viet Nam’s Coast: A Journey of Mangrove Revitalization (UNDP Viet Nam)
Have a great weekend!
Mike Tatarski
