HCMC's Troubled Airports
HCMC's Troubled Airports
And VinFast's EVs arrive in America
Good morning! Welcome to the last Vietnam Weekly of the year. I’m sending this out a day early as I need to finish packing for my flight tomorrow. After leaving the warmth of Ho Chi Minh City, I’ll be landing in temperatures of about -9 C (that’s 15 F). There won’t be a newsletter for the next two weeks; the two weeks after that will depend on my schedule.
You can subscribe to the newsletter to receive new editions in 2023 below.
There’s plenty to get to today. Let’s go in order of most negative to most positive.
On to the news.
Long Thanh is in Trouble
This week, the outlook for Long Thanh International Airport in Dong Nai took a massive blow.
The timeline was already in rough shape since a chunk of land needed for the megaproject still hasn’t been handed over, even as officials push a remarkably (absurdly?) ambitious schedule: the Ministry of Transport has demanded that the facility’s first flight must take off no later than September 2, 2025.
Here’s what the site currently looks like:
On Sunday, the Airports Corporation of Vietnam (ACV) announced that it had canceled a US$1.5 billion bidding package to design and build the passenger terminal of Long Thanh’s first phase.
This package is expected to take 33 months to execute. Only one contractor submitted bidding documents and its dossier “failed to meet the requirements as per Item 1, Article 17 of the Bidding Law.”
A new bidding process must now take place, which will take a minimum of 45 days. Construction needed to start this month if there was even an inkling of hope of making that September 2025 deadline.
That timeline hasn’t officially changed, but the writing is on the wall: there’s no chance Long Thanh will open in three years.
Meanwhile, Tan Son Nhat, which Long Thanh is supposed to relieve pressure on, will have to handle 10% more passengers this Tet than it did in 2019. This comes out to about 130,000 people daily, including an estimated 144,000 passengers on January 29 (mostly domestic).
Planes will operate throughout the night, with 44 flights per hour scheduled - the most TSN has ever handled.
Recently, there’s been a lot of coverage of the miserable experience at the airport’s domestic terminal, with every arrival and departure step marred by huge crowds, creaking infrastructure, and strained service. TSN’s leaders have pre-emptively asked for understanding from passengers and more or less admitted that Tet will be terrible there. So good luck if you’re flying.
ACV “proposed” beginning construction of Terminal 3 this weekend (what a Christmas present!) after months of missed land handover deadlines and negotiations between HCMC and the Ministry of Defense. I don’t know why this has to be proposed - seems like the sort of thing you either do or don’t.
The desperately needed T3 is scheduled to open in 2024 but…well you know the drill when it comes to opening dates for major projects.
Taken together with the troubles Long Thanh is facing, it’s not hyperbole to say that flying in and out of HCMC will suck for years. (And this is with international traffic through TSN still at a fraction of its pre-pandemic self.)
In one hint of good infrastructure news for the city, the metro line’s first test run took place yesterday, with a train traveling 9km up and down the tracks. While that is exciting, we’re still at least a year away from the route opening to the public.
A Squandered Tourism Year
After much hemming and hawing, Vietnam reopened to international tourism in mid-March and dropped vaccination/testing requirements well before its Southeast Asian peers.
Nonetheless, the country ranked last in Asia in terms of international tourism recovery in a recent survey and is expected to hit about 3.5 million foreign arrivals on the year, well below the goal of 5 million.
Thailand, meanwhile, saw over 10 million international arrivals. Indonesia and Singapore also beat their annual targets.
The problems facing international tourism in Vietnam were discussed at a conference last Friday, with the usual issues trotted out: zero-Covid in China, the war in Ukraine, global inflation, and the late reopenings of South Korea and Japan. But Thailand, Indonesia, and Singapore all operate in the same world and did far better.
Perhaps the biggest problem, then, is the same one that’s been discussed for months with no change: visa policies. Currently, 25 nationalities are privy to a 15-day visa waiver, compared to 65 nationalities for Thailand with a duration of up to 90 days. (Prior to the pandemic, Thailand’s arrival figures were nearly double Vietnam’s, so this isn’t a fair comparison, but tourism experts are right to point out how unattractive the latter’s visa policies are.)
Everyone else has to apply for a 30-day single-entry e-visa that can take significantly longer than the stated three-day processing time.
One official at the above-mentioned conference asked, “Who will take responsibility?” for the failure to take advantage of Vietnam’s early reopening - the answer is nobody.
Next year’s foreign tourist goal is 8 million (compared to a record 19 million in 2019), while there is no sign of visa changes coming despite repeated calls.
Domestic tourism, on the other hand, exploded this year, with 100 million visitors expected (I’m not sure how this figure is tallied). This would smash 2019’s record by over 11 million people.
Economy/Trade
Moving into the more positive section, we can’t end 2022 without another blockbuster tech manufacturing announcement: Foxconn, the top supplier for Apple, will start making MacBooks in Vietnam as early as next May.
AirPods and Apple Watches are already produced here, but the MacBook has taken longer to shift given its complexity. The tech giant has reportedly been testing this production for some time, and full-scale manufacturing would mark another major shift away from China.
Staying on trade, Vietnam is expected to become one of America’s seven largest trading partners this year, knocking the United Kingdom off this (arbitrary) list. US data shows that the UK’s share of American merchandise trade was 2.6% through October, while Vietnam’s was 2.7%.
At the Vietnam Economic Forum on Saturday, Prime Minister Pham Minh Chinh said that the economy will continue to face challenges in 2023 while also hailing the successes of 2022 despite significant global headwinds.
Keep an eye out for the annual GDP growth announcement in the coming days/weeks, which the government will undoubtedly tout - especially if they hit their target of 8%.
VinFast Arrives in America
Let’s close out with exciting news for VinFast (with some caveats).
According to a press release, the giant ship carrying 999 of the company’s EVs arrived at San Francisco’s Port of Benicia on Wednesday, 26 days after departing Hai Phong.
VinFast says they will begin delivering these cars to California customers by the month's end.
I asked a company PR rep whether the vehicles (called the VF 8 City Edition) have been approved for use in America and was told, “We will sure have all the necessary licenses and approvals for the vehicles to be sold, delivered and driven when the customers receive their cars.”
I had this question after reading the very critical (fairly, I think) Jalopnik feature by Kevin Williams titled ‘The VinFast VF8 Is Simply Not Ready for America’ published last week. (I highly recommend reading that - it made quite a splash.)
At the end of his piece, Williams wrote: “the cars have not yet received CARB EO certification, which is required before vehicles can be delivered to customers in California or any other state that follows California’s vehicle regulations.”
The VinFast press release specifically notes that it has received CARB EO certification, a direct response to the Jalopnik story. And in a Bloomberg story published as I was writing this, VinFast CEO Le Thi Thu Thuy said, “We have received all necessary paperwork approvals to sell electric cars in the U.S.”
That appears to settle the issue. It will be quite something to see VinFasts being driven around the US soon. To any readers in California - let me know if you spot one!
Extra Links:
Is the Climate Crisis Leading to ‘Rupture’ in Southeast Asia’s Mekong? (United States Institute of Peace)
LEGO factory lays bricks for Vietnam clean energy transition (Context)
For Patrick Leahy, The Vietnam War Is Finally Ending (The New Republic)
The Cardboard Neighborhood (Blue Dragon Children’s Foundation - opens a PDF)
Learning About Life and Death From the Stories of Funeral Directors in Vietnam (Saigoneer)
Thank you so much for reading the Vietnam Weekly this year, and have a wonderful holiday season wherever you are! See you in 2023.
Mike Tatarski
Best of luck with the weather! It’s terribly cold in most of North America.
My evisa in late Sept only took 3 days to arrive in my inbox but I agree with the need for longer tourist visas. I would have easily stayed another couple of weeks if the visa was longer.
Thank you for the writing this year. I look forward to more of your reporting next year. Enjoy your trip and safe travels.
You now in Ho Chi Minh ?