VZCZCXRO7577
RR RUEHCHI RUEHDT RUEHFK RUEHHM RUEHKSO RUEHNAG RUEHNH RUEHPB
DE RUEHHI #1308/01 3381123
ZNR UUUUU ZZH
R 041122Z DEC 09
FM AMEMBASSY HANOI
TO RUEHC/SECSTATE WASHDC 0526
INFO ASEAN MEMBER COLLECTIVE
ASIAN PACIFIC ECONOMIC COOPERATION
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHHM/AMCONSUL HO CHI MINH CITY 0230

UNCLAS SECTION 01 OF 02 HANOI 001308 
 
SENSITIVE 
SIPDIS 
COMMERCE FOR 4430/ITA/MAC/OPB/VLC/HPPHO 
COMMERCE PASS TO ADVOCACY CENTER 
US TDA PASS FOR DIANA ROSSITER 
STATE/EEB PASS TO OPIC 
 
E.O. 12958: N/A 
TAGS: EAID EAIR EFIN EINV ELTN ECON VM
SUBJECT: Keep on Movin': Ambassador Promotes U.S. Companies to meet 
Vietnam's Transportation Infrastructure Needs 
 
¶1. (SBU) Summary:  The Ambassador advocated on behalf of U.S. 
businesses in a November 30 meeting with Vietnam's Minister of 
Transportation, emphasizing that U.S. companies' technology and 
experience could play an important role in the development of 
Vietnam's transportation sector.  Ambassador also urged the 
Minister to increase personnel and resources necessary for Vietnam 
to pass an FAA safety audit required for direct flights to the 
United States.  End Summary. 
 
 
 
¶2. (SBU) The Ambassador highlighted the potential contribution of 
U.S. companies - with their world class technology and experience - 
in the development of Vietnam's transportation infrastructure in a 
November 30 meeting with Vietnam's Minister of Transportation Ho 
Nghia Dung.  Vietnam, with an estimated USD $200 billion in new 
infrastructure needs over the next five years, is actively courting 
Foreign Direct Investment (FDI) in infrastructure, particularly in 
the transportation sector.  The Ambassador noted that a number of 
U.S. companies have recently expressed strong interest in 
infrastructure projects in Vietnam.  For example, Raytheon has 
introduced to the Ministry of Transportation (MOT) smart highways 
technology, which allows charging freight on roads without toll 
booths.  Several U.S. locomotive engine providers have met with 
Vietnam Railways to discuss how they might assist in the upgrading 
of the Vietnamese national rail system, specifically in equipment 
and railway line technology.  U.S. companies are also interested in 
Vietnam's civil aviation sector:  John Bean Technology Corporation 
has submitted a bid to supply passenger boarding bridges at Danang 
Airport; Airis is vying to develop the second terminal at Hanoi's 
Noi Bai Airport; and GHS Aviation Group has submitted a proposal to 
provide technical assistance to upgrades of the aviation 
authorities' safety and inspection system. 
 
 
 
¶3. (SBU) On civil aviation, Ambassador urged Minister Dung  to 
increase personnel and resources sufficiently to meet  safety 
standards for eventual direct flights to the U.S., and encouraged 
him  to consider the proposal by GHS Aviation Group to assist with 
meeting those standards.  The USG has provided Vietnam's Civil 
Aviation Authority (CAAV) significant assistance in the form of a 
3-year TDA-funded Civil Aviation Oversight project.  Vietnam has a 
tough hill to climb to raise its oversight, certification, and 
inspection regime to international standards. 
 
 
 
Background 
 
---------- 
 
¶4. (U) Rapid economic growth has seriously strained Vietnam's 
physical infrastructure.  Long lead times from project planning 
through completion have raised concerns about the impact 
construction delays will have on the country's economic 
development.  Vietnam currently spends about 8-9% of GDP on 
infrastructure, mostly financed by Overseas Development Assistance 
(ODA); estimated demand is 11% of GDP.  Current GVN and ODA funding 
for infrastructure is inadequate to address the estimated $200 
billion in new infrastructure needed over the next five years. 
Capital needs for transportation infrastructure up to 2020 are an 
estimated USD $116 billion. 
 
 
 
¶5. (U) The USG provides a variety of assistance to help the GVN 
meet the country's infrastructure demands.  For example,   USAID 
has proposed private financing solutions to address the funding 
shortfall for infrastructure projects.  The U.S. and Japan are 
co-sponsoring a Study Mission to the Philippines December 6-10 for 
GVN officials to see how an operational infrastructure fund that 
combines ODA, state funds, and private investment is being used to 
finance water supply infrastructure.  In addition to the Civil 
Aviation Authority project, USTDA also funded an orientation visit 
to the U.S. about intelligent highways by GVN highway and 
transportation officials in August. 
 
HANOI 00001308  002 OF 002 
 
 
MICHALAK 
Michalak