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Cablegate: Keep On Movin': Ambassador Promotes U.S. Companies to Meet

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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

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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

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