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Market Plans

Vietnam Environmental Export Market Plan
Chapter 7 - Solid Waste

Current Trends

Vietnam's National Environmental Agency (NEA) estimates that 19,315 tons of solid waste are created daily in the country's Vietnam's urban and industrial areas. NEA breaks down this waste as follows:

Industrial waste: 10,162 tons
Hospital waste: 212 tons
Municipal waste: 8,665 tons

Vietnam is only able to collect about 50 percent of the total waste. City-based companies are responsible for collection and management of solid waste. For example, in Ho Chi Minh City, the City Environmental Company (CITENCO) is responsible; in Hanoi, it is the Urban Environmental Company.

Hanoi is the only city that has a sizeable composting factory, but it accounts for only a small percentage of total waste generated. Ho Chi Minh City used to have composting facilities with equipment supplied by Denmark. The city discontinued its use of the factory in 1991 and now uses landfills. In general, most smaller cities have not built dump sites. Uncollected waste in cities tends to accumulate in drains, canals, and rivers, polluting the waterways, causing restricted flows and contributing to flooding during the rainy season.

Ho Chi Minh City produces the most solid waste in the country. Each day, some 4,000 tons of solid waste are generated. This amount is forecast to increase to 5,500 tons a day by 2005. Only 40 percent of the waste is thought to be collected and treated or disposed of properly. The city spends an estimated 40 billion dong ($3 million) on solid waste collection and disposal annually.

Most solid waste is collected by handcarts and delivered to 380 collection points in the city. The waste is often stored at these collection points for a day or longer, presenting environmental hazards and foul odors around these sites. The waste is then transferred to two transfer stations. The station in District 11 has a capacity of 500 tons/day. The station in Go Vap district has a capacity of 700 tons/day.

Finally, the waste is disposed of by dumping at three primary fills. Forty-eight percent of the total waste goes to the Dong Thanh dumping ground at Hoc Mon, north of the city. The Ho Chi Minh City Waste Treatment Company estimates that 3,000 tons of solid waste each day are buried at this 25-hectare field. Approximately 20 percent of the waste is dumped at the Go Cat landfill west of the city, while 17 percent goes to a privately operated site at Vinh Loc.

Landfill management in Vietnam usually consists of digging a hole, dumping the garbage, and covering the pit with a layer of clay. Water penetrates the clay layers, however, and both leachate water and rain water enter landfills before they are covered. This system causes both ground water pollution and soil pollution.

Most of the sites are open to scavengers that pick their way through the mounds of rubbish. During the dry season, the clay layers tend to burst open at the surface because of pressures from biogas generated in the covered landfills. Five-foot high flames are occasionally seen erupting from the surface of the landfills.

Most landfills have no wastewater treatment systems, although some of the larger ones have installed primary systems to treat effluent waters. In urban areas, residents living near these landfills source their water from wells that are likely contaminated by water leaking from the dumping sites.

In Hanoi, the waste collecting and disposal systems are believed to remove only 60 to 65 percent of the city's daily solid waste. The government made some progress on this front in May 1999, when it upgraded one of its dumping sites in Nam Son commune, Soc Son District, outside Hanoi. The upgrade included a 3.3 kilometer access road and construction of four dumping zones on the 13-hectare site. The Nam Son dumping ground now handles an estimated one third of Hanoi's daily waste.

Hanoi's only solid waste treatment plant is in Cau Dien, which processes waste into micro-biological fertilizer. The UNDP-funded plant is capable of converting 30,000 tons of solid waste a year, which is only 5 percent of Hanoi's annual total. The rest is buried in landfills.

In 1999, the government approved a project to upgrade Cau Dien Waste Treatment plant with Spanish assistance. The $400,000 investment will raise the capacity of the plant to 50,000 tons of waste annually. Another $17 million waste treatment plant, with a capacity of 250,000 tons and producing 66,300 tons of fertilizer a year, is scheduled to be built in Soc Son district over the next two years.

Biomass Projects

Several proposals for building biomass power plants or waste conversion plants have been submitted to the government. Most recently, an American-British consortium of Premier International Trading &Consulting (U.S.), Enviro-Control Ltd. (U.K.), and AS-C Materials Handling Ltd (U.K.) have proposed building a $106 million build-operate-transfer (BOT) power plant fueled by waste generated in Ho Chi Minh City. The plant would process waste at $2.00 –$2.50 per ton to fire a 12 megawatt power plant. The project sponsors would sell electricity to Electricity of Vietnam at $0.06 per kilowatt hour. The plant would also produce 300,000 tons of fertilizer per year.

Since 1996, Ho Chi Minh City authorities have been considering a biomass project proposed by Canada-based Pourslo Systems, Inc. Pourslo has made little progress since it made its initial proposal to use waste at the Hoc Mon dumping ground to fire a 100 megawatt power plant. The $175 million BOT project would burn 1,500 tons of waste per day at a cost of $1.50 per ton. Pourslo would then sell electricity to Electricity of Vietnam at a rate of $0.045 per kilowatt hour. The project is still pending approval from the Ho Chi Minh City People's Committee.

Market Opportunities and Competitive Situation

Hampering the development of solid waste treatment is the Vietnamese government's reluctance to introduce or raise waste collection and disposal fees. Without official charges for these services, foreign invested projects are not commercially viable. In addition, BOT projects have proven extremely difficult to implement in Vietnam because of a weak legal infrastructure.

Vermeer Group of the Netherlands is in the advanced stages of negotiating an agreement to build a landfill at Go Cat, near Ho Chi Minh City. The project would be financed by a grant from the Dutch government. The agreement has not yet been signed, in part, because the Netherlands is requesting that waste collection/disposal fees be introduced as part of the project.

Foreign investors, including several U.S.firms, are watching the deal closely for the precedent it may set if the central government agrees to the service charges. Negotiations for the $106 million Premier waste-treatment BOT, for example, will likely regain momentum if the Vermeer deal is completed successfully.

HCMC Environment and Sanitation Improvement

The Asian Development Bank's Ho Chi Minh City Environment and Sanitation Improvement project includes a solid waste component. The total cost for the solid waste portion of the project is estimated at $63.6 million. The project focuses on improving the efficiency of primary collection by supplying garbage bins and carts, garbage trucks, compactors, and containers and by building new transfer stations. The project will also finance construction of a new landfill on a 130-hectare site next to the existing Dong Thanh site. The new site would be capable of handling disposal needs at Dong Thanh for at least 10 years.

Three Cities Sanitation Project

The World Bank is financing $80.5 million of a $119.5 million project to upgrade the drainage and sewerage infrastructure in Danang, Haiphong, and Quang Ninh (Halong City and Cam Pha). Although prequalification for bidding on these projects has been completed, opportunities may exist for suppliers to the project's contractors.

The project will upgrade sewerage and sewage treatment, drainage, and foster administrative reform within the cities' sanitation and drainage companies. There are solid waste components to each project, with special emphasis placed on administrative reform of Danang's solid waste management.

Case Study 7.1 Tapping State Resources
Several U.S.firms are exploring opportunities to build landfills in northern provinces. The companies - Envirotech and equipment supplier Red River, Inc. - have worked with a marketing office for the state of Oklahoma's trade office in Vietnam. Oklahoma is one of the few states to have opened trade offices in Vietnam. It did so largely to focus on opportunities in the oil and gas industries. Pacific Ventures, Inc. is the marketing office assisting the Oklahoma companies with market entry.

Envirotech and Red River representatives first came to Vietnam on a trade delegation in January 1999. The firms later won a $25,000 grant from the National Association of State Development Agencies (NASDA), to return in March 1999. On this trip, the two firms held seminars and conferences on solid waste disposal and landfill technologies. Following the conference, officials from Hai Duong and Bac Giang provinces approached the companies and asked them to prepare proposals. The NASDA grant also financed the feasibility studies carried out in the two provinces.

Current solid waste disposal in these provinces consists of digging a hole and burying the garbage. The landfills do not use any layering techniques or measures to prevent against leakage. As a result, contamination of ground water and foul odors are degrading the environment in the surrounding areas. Envirotech has proposed building landfills using layering and containment technologies. Envirotech specializes in consulting and design, while Red River leases associated equipment, so it is likely the two will team together for the projects. The contracts, estimated to be worth between $500,000 and $1 million, have not yet been signed but are said to be "on the desks of the provincial chairmen" and ready for signing.

In January 2000, Pacific Ventures hosted a delegation from the Southern States Energy Board, which was visiting Vietnam to explore opportunities in clean energy and renewable energy production.

Bilateral Aid Projects

The Netherlands is involved in two solid waste projects in Ho Chi Minh City. The Go Cat Landfill Project in Hoc Mon District is being implemented by the Dutch firm Vermeer Contractors Group and the Ho Chi Minh City Waste Disposal Company.

A final agreement on participation by Vermeer is pending. The project would develop a new 25-hectare site at Go Cat with a capacity of 4 million tons of solid waste and be able to handle all of the city's waste from 2001 to 2003. Land for the project has been acquired and preliminary designs are completed.

The new site at Go Cat would include bottom, side, and top layers of polyethylene, a drainage system, vacuum welding, a wastewater treatment plant, and gas wells for extracting biogas. The gas will later be used for power generation. Vermeer has already contacted potential equipment suppliers for the project, including some from the United States.

A solid waste management project in District 10 has been proposed by the Dutch firms, Peja Export BV and ARA NV. The Ho Chi Minh City Environmental Company is the local implementing agency. The final grant agreement for the project is still being prepared.

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