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Australian water industry finds opportunities in Vietnam

Australian water professionals are playing a vital role in helping the Vietnamese water sector move away from a reliance on aid funding towards a market-oriented industry.

With a population of nearly 100 million, Vietnam is one of the world’s fastest growing economies. It is currently working towards the goal of becoming an industrialised nation by 2020 and is facing the commensurate challenges of a growing population, rapid urbanisation, increasing industrialisation, coupled with the uncertainty of a changing climate.

These challenges are putting pressure on the country’s water sector, which Australian Water Association (AWA) International Manager Paul Smith said is changing rapidly, in part due to a number of targets the Vietnamese Government has set out for the sector to achieve.

This includes all water utilities moving from government-owned water utilities to enable private sector ownership by the end of 2019 and all utilities delivering safe drinking water by 2020.

“That’s less than two years away and currently only one utility – Hue Water Company – claims to deliver drinking water to its customers’ taps,” Smith said.

“This means there are many water utilities that are rapidly lifting their service standards and upgrading assets to achieve drinking water quality.”

The WA Water Corporation has been supporting Hue Water to achieve this through the AWA’s Vietnam – Australia Water Utility Improvement Program.

The Vietnamese Government also wants to see an increase in the amount of wastewater treated, from the current level of 10% to 50% by 2022.

“At the moment 90% of wastewater generated in Vietnam is not treated and is discharged directly into waterways. These are the same waterways that are extraction points for Vietnam’s drinking water,” Smith said.

“That’s an insight into the huge transition Vietnam’s water sector is going through, and something the Australian water sector is supporting them with.”

From aid to trade

The AWA supports the Vietnamese water sector through both aid- and trade-related work. On the aid side, this includes building a bridge between Australian innovation and the demand for new technologies in Vietnam that improve essential services.

For example, in a remote village in the Son La Province near the Laos border, the AWA worked with the Australian Government to pilot innovative membrane water treatment technology to provide the community with access to low-cost, safe drinking water.

“What makes the AWA so happy with our work in Vietnam is we’re not only facilitating trade by profiling Australian technology in these initiatives, we’re lifting the prosperity of these otherwise poor communities so they can have a better life,” Smith said.

Trade is becoming increasingly important to the Australian-Vietnam relationship. In March this year, the Australian and Vietnamese Governments signed a strategic partnership committing to deepen the bilateral trade and investment relationship.

“Australia and Vietnam’s relationship is transitioning from one that has been principally aid focused, where Australia provides aid to Vietnam, to an economic partnership,” Smith said.

“Our approach is to build the capacity of Vietnamese water utilities to support their reform objectives as they transition towards a market-oriented water sector, while also supporting the enterprise partnerships between Vietnamese and Australian private sector companies.”

Business opportunities

For Australian water professionals looking to do business in Vietnam, the country’s annual water industry conference, Vietwater, is an important event. The AWA has taken an Australian delegation to the conference for the past four years, with this year’s group of over 100 water professionals the largest yet.

The delegation met with the Australian Ambassador to Vietnam Craig Chittick, who said there is enormous potential for water businesses in Vietnam.

“I see the Australian delegation’s participation at Vietwater’18 as a key platform in building a closer economic partnership between our two countries’ water sectors,” Chittick said.

“The growing investment and trade links between the Australian and Vietnamese water sectors indicate there is strong demand for Australian expertise and technological innovation.”

Smith said there has been about $40 million worth of trade deals done between the two countries in the four years the AWA has taken a delegation to Vietwater. This includes Australian businesses locating manufacturing capacity in Vietnam or importing innovative Australian technology into the country.

“We’d like to grow this to well over $100 million in trade activities between our water sectors over the next 12 to 18 months,” Smith said.

“With the targets set by the Vietnamese Government for their improved service delivery, we think that’s quite achievable.”

Going forward, Smith said the AWA would continue to help connect the two countries’ water sectors.

“We see our relationship with Vietnam as critical, not only to the prosperity of Australia and Vietnam, but for the two-way trade we see growing substantially,” he said.

“We will continue to support the Australian and Vietnam Government’s objectives for transitioning our relationship away from an aid paradigm to a trade and economic partnership.”

Check out the Australian Water Association's Vietwater'18 trip here.

To learn more about the Australian Water Association's involvement with the Vietnamese water sector, click here.