Robert Hambleton wants to hear more noise from the huge container port outside his office near Ho Chi Minh City. Towering cranes at the next-door competitor are silent, without a ship on the horizon.

“It’s a brand-new terminal without any customers,” said Hambleton, general director of Cai Mep International Terminal Co. “You get a sense of how dire the situation is. The whole terminal industry is oversupplied.”

With companies from Intel Corp. (INTC:US) to Samsung Electronics Co. (005930) building billion-dollar factories in Vietnam, regional governments have established competing ports capable of handling overseas traffic, causing plunging rates and losses for operators estimated at $1.5 billion or more, according to Seaport Consultants Asia.

Vietnam, with a coastline of about 3,400 kilometers (2,100 miles) along one of the world’s busiest sea cargo lanes, has ambitions to compete with Singapore and Hong Kong. The government wants to build even more ports, emphasizing“quantity over quality,” a World Bank report in January said. The overcapacity may undermine Vietnam’s ability to attract more higher-value manufacturing that demands efficient transportation systems, the report said.

‘Corruption’ Possible

“Almost every province along the coast of Vietnam managed to have a port project,” Vu Tu Thanh, chief Vietnam representative of the U.S.-ASEAN Business Council, said in an interview in Hanoi. “The process allows for a lot of opportunity for corruption and special interests. Many of the good ports do not have enough business.”

Foreign investors may be deterred from investing large sums in future government infrastructure projects, David Wignall, managing director of Seaport Consultants Asia, said in an e-mail. “No one trusts anything the government says on development,” he said. Wignall estimates operators in Cai Mep alone have collectively lost as much as $1.5 billion because of terminal oversupply.

The losses at the port come as the Ministry of Transport seeks about $32 billion in private funding for transportation infrastructure projects through 2020, Vietnam News reported in February.

Global Slowdown

The oversupply of terminals at Cai Mep is tied to the slow global economy, not government policy, Deputy Transport Minister Nguyen Hong Truong said after attending a conference in Hanoi Feb. 28.

“The main issue that has affected the port’s operation is the global economic slowdown, which has significantly hurt marine businesses, not just in Vietnam but in other countries that have coastal lines,” he said. “The ports in Saigon can’t receive big ships. So if there’s any big vessels coming they will have to go to the deep-water port Cai Mep-Thi Vai.”

As the global economy rebounds, so will Vietnam’s ports, Truong said. “With its long coastal line and geographic location connecting it to international sea routes, from now until 2020 Vietnam will need to have more deep-water ports,” he said. “I believe ports in Vietnam will do well when the world economy has recovered.”

Cai Mep

About $2 billion has been invested in state-of-the-art terminals at Cai Mep port, Vietnam’s only deep-sea facility located at the mouth of the Cai Mep River and South China Sea, by foreign investors and state-owned and private Vietnamese companies. Opened in 2009, the port is part of the country’s goal to boost shipping volume more than 130 percent from 2012 to the end of the decade.

Investors backed the sprawling port southeast of the country’s commercial hub with the understanding that some of Ho Chi Minh City’s ports would shut down their container business, said Nguyen Xuan Thanh, the representative of Harvard’s Kennedy School of Government in Vietnam, who has studied the country’s terminal industry. Most remain in operation, siphoning container traffic from Cai Mep, he said.

Ho Chi Minh City port operators are reluctant to close facilities, located on prime real estate, during the country’s economic slowdown, and the city has resisted relinquishing its shipping industry to a neighboring province, Thanh said. Vietnam’s government forecasts the economy will grow 5.8 percent this year after a 5.42 percent expansion in 2013.

Many Cooks

Ministries, the central government and local provinces all have a hand in the country’s shipping industry, creating conflicting agendas, he said.

“It doesn’t bode well for the investment environment in Vietnam when you have a lot of private investment tied up in ports and making huge loses,” said Thanh. “The underlining problem is the system in Vietnam is very decentralized. The provinces have a lot of political power. They build white elephants.”

The Cai Mep port, located in Ba Ria-Vung Tau province, has seven terminals. The newest one opened in December and is operated by the military-owned Saigon Newport. Cai Mep International Terminal, which competes against the six other terminals, is running at 30 percent of capacity, according to a report late last year by Maersk.