Buses Roll After Tricky Guerilla War

03/12/1996 

The frustration of doing business in Vietnam is getting worse, dashing some early big hopes. But rewards are still there, as ERIC ELLIS reports from Ho Chi Minh City in the first of a series examining the strains of rapid change in Vietnam.

THE sign, Koalas, next 15 km, sticks out like a gum tree amid the exhaust-choked streets of Ho Chi Minh City, the once and future Saigon.

The sign belongs to the Saigon Star Bus Company, certainly Australia's most visible business presence in this booming commercial capital of Vietnam. With 43 buses plying the boulevards of HCMCity and the decrepit "highways" of southern Vietnam and the Mekong Delta, the Saigon Star Bus Company has, in less than 18 months, become a much-loved fixture of Saigon life.

"We don't have any chooks and pigs on our routes," said Saigon Star's Brisbane-based corporate livewire Billy Hong.

"We just wanted to have a real bus company, just like one from Brissie," says the 39-year-old Hong, whose name-card indicates that the bus company is just one of his interests.

Hong's experience is a text-book of the pitfalls that can befall a business in a frontier market such as Vietnam and of the patience required to see it through.

Since arriving in Brisbane as a baby with his Singaporean parents, Hong has been plying the conventional Asian trade routes out of Brisbane long before Paul Keating got obsessed about the region.

But not Vietnam, a place Hong thought too hard, "too communist". But a meeting with the then Vietnamese ambassador to Australia led to an invitation to visit Vietnam, which was officially four years into its doi moi market reform program but confused about how to apply it.

"I came here in 1991 and the first thing that happened was that I got ripped off at the airport," Hong said. "I didn't see any cars, I didn't see any buses and I immediately thought here was a big, big opportunity for me in public transport."

Despite having no previous experience, Hong did a "recce" of the local transport scene, or lack of it, and returned to Brisbane to drum up a consortium of a mechanic, an accountant, a lawyer and himself, "the negotiator".

His letter from the ambassador got him into Vietnam but it didn't cut much ice with the local grassroots authorities, who seemed determined to obstruct him at every turn, while outwardly welcoming his group.

The director of the State-owned bus company was an old Viet Cong jungle guerilla who knew much more about operating an AK-47 than he did Saigon's old Russian, Hungarian and American buses.

Transformed after the war into a party hack, the director had a cosy sinecure "running" the bus company. Efficiency didn't matter in the old Vietnam and corporate sabotage Vietnam-style reared its head.

"He saw us as a threat to his position. He was afraid that his power would go down," says Hong.

Nevertheless, the director had the power and Hong, confident that the State had a will to change if not much idea how to do so, took the approach of wearing him down, through lots of lunches and "entertainment".

"I put three years of expenses into him and his friends but he kept asking for more and more ... a personal computer, a tape recorder, expensive lunches, just to make him happy." At the same time, Hong was developing and working other contacts to the point where finally, in August 1994, he received the coveted licence to run the bus company, in joint venture with the municipal bus service. The director had been out-manoeuvred. But even then Hong's problem partner still had some steam.

"He stole some of out joint venture letterhead and sent a letter to Hanoi (Vietnam's political capital) to say that we no longer wanted to invest. But it was too late - we had our licence." Hong noted with some satisfaction that the troglodyte director was sacked soon after and is now being investigated for corruption.

Hong's group is now ensconced in a no-frills depot near Saigon Airport on a one hectare site that used to be home to the tanks of the US Army.

The service was quickly welcomed by Saigonites. Where the old buses belched exhaust fumes and trundled along every 30 minutes on a few routes, Hong's buses, complete with TV, video and air-conditioning, motor along a dozen routes every five minutes from 4am until 10pm with a flat 2000 dong (30c) fare.

Conductors, usually female, are uniformed and paid between $US100-$US150 a month, drivers up to $US200, about double average Saigon salaries. The payroll is now 176 and will soon rise to almost 500 with new services.

Hong and partners have invested $US7.7 million for a 70 per cent stake in the JV. The Vietnamese contribution is $US3.3 million, being the notional value of the bus depot and another site downtown.

Revenue is raised through the fares of an average 20,000 passengers a day and Hong has just won a hard-to-obtain advertising licence and approval to build 400 Brisbane-style bus-stops across the city.

In April, he will take delivery of another 120 buses to run airport and tourist services, as well an intra-city routes right up to Hanoi and beyond. A taxi service is being installed and Hong is waiting for State approval for self-drive hire cars a la Avis, Budget and Hertz.

Right now, there is no real competition for Hong's business but he is preparing for the longer haul with plans to build a 10-pin bowling alley for Saigon's fast-rising yuppies.

"I've put the hours in mate. They're not getting rid of me now."