Investors spurn Ba Ria-Vung Tau’s IZs
Investors spurn Ba Ria-Vung Tau’s IZs
Industrial zones (IZs) in southern Ba Ria-Vung Tau Province have encountered difficulties in attracting investment due to complicated administrative procedures, insufficient infrastructure facilities and high land rental fees.
The province is currently home to 15 IZs, covering a total area of 8,510ha. Only nine of them are, however, already operational while the remainder are under construction, according to local authorities.
These zones have to date attracted 294 projects, including 143 foreign-invested projects, with combined registered investment capital of US$14.69 billion.
However, only a few of the zones which have favourable geographic locations and complete infrastructure, such as Dong Xuyen, Phu My 1, My Xuan A2 and My Xuan A, reported positive occupancy rate of 90 per cent while the others have seen a much lower rate.
Vo Tuan Cuong, deputy director of My Xuan B1 Tien Hung IZ, outlined prolonged administrative procedures as the biggest concern of enterprises when investing in the province’s zones.
Recently, a South Korean investor canceled its project in the zone as the firm did not have the patience to complete all procedures even after it had transferred the deposit to his company, Cuong said.
Over the past 13 years, his zone has lost many other investors, including those from Japan and Taiwan, due to the same reason, he said, adding that shortening the time needed for investment licensing must be recognized by local authorities as necessary for survival.
“We expect the province to have solutions to shorten the time for investment licensing to 7-10 days to facilitate investors, " Cuong told Vietnam News Agency.
Higher land rental fees in Ba Ria-Vung Tau’s IZs compared with neighbouring provinces also made investors hesitate, authorities acknowledged.
Land rental fees for 50 years in the provincial zones have become quite high, ranging from $40 to $70 per square metre, much higher than the average rate of $18-45 per square metre in other locations such as Dong Nai and Binh Duong.
Head of the provincial IZs Management Board Nguyen Anh Triet said the current land rental fees are decided by the zones’ infrastructure developers instead of his board, which is eligible to make recommendations.
"The current high rental fees affect the zones’ ability to attract investment," he said.
Meanwhile, Nguyen Anh Tuan, general director of Sonadezi Chau Duc JSC, investor of Sonadezi Chau Duc IZ said, his firm faced challenges seeking investors due to the province’s restricted areas for investment in sectors such as paper, dyeing and footwear, while some others such as plating, fertilizer production and industrial detergents were not recognized as the province’s prioritized sectors.
Over the past years, many foreign companies have visited the zone to survey and explore investment opportunities in these reviewed sectors, Tuan explained.
To address these difficulties, secretary of the provincial Party Committee and chairman of the People’s Council Nguyen Hong Linh at a recent meeting, said that the province would focus on assisting investors to speed up compensation, site clearance and perfecting the zones’ infrastructure to improve occupancy rate of the zones.
The province would change its mindset on attracting investment. If enterprises were committed to focus on environment protection, the province would reconsider granting investment licences.
In a positive move, provincial People’s Committee vice chairman Nguyen Thanh Long has approved the province’s Department of Planning and Investment’s proposal to slash the time for investment licensing by 15 days, instead of the earlier 35 days.
He also asked relevant sectors to foster administrative reform to better facilitate investors.
