Development of economic zones in Champassak delayed
Development of economic zones in Champassak delayed
The development of the three special economic zones in Champassak province has not progressed as anticipated, according to the provincial governor.
Governor Sonexay Siphandone told Vientiane Times the delay may be related to business returns as investors think that it's quite far to develop the zones and recoup their investment capital.
“The far away location makes it hard for us to entice developers to invest in the zones,” Mr Sonexay said.
The three special economic zones consist Khonphapheng waterfall and its surrounding area in Khong district, Vangtao-Chongmek border checkpoint in Phonthong district, and the Bolaven plateau in Pakxong district.
All these zones are still in the process of conducting surveys and project design as well as finding investors to develop the zones.
In Khonphapheng zone, the province has allocated an area of 7,000 hectares for the development of a special economic zone, of which 2,300 hectares has been allocated for urban development.
One company had developed a golf course and resort in the area near Khonphapheng waterfall but a lack of promotion and almost no visitors to the facility forced the company to abandon the operation.
Khonphapheng is the biggest waterfall in South East Asia, attracting many thousands of tourists to the area every year and the province thought that this should be a prime location to establish a special economic zone and attract entrepreneurs to do business here.
For the zone at the Vangtao-Chongmek border checkpoint, authorities have signed an memorandum of understanding with a Russian company but the company has made no progress in developing the zone.
“I have proposed this matter to the government to seek possible solutions to the problem. Several companies are now interested to invest in this zone, particularly an Indonesian company, but we face delays with the Russian contractor,” Mr Sonexay said.
The zone in Pakxong district covers an area of 9,000 hectares aiming to transform the rural area of Laos into a development centre. It was given to a local company but they faced financial difficulties when it came to developing the zone.
“I think that it is quite hard for local companies to develop special economic zones due to limited funding,” Mr Sonexay said. He added that since the financial crisis in 2008, the real estate business has not bloomed in many countries, particularly in Laos and Vietnam.
Champassak provincial authorities have designated three economic zones, aiming to attract more foreign direct investment to the province, boost development and alleviate poverty in the area by creating more job opportunities for local people.
The special economic zone is a form of economic development which aims to attract investors from home and abroad by offering tax and duty incentives to promote infrastructure development, services, production, skill development and the transfer of modern technology. Under the policy for promoting special economic zones, developers will invest in developing infrastructure in the zones including water supplies, electricity, roads and other facilities.
Through this means they aim to attract other investors to do businesses in the zones and earn benefits from various fees.
vientiane times
