Foreign-invested groups bemoan land processes
Many large-scale foreign-invested enterprises in the south of Vietnam are facing barriers relating to land procedures, particularly when starting new ventures.
Thai industrial real estate developer Amata Group said that the group has prepared over $600 million to invest in four projects in Long Thanh district of the southern province of Dong Nai. These projects combine Long Thanh Industrial Park (IP) and three urban projects.
According to Somhatai Panichewa, general director of Amata Vietnam, the group is eager to disperse its capital but can only do so if issues relating to planning, land use, and compensation are resolved.
“Once completed, the IP will attract a large volume of tenants. Many foreign-invested enterprises have already showed their interest in developing facilities here,” said Panichewa.
In 2006, the prime minister approved a plan to develop the 500-hectares Long Thanh IP, and added it to the nation’s development master plan.
In 2015, the province granted an investment certificate to Long Thanh Amata Urban JSC, a subsidiary of Amata Group. However, eight years later, the province has yet to hand over all of the land to the investor.
According to the Dong Nai People’s Committee, the current available land in IPs in the province is modest with an area of 1,050ha and a focus on Long Thanh, Bien Hoa, and Nhon Trach districts.
Just 237ha has the available infrastructure to welcome tenants, with the remaining area facing issues in land clearance and incomplete infrastructure. Eight IPs have yet to be established despite being approved, but they already meet conditions relating to investment and land use changes.
Delays like these are hindering the prospects of foreign-invested enterprises. For example, leaders of Schaeffler Vietnam Co., Ltd., a subsidiary of automotive and industrial supplier Schaeffler Group, are impatient with the failure to be allocated land for its expansion in Dong Nai province.
According to Schaeffler, the company put $45 million into phase 1 of a greenfield plant in 2019 at Amata IP. Leaders of Schaeffler and Amata agreed that once the first phase of the greenfield operation was operating steadily, a plot of land neighbouring the plant would be allocated to the company, due for late 2021.
In September last year, Schaeffler sent a document to the prime minister outlining its difficulties. “Due to the pandemic, Amata changed the timeline to this year. However, some weeks ago, it was noted that land would be instead handed over in December 2024 due to a change in land management policy. Thus, the province will have to change the overall planning, and this work will take a very long time,” the document said.
Nguyen Xuan Thang, general director of the company, told local media that to prepare for phase 2, the enterprise has been working with the investor of Amata IP and relevant units for the past two years to complete paperwork, but procedures remain entangled.
“The parent company required completion of procedures for expansion in 2022 so that it could implement the expanded project this year,” Thang said. “If the land allocation is delayed, we are forced to look for elsewhere in the region to build the plant, and many other investors will face a similar solution.”
In another case, four months after the ground-breaking ceremony for its $1 billion factory, Lego Group has asked Binh Duong People’s Committee to accelerate procedures relating to land rights so that the investor can ensure the construction schedule.
“To take the factory into operation in June 2024 on schedule, the group expects that the province will help us on this issue,” said Preben Elnef, vice president of Lego Group, at a meeting with provincial leaders on March 1.
“Besides this, the group wants the province to quickly fulfil procedures for land, connect to the 110KV power grid, deploy solar power, and make an appraisal of the technical design of fire prevention and fighting, so that the group can deploy the project as soon as possible,” he added.
Vo Van Minh, Chairman of Binh Duong People’s Committee, said that leaders in the province would make efforts to accelerate such procedures for Lego. Binh Duong will also take steps to complete the procedures for land rights as soon as possible.
“The province will also support the group in giving its recommendations to the Ministry of Public Security, the Ministry of Industry and Trade, and Southern Power Corporation to speed up the appraisal of fire regulations, and connect the power grid so that the project can be deployed smoothly and successfully,” Minh said.