HCMC adds more incentive policies to attract investors

Ho Chi Minh City is urgently reviewing the operation of industrial parks - export processing zones (IZs - EPZs) in the city to beef up the improvement of infrastructure and add more government-implemented incentive policies aimed to encourage investors into its domestic market or to promote the expansion of existing businesses with the priority of investment in high technology.

 

Simultaneously, the southern metropolis has quickly carried out new investment projects in IZs and EPZs in combination with administrative procedure reform in order to ‘catch the wave’ of foreign investment that is shifting strongly into Vietnam. Head of the Management Board of HCMC Export Processing and Industrial Zones Authority (HEPZA) Hua Quoc Hung, said that 19 IZs and EPZs in Ho Chi Minh City have so far come into operation on the land area of nearly 1,900 ha. However, it must be admitted that the southern largest city has lost its advantages in attracting investment in the city in general and in IZs-EPZs in particular compared to many neighbouring localities.


According to the Hepza leader, the city's investment attraction in IZs and EPZs still centres around labour-intensive industries with low added value. Many enterprises operating in IZs and EPZs have employed outdated technology, wasteful use of human resources, and posed a high risk of environmental pollution. On the other hand, the linkage between enterprises in IZs and EPZs and between IZs and EPZs with localities is still limited whereas the supporting industry has not yet developed and companies faced difficulties in hiring skilled labourers. Worse, technique infrastructure has not met enterprises’ requirements. Along with that, the state management model has shown shortcomings and it has not proved its effectiveness. Moreover, the existing general mechanisms and policies for IZs and EPZs have not worked synchronously and their application is not appropriate to the rapidly changing context.


Many businesses also confirmed that the infrastructure of Ho Chi Minh City's IZs and EPZs has been seriously degraded. For example, the Cat Lai Industrial Park has seen flooding and insecurity increasingly, adversely affecting the production of enterprises. Last but not least, many businesses find it difficult to seek a large land area for the construction of the plant because the land fund of IZs-EPZs is limited; plus, many places are still facing barriers in site clearance. Japanese businesses in Hiep Phuoc Industrial Park said that although the city has allowed the construction of high-rise factories to meet the needs of enterprises, the slow determination of land prices has significantly affected businesses’ investment progress.


Chairman of the city HEPZA Business Association (HBA) Nguyen Van Be said that the recent Covid-19 epidemic also has shown an important inadequacy that requires the city's IZs and EPZs to be quickly renovated. The southern largest city is lacking serious worker accommodation. Currently, the city's IZs and EPZs are very short of land funds to invest in accommodation for workers, if city administrations do not take the matter into account, it will be difficult to attract investment. Mr. Tran Viet Ha, Deputy Head of Hepza Management Board, said that from now until 2025, the city will focus on 10 solutions to improve the investment environment. Specifically, with the investment attraction solution, it will develop a set of investment attraction criteria and policies to support the transfer of science and technology and innovation of existing businesses.


For projects with high technology levels, the city will support and encourage investors to expand production scale by helping them to resolve matters relating to administrative procedures and finding suitable land plots for investors. Particularly for enterprises investing in the infrastructure of IZs and EPZs, the city will set out criteria for total investment and land rent as a basis for public bidding to select investors. Next, the city will urge businesses that are using outdated technology to switch to new and more modern technology. The city will not approve these businesses’ proposal of operation expansion if they do not use modern technology to reduce labour intensiveness. At the same time, the city will expand the beneficiaries of preferential loans under the investment stimulus program as well as help connect businesses with preferential loans from funds and financial institutions to transform production technology. For any business that does not meet the requirements for preferential loans, Hepza will coordinate with the Management Board of IZs and EPZs in provinces to find suitable land funds for relocation plans.


Currently, the city is reviewing the land fund and removing obstacles in legal procedures to soon put IPs Le Minh Xuan 2, Phong Phu, Le Minh Xuan, Vinh Loc and Tay Bac Cu Chi into operation. In particular, the Pham Van Hai Industrial Park in HCMC’s Binh Chanh District with a scale of 668ha will come into operation in order to attract investment in enterprises employing high technology applications in the electrical, electronic, and mechanical industries, and support industry. Meanwhile, businesses voiced their opinions that the city necessarily carries out the one-door policy effectively in order to be able to implement the above solutions and increase the attractiveness of the city's investment environment.


Source: CCIPV / Ai Van / Saigon Online