IPs need improved local management

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VietNam News English - 48 month(s) ago 1 readings

Although industrial parks have expanded greatly in the last 20 years, they have not contributed to socio-economic development as much as was previously predicted, according to an official of the Ministry of Planning and Investment.

Since the Tan Thuan Export-Processing Zone first began operating in 1993, as many as 253 IPs have been opened, including export-processing zones and economic zones.

The IPs are home of 3,840 foreign-invested projects with a combined capital of about US$52 billion, or 30 per cent of the country's total FDI.

In addition, about 4,600 domestically invested projects worth more than VND305 trillion ($15.25 billion) have been established in the IPs.

The IPs have generated $20 billion in industrial output value and created jobs for 1.5 million people.

They have proven to be an important destination for both FDI and domestic projects over the last years, according to Dang Huy Dong, deputy minister of Planning and Investment.

Dong, however, said that in addition to many major achievements, the IPs had not been developed uniformly nationwide.

FDI poured into IPs in the late 1990s but that had fallen regularly in recent years, he said.

Worse still, the occupancy rate of many IPs remained a problem.

Vo Thanh Lap, head of the Dong Nai Province's Industrial Parks Management Board, said in recent years provinces and cities had vied with each other to open IPs, attracting investors at any price, without mentioning their real potential. As a result, land had been wasted in IPs.

Le Tan Cuong, director of the MPI Economic Zones Management Department, said too many IPs had been established, leading to stiff competition among IPs for construction locations and investors.

Infrastructure was built for each IP, but their effectiveness was modest.

Land rental rates at local IPs, which are higher than IP prices of many other countries in the region, had not attracted investors either, Cuong said.

Department deputy head Dong said pollution at IPs was another problem.

According to current regulations, all IPs must have waste water treatment plans but only 50 per cent of them did, according to Dong.

Most of the current IPs were small and scattered over large areas and not able to co-ordinate their businesses, Lap said.

Many of the smaller plants lacked waste water treatment plants.

Cuong said the IPs had not prospered because of poor planning and management as well as a weak legal framework.

The management of IPs had not been decentralised, resulting in localities with similar functions. Thus, the IPs could not make the best of their comparative advantages.

Cuong said the Government should have an IP development master plan that would require the co-ordination of neighbouring localities.

IPs must be better developed to ensure their efficiency, he added.

Land should not be wasted and the country's food security and people's livelihood should not be affected by improper management of IPs, Cuong said.

He also suggested that IP developers turn down projects that use too much land and energy, or those that are ineffective or pollute the environment. — VNS

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