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  • News
  • News in Vietnam
  • 20 January 2022

Industrial production faces difficulties in leasing land

Ho Chi Minh City’s industrial production activities face a significant challenge in terms of infrastructure when land for lease in existing industrial zones (IZs) is gradually being occupied while newly established IZs are slow in deploying. The above limitations make it challenging to attract investment into the manufacturing sector of Ho Chi Minh City.

This information was shared by the leaders of the Management Board of the Export Processing Zones (EPZs) and the Industrial Zones of Ho Chi Minh City (Hepza) in the report on operation situation of the EPZs – IZs in 2021 and the work Plan in 2022.

Specifically, according to Hepza, the land fund attracting investment in EPZs and IZs is getting smaller and smaller as existing industrial zones are gradually filled up. While new IZs have been established but slow in implementing. Thoseinclude Le Minh Xuan 2, Le Minh Xuan expansion, Vinh Loc expansion, Tay Bac Cu Chi expansion due to delay in compensation for site clearance, land allocation for project implementation, and the owner’s legal status.

On the other hand, industrial zones included in the planning list of urban industrial zones have been slowly established (such as Vinh Loc 3, Hiep Phuoc phase 3). In addition, the development of other industrial parks outside the planning currently faces many difficulties in terms of procedures and time.

In some industrial zones such as Dong Nam, Tan Phu Trung, Tay Bac Cu Chi, the investor developing the infrastructure of the IP has not been approved for the investment policy and recognized as the investor of the residential area adjacent to the IP due to challenges in legal procedure. As a result, the Industrial Park Infrastructure Development Company could not carry out the work of compensation and site clearance, has delayed handing over the resettlement slot, and not built utility services and social infrastructure to serve workers and experts working in industrial zones.

Previously, a Hepza representative also shared his concern over challenges of the lack of a “clean land” fund and the progress of the Covid-19 epidemic would significantly affect investment attraction.

Notably, the “clean land” fund for investors to rent out is being narrowed. Currently, industrial parks in the city only have a small amount of land available for lease, but they are scattered in many different areas. Meanwhile, the land fund available for lease in an industrial park must be significant to attract large-scale projects.

With the above limitations, Hezpa aims to attract investment in 2022 to only 500 million USD, 100 million USD lower than the result drawn in 2021.

In the coming time, Hepza will consult on legal procedures according to its authority towards the establishment and step-by-step putting Pham Van Hai Industrial Park into operation in the direction of high technology. On the other hand, the Management Board will urge the construction of a 20,000 m2 high-rise factory, implement administrative reform, increase the proportion of cases processed through online public services at level 3, 4 to 30% this year.

According to Mr. Hua Quoc Hung, Head of Hepza, to achieve that goal, Hepza will focus on improving investment quality and efficiency, step up the prevention and control of the Covid-19 epidemic, strengthen support for businesses to stabilize, develop production and administrative reform.

In particular, the critical task is to promote the early establishment and operation of the new 668-hectare Pham Van Hai industrial park after the Prime Minister approved the addition of the industrial park to the master plan on industrial park development. Coordinate with the People’s Committees of districts and departments to speed up the site clearance and  compensation and legal procedures to deploy the newly established and expanded IZs, including Le Minh Xuan 2 Industrial Park, Le Minh Xuan industrial Park expansion, Tay Bac Cu Chi expansion, Vinh Loc expansion and industrial zones in the Prime Minister’s planning list (Hiep Phuoc phase 3, Vinh Loc 3).

“Hepza also orients the development model of new industrial zones, coordinates with departments and sectors to develop criteria to attract investment in EPZs and IZs based on investment capital/ha, labor/ha, and attractive industries. Strengthen on-the-spot investment promotion through industry associations and foreign-invested enterprise associations in Vietnam; enhance the image and brand of Hepza by providing maximum support to businesses to overcome difficulties in production and business due to the impact of the epidemic”, Mr. Hung shared.

In addition, Hepza also focuses on developing a high-rise factory model to improve land-use efficiency, strictly supervising the implementation and use of land of investment projects, recovering the land fund for projects that are not implemented according to the registered schedule to implement other projects more effectively.