Vietnam pays a heavy price for “fill-up” policy

Vietnam pays a heavy price for “fill-up” policy

VietNamNet Bridge – Local authorities have kept industrial zones’ (IZ) doors opened widely to all investors, striving to attract as many investors as possible. And now they are paying a penalty for that policy.

The Da Nang City IZ Board of Management has submitted a report to the local authorities, proposing to repossess the plots of land in the IZs that were allocated to investors who have either left the land idle or used for wrong purposes.

The latest survey found that 37 out of the 380 registered projects in the IZs in Da Nang have not been operational for the last many years. Under current law, local authorities are entitled to reclaim the land allocated to these projects.

The management board has proposed taking back 22 hectares out of the 627 hectares of land leased to the investors. Some of the projects had been designated as especially important projects, ones for which the Da Nang authorities had offered very attractive investment incentives.

A senior official of the Da Nang Industry and Trade Department commented that the “immovable projects” and the unused land are a consequence of the “fill-up” policy. In the past, local authorities only cared about the occupancy rates in IZs and put quantity before quality in attracting foreign direct investment. They promised to create most favorable conditions for investors to implement their projects.

In some cases, it took only 36 hours to five days to fulfill the licensing procedures.

“At that time, Da Nang just tried to invite more and more investors, while it did not pay appropriate attention to verifying the investors’ capabilities,” he noted.

The IZs’ developers, who strived to “fill up” the IZs at any costs, sometimes ignored the investors’ problems.

“The Vina Mobi project has not kicked off yet since the day it got its license some years ago,” the official said. “The land reserved for the project remains idle”.

The official also pointed to the Hoa Khanh IZ which, with 90 percent of its area occupied, was once the pride of the city. Hoa Khanh has, in fact, turned out to be deserted, as many registered projects have essentially gone nowhere.

Da Nang for the last few years has been following a new socio-economic development strategy. Now, developing tourism is the key mission, displacing the development of industries as initially planned. (To be sure, Da Nang is still moving ahead with plans to set up a high-technology park and upgrade the other IZs.)

This, some analysts say, may be a factor behind the delays in the registered projects’ implementations. Investors may feel they are not receiving adequate support from the local authorities to speed up their projects.

According to Thai Ba Canh, Head of the Da Nang’s IZ Board of Management, it is necessary to take action to settle the problem and put land into use. Canh said it is now essential to promote the investment and production activities to warm up the registered projects. Meanwhile, it is also necessary to check the projects’ implementation and take back idle land and turn it over to other projects.

“It is a great waste to leave land idle, while we need premises for the high technology park and other plans,” he said.

NCDT

Vietnam pays a heavy price for “fill-up” policy Related image(s)