Lack of infrastructure in economic zone deters investors
Article
(Listed Jul 1, 2009)
A number of investors are hesitating to pour their money into the Nhon Hoi Economic Zone because of slow construction in the area.
"Some foreign partners of my company have plans to invest in the zone but they’re hesitating because infrastructure has not yet met their requirements," said Hong Yeung-Vietnam Company’s Tu Boi Phong.
The Khang Thong Commerce and Trade Company was granted a tax-free investment licence for the area, with a registered capital of VND4 trillion (US$224 million). One of its partner, ALT Investment Group, visited the site, but had not yet made a decision on investing in the area.
So, it was slow construction on infrastructure projects that caused the economic zone to miss out on many investment opportunities. The head of NEZ’s management board, Man Ngoc Ly, said that in 2008, the economic zone had faced many difficulties, such as the global economic crisis, rising prices of raw materials, high interest rates, a prolonged rainy season, policy changes for land clearance and compensation and poor co-operation between functional agencies and the management board.
The EZ will cover a total area of 6,000ha, but up to now, only 2,000ha have been cleared. At present, the economic zone is seeing difficulties in land clearance at Hang Doi, mainway’sT26, T24, DT 639 in tourism projects and in the Vinh Hoi Project, the biggest project ever, with an investment of $250 million.
Up to now, only 20 of some 600 households have been moved. Although a number of households had received compensations and agreed to resettle, some still seemed to not understand, said deputy head of the provincial People’s Committee Le Huu Loc. It would take time to explain and convince them. This was said to be part of the cause of the slowdown. To deal with the problem, in the middle of June, the province issued Document 1828/UBND-CN to set up a committee that would directly be in charge and solve all issues relating to land clearance and compensations before the July 1 deadline.
Regarding infrastructure construction, the management board reported that up to now, floor plans and water pipes in the first phase of the water supplying project (with a total investment of VND45 billion and a capacity of 12,000cu.m per day) had been completed. The power project, which would build and operate 110kW-220kW transformer stations and a wire network, was 50 per cent complete. Infrastructure construction was expected to be completed by the end of the year.
Established in June 2005 under the Prime Minister’s decision, economic zone was expected to become a key factor in regional socio-economic development. This multiple-sector economic zone will include a non-tariff area, industrial parks, a sea port and port services, a tourism area and a new residential area, all operating under a special incentive mechanism.
Moreover, investors could easily employ labourers from neighbouring areas of Tuy Phuoc, An Nhon, Phu Cat and Quy Nhon. According to head of Trade Promotion Centre Duong Ngoc Oanh, 19 investment projects have been officially granted with investment certificates, with total registered capital of VND15.7 trillion.
From now to the end of the year, the management board will concentrate on promoting infrastructure projects with capital coming from the State budget, provincial budget and investments. Target set
The economic zone has set a target to attract VND8-10 trillion in investments, to disburse VND1.4-1.5 trillion (three times higher than in 2008) and to strengthen land clearance and compensation with VND350 billion from the State (six times higher compared with last year).
In order to achieve these goals, the management board has committed to disburse capital and pay bidders on time. In addition, they will improve the effectiveness of management and boost co-operation with authorities and functional agencies. Next, the management board will discuss and share the burdens of the bidders. And, last but not least, they will raise the quality of consultancy, design and supervision to ensure the quality of the construction projects.
Hopefully, with these efforts, the economic zone will soon be completed and become operational, attracting more home and overseas investors.
"The economic zone is expected to bring a promising future for the province’s socio-economic development. We warmly welcome investments and support," Binh Dinh Province deputy head Le Huu Loc said. Source: Vietnam News
A number of investors are hesitating to pour their money into the Nhon Hoi Economic Zone because of slow construction in the area.
