Vinh Phuc was once a "remarkable recipient of investment capital" in the country. However, strong growth in neighboring provinces, along with some shortcomings in its industrial parks, has diminished its investment appeal. To ensure sustainable development of industrial parks (IPs), the province needs to implement more specific policies and solutions in the new period.
Heavy investments in infrastructure have enabled Khai Quang IP to attract many businesses
Current status of IP development
From only one industrial park with eight foreign direct investment (FDI) projects and one domestic direct investment (DDI) project in 1998, Vinh Phuc is now home to 29 planned IPs, with 17 formed IPs with a total area of 3,146 ha. Nine IPs are operational, namely Kim Hoa, Khai Quang, Binh Xuyen, Ba Thien, Binh Xuyen II-Phase 1, Ba Thien 2, Tam Duong II-Zone A, Thai Hoa-Lien Son-Lien Hoa-Zone II-Phase 1, and Thang Long Vinh Phuc.
Notably, Vinh Phuc province-based IPs have not only developed strongly in core areas like Vinh Yen City, Phuc Yen City, Binh Xuyen and Tam Duong districts but also spread and shifted to Vinh Tuong, Lap Thach and Song Lo districts. The occupancy rate of local IPs is nearly 70%. Every year, tenants in IPs contribute 60-65% of the province's industrial production value; 60-65% of the export value and 75-80% of the budget revenue (not inclusive of Honda Vietnam Company in Kim Hoa IP). In addition, the province is actively carrying out a series of other potential IP projects like Nam Binh Xuyen Industrial Park (Green Park) in the high-tech area.
Furthermore, Vinh Phuc has been a remarkable magnet of investment flows for many consecutive years. By the end of August 2024, its IPs housed 493 valid investment projects, including 376 FDI projects with US$6.74 billion of investment capital from 20 countries and territories around the world. FDI projects employ over 140,000 workers and importantly contribute to local socioeconomic development.
Narrowing competitive advantages
However, the province’s advantages and potential for investment attraction such as land, resources, infrastructure rent, land rent, support policy and administrative reforms have gradually narrowed due to the strong competition and rise of other localities, especially its neighbors, which has directly weakened its competitiveness in investment attraction. One of the reasons is that the progress of compensation and site clearance is still not as quick as expected. The source of materials for ground leveling is not favorable while most IPs have a great demand for ground.
Specifically, Song Lo II IP needs 4 million cubic meters of soil for ground leveling; Binh Xuyen II IP-Phase 2 needs 1.5 million cubic meters; Binh Xuyen IP needs 0.7 million cubic meters; Son Loi IP needs 4.6 million cubic meters; and Nam Binh Xuyen IP needs 6 million m3.
In fact, some IPs have been allocated land by the Provincial People's Committee but the land rental price has not been determined, such as Tam Duong I IP-Zone 2, Song Lo II IP, Thai Hoa-Lien Son-Lien Hoa IP (Zone 2, Phase 1), causing difficulties to infrastructure investors in attracting secondary investors to IPs and mobilizing capital from credit institutions to invest in IPs.
According to current law, land rental prices in IPs are decided by infrastructure investors. Currently, the average land rent in the province is from US$130-150 per square meter, with some projects being over US$170, higher than the average level of some provinces, resulting in weaker competitiveness in investment attraction than Bac Giang, Bac Ninh, Hung Yen and Hai Duong provinces. Moreover, investment promotion is not very effective. The competitiveness and attractiveness of IPs to investors is gradually dwindling.
Binh Xuyen IP boasts a high occupancy rate among industrial parks
Solutions for sustainable IP development in the new period
To find and remove bottlenecks and sharpen competitive advantages, the Vinh Phuc Provincial People’s Committee recently organized the Conference on "Sustainable Industrial Park Development in Vinh Phuc province.” At the event, Mr. Tran Quoc Trung, Deputy Director of the Economic Zones Management Department under the Ministry of Planning and Investment said: In order to realize sustainable development goals and effectively implement the Vinh Phuc Master Plan approved by the Government in Decision 158/QD-TTg dated February 6, 2024, Vinh Phuc industrial parks need to focus on seven solutions as follows:
First, quickly transforming traditional industrial parks into eco-industrial parks, high-tech industrial parks and specialized industrial parks as determined in the Vinh Phuc Master Plan.
Second, taking science and technology, innovation as pillars for future development. In particular, the province will shift to create an environment for the formation and development of technology companies and startups. It will allocate land and resources for research and development R&D projects, new product testing, high technology application, digital transformation and energy conservation.
Third, attracting selective investment in industries and fields that Vietnam prioritizes.
Fourth, developing production, industry, and services on the principle of economizing and effectively utilizing land resources, associated with regional development linkages and industrial clusters.
Fifth, aligning economic development with social infrastructure development; ensuring environmental sustainability; planning and implementing solutions to build housing and service facilities, public utilities for workers in industrial parks; perfecting the industrial-urban-service ecosystem, ensuring sustainable development of industrial parks in Vinh Phuc province.
Sixth, strengthening inspection and supervision of the implementation of legal regulations on environmental protection and wastewater treatment plant construction; strongly reforming administrative procedures, effectively implementing single-window procedures at the Vinh Phuc Industrial Zones Management Board, promptly supporting and removing difficulties for tenants in industrial parks.
Seventh, improving the competitiveness and attractiveness of local industrial parks by upgrading infrastructure such as transportation, logistics service areas; enhancing scientific and technological research and innovation.
Based on the direction of the official of the Economic Zones Management Department under the Ministry of Planning and Investment as well as opinions and suggestions at the conference, Chairman of the Vinh Phuc Provincial People's Committee Tran Duy Dong assigned specific tasks to relevant agencies and localities. Accordingly, it is necessary to remove obstacles in land compensation, site clearance, resettlement arrangements, planning, social housing and worker housing construction, power grid and high-quality human resources training as soon as possible; effectively implementing investment promotion programs and attracting strategic investors to the province. At the same time, it is recommended that the Ministry of Planning and Investment support adopting new industrial park models and building laws on industrial parks and economic zones.
With the motto “Investors in Vinh Phuc are local citizens; as businesses thrive, Vinh Phuc develops", Vinh Phuc province is committed to providing all favorable conditions for investors to do successful business in the province. Local authorities will strive to resolve difficulties and require investors to strictly comply with legal regulations, protect the environment, and implement high-quality projects.
By Nguyet Tham, Vietnam Business Forum
Vietnamese
