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Vietnam Today

Poorly-performing IZs face closure

Released at: 17:51, 21/03/2015

Poorly-performing IZs face closure

Deputy PM directs MPI and local authorities to identify ineffective industrial zones, which may then be shut down.

by Minh Tuyet

Ineffective industrial zones and those not attracting sufficient project numbers should be closed down, Deputy Prime Minister Hoang Trung Hai told a meeting on developing industrial zones and economic zones on March 19.

Last year industrial zones and economic zones attracted 752 new projects and saw 515 projects increased their capital, for a total of $14.7 billion, a report presented at the meeting showed. In manufacturing, foreign investment capital (FDI) capital at industrial zones and economic zones accounts for 90 per cent of the country’s total.

There were 5,573 FDI projects at industrial zones as at the end of 2014, with registered capital standing at $85.5 billion. Disbursed capital reached $49 billion, accounting for 57 per cent of the total.

Total revenue at industrial zones and economic zones in 2014 exceeded $118 billion, an increase of 18 per cent compared to 2013. Export-import turnover was over $73.4 billion, increasing 43 per cent and accounting for 49 per cent of Vietnam’s total export-import turnover.

State agencies and local authorities have inspected and sanctioned ineffective industrial zones. The report pointed out that among industrial zones in Group IV (the lowest performing industrial zones, which have low occupancy rates, have not paid site clearance compensation, and have not completed site clearance), five had reduced their size from the original land allocated, changed investor, or changed the land use purpose.

The Deputy PM also said that the operations of industrial zones and economic zones fell short of their potential. The average occupancy rate was only 65 per cent, so their operations need to be improved.

He requested the Ministry of Planning and Investment (MPI) and its local departments to inspect and adjust plans then report back to the government.

“Be determined to close down ineffective industrial zones that are not attracting projects or being developed slowly,” he directed the gathering.

The development of industrial zones in Vietnam has too often been disorganized, with many provinces choosing to build them without giving thought to local needs or practicality.

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