Removing obstacles to industrial clusters

10:01 | 27/05/2013 Industry

(VEN) - The infrastructure investment rates per hectare in Dong Nai Province’s industrial clusters (ICs) stand at an estimated VND4.8-5 billion, which is too high for investors and is considered as a major reason for the slow implementation of many projects.

Pottery production in the Tan Hanh Ceramic Industrial Cluster in Bien Hoa

According to the provincial plan, there will be 40 ICs set up in Dong Nai by 2020, covering 2,136.79ha. However, only two of 40 ICs, Tan Hanh Ceramic IC in Bien Hoa City and Ho Nai 3 building materials IC in Trang Bom District, have completed the construction of infrastructure and began to lease 104.48ha to businesses. Six other ICs are still undergoing land clearance.

Dong Nai will have to complete the detailed IC planning and infrastructure construction for 18 ICs by 2015, according to the provincial plan, which will prove a hard nut to crack.

Deputy Director of Dong Nai’s Department of Industry and Trade Chau Minh Nguyen said: “Major obstacles to the implementation of the provincial plan are a lack of specific criteria for IC design which makes it difficult to plan an IC and to call for investment in construction infrastructure. Currently, Dong Nai is planning ICs in the same way as industrial parks (IPs).

According to IP criteria, the percentage of land use accounts for up to 60 percent of the total area. If these criteria are applied to 50-75ha IC planning, the investment rates per ha may be higher. According to the Dong Nai’s Department of Industry and Trade’s calculations, an IP investment rate per ha may be VND3.5-4 billion, compared to VND4.8 to 5 billion per ha in ICs.

“This is ridiculous especially when ICs are set up for the purpose of accommodating small and medium-sized enterprises and rural industrial facilities, with a view to avoiding environmental pollution. Such high investment rates may well prevent investors from making IC infrastructure investment decisions,” Chau Minh Nguyen said.

Apart from Dong Nai, several other provinces across the country have also expressed their dilemma in IC establishment, especially in terms of infrastructure construction investment rates per ha which may even amount to VND7-8 billion in mountainous provincial ICs.

Being aware of the issue, the Dong Nai Department of Industry and Trade proposed to the Ministry of Industry and Trade and relevant ministries to draft a set of IC design criteria, with a leasable area accounting for at least 70 percent of the total, with the remainder devoted to tree coverage. Essential services such as electricity and water should also be offered so as to attract them into provincial ICs.

According to Director of Agency for Industrial Promotion (AIP) Do Xuan Ha, AIP became aware of the issue in 2010 and requested the Ministry of Construction to reconsider and amend the IC criteria. In fact, high IC investment rates were the result of the application of Circular 19/2008/TT-BXD guiding the planning, appraisal, approval and management of construction of industrial parks and economic zones.

In AIP’s report on the two-year implementation of Prime Ministerial Decision 105/2009/QD-TTg on IC Management Regulations submitted to the Prime Minister on December 21, 2012, AIP also made a proposal to increase the maximum leasing prices to cover the IC related costs considering low IC-filling rates.

AIP’s efforts were remunerated as the Government Office recently assigned the Ministry of Planning and Investment, the Ministry of Industry and Trade, and Ministry of Natural Resources and Environment to cooperate in solving IC planning issues. At a recent ministry-level meeting, AIP Director Do Xuan Ha confirmed to take up the IC issues with the Ministry of Construction to make reasonable adjustments in terms of IC criteria./.

Hai Linh