HCM City’s IPs, EPZs let down by lack of infrastructure

Many industrial parks and export processing zones in HCM City lack sufficient infrastructure since authorities’ failure to pay compensation for lands has meant they have been unable to acquire and clear them.

HCM City needs to speed up compensation payments for clearance of lands at industrial parks and export processing zones to build infrastructure and attract investors. 

According to a report by the HCM City Export Processing Zones and Industrial Parks Authority (Hepza), many IPs and EPZs such as Le Minh Xuan and Phong Phu in Binh Chanh District lack transportation, greenery, drainage systems, wastewater treatment facilities, and water and power.

Besides, infrastructure at many others, most of them built in the 1990s, has deteriorated, especially wastewater treatment facilities, which no longer meet environmental norms.

Many tenants seeking to expand cannot find enough land to lease or rentals are too high compared to those at EPZs and IPs in neighbouring provinces.

Roads near EPZs and IPs are often too congested, leading to higher costs for tenants, Tran Trong Tien, a representative of enterprises at the Tan Thuan Export Processing Zone, said.

Because of the infrastructure shortfall, the Automotive- Mechanical Industrial Park established three years ago on an area of ​​nearly 100ha in Cu Chi District has attracted only 12 companies who have leased only a fifth of the available space.

If the city wants to attract more investment into its IPs and EPZs, especially from abroad, it needs to renovate them, experts warned.

To address the land acquisition problem, Hepza has urged the city People’s Committee to direct district authorities to speed up compensation payment and site clearance.

 

It also wants procedures related to investment, labour and construction to be simplified to attract foreign investment.

The Hepza report said the city’s advantages over neighbouring localities have narrowed since the latter are offering competitive land rentals and other incentives.

The average rent per square metre for a lease term of 40-50 years is US$74 in Dong Nai, $43.7 in Binh Duong and $76 in Long An compared to $125 in HCM City.

The city needs to improve the efficiency of land use to reduce rents and should strengthen linkages with other zones in the southern region, experts said.

City authorities plan to make existing zones green and clean by 2025 and build new hi-tech zones for supply industries, with priority given to current investors and industry 4.0 technologies.

They city has sought Government approval for a 380ha industrial park​​ in Pham Van Hai Commune, Binh Chanh District.

It will be a specialised industrial park for innovative start-ups and producers and distributors in new industries and technologies.

HCM City has 17 EPZs and IPs with a combined area of more than 2,570ha. It targets having 23 ‘green’ high-tech EPZs and IPs with 6,000ha by this year. — VNS

 
 

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