HCM City (VNS/VNA)– Ho Chi Minh City’s authorities plan to offer competitive land rents and otherincentives at industrial parks (IPs) and export processing zones (EPZs), andearmark more land for building infrastructure to attract investment.

Hua Quoc Hung, head of the HCMCity Export Processing and Industrial Zones Authority (HEPZA), said the citywould switch to newer models of IPs and EPZs to attract investment, ensuring ithas appropriate incentives during the transition process.

There are 17 IPs and EPZs inthe city, and they have an occupation rate of 68 percent, according to Hung.

Only 120ha is available toinvestors in 2021 compared to 500-600ha a year in the last five years. 

The city has sought theGovernment’s approval for a 380ha IP in Binh Chanh District, a specialisedone prioritising innovative start-ups and producers and distributors in newindustries. 

The city is expected tohave 23 EPZs and IZs with a total of 5,797.62ha in future.

The infrastructure at many IPsand EPZs fall short of investors’ needs. 

Mostly built in the 1990s, manyhave deteriorated, especially their wastewater treatment facilities, withmany central wastewater treatment systems falling foul of environmentalregulations.

Many companies seeking toexpand cannot find enough land for lease, and rentals are too highcompared to EPZs and IPs in neighbouring provinces. 

Roads near EPZs and IPsare often too crowded, which leads to higher production costs andhits their competitiveness.

Other problems include ashortage of schools, accommodation and medical facilities for workers and theirfamilies, experts said. 

The limited availability ofskilled IT and management personnel is another problem for the zones. 

The city wants all EPZsand IPs to be “green, clean and hi-tech” by 2025 and plans to build newhi-tech zones for supporting industries to attract hi-tech businesses andinnovative start-ups.

Priority would be given tocurrent hi-tech investors, especially those adopting industry 4.0, andsupporting industries with high value-addition, Hung said.

“Building smart industrialparks and processing zones is a global trend, and the city is focusing on it.” 

Enterprises in EPZs andIPs should use high technology to better manage manufacturing processesand improve product quality, he said.

Information technology couldchange production systems when everything is automated, and helpmanagement easily oversee systems, he said.

In future HCM City would haveto compete with other provinces, and so its industrial parks would need toimprove their efficiency, he added.

More than 591 million USD wereinvested in the city’s EPZs and IPs in the first 10 months of the year, ayear-on-year increase of 7.2 percent, according to HEPZA.

Foreign investment accountedfor 270 million USD, a 19.1 percent decline.

Some 89.4 percent of freshforeign investment, or 81.2 million USD, was in the services sector, and it wasfollowed by machinery, electronics, plastics, and rubber.

Domestic investment increasedby 47.6 percent. There were 46 new projects with capital of 5.8 trillion VND (251million USD).

Hung attributed the decline inFDI to the impacts of the Covid-19 pandemic and the restrictions on travel.

The new investments went mainlyinto building factories and warehouses for rent, he said.

Many investors hadexpressed interest in investing in warehouses and high-risefactories, he added.

The city expects to receive awave of investments post-pandemic when US, European and Japanese investors movetheir production lines to Vietnam.

Last year it had attracted 8.3billion USD worth of foreign investment./.