Insufficient infrastructure obstructs foreign investors to EPZs, IPs

In a review of the investment and environment protection situation of the city’s IPs and EPZs in 2008, Hepza said facilities in IPs and EPZs, including power and water supply, and communication infrastructure did not meet the requirements of many foreign investors.

Another factor discouraging foreign investors was that construction costs and rent for factories were higher than in neighboring provinces, Hepza said in a report.

In 2008, Hepza received many foreign investors from around the world who came to feel out the investment environment at the city’s IPs and EPZs.

According to Hepza chairman Vu Van Hoa, many investors from the U.S., Australia, Germany and Japan needed to rent tens of hectares of land to execute projects for the production of contact-lenses, medical devices, photocopy machines, airplane components, industrial glass and construction materials. But the lack of land has prevented more tenants from coming in, as 96% of the land in IPs and EPZs has been rented by owners of 1,140 projects with investment capital totaling US$4.3 billion including 460 foreign-invested projects.

Hepza predicts the global economic situation will continue to impact on production at IPs and EPZs this year, and hence foreign direct investment and exports.

However, the authority sets a target of US$680 million of fresh investment to pour into the IPs and EPZs this year, including the increased investment capital of the operational projects.

In 2008, the city’s IPs and EPZs attracted US$681 million of new registered investment capital for 57 foreign and domestic projects including the added capital of the operational ones. The new investment capital was said to be 27% more than in 2007.

For environment protection at the city’s IPs and EPZs in 2009, it’s an optimistic signal when Hepza pledges to have all of the enterprises inside the industrial parks complete their preliminary wastewater facilities, 100% of harmful wastewater to be treated and 100% of the industrial parks complete their common wastewater facilities.

Currently, however, Tan Phu Trung Industrial Park in Cu Chi District is still constructing its wastewater facility and 40 other enterprises are still discharging untreated wastewater into rivers, not to mention that most of the industrial smoke from the IPs and EPZs is still untreated.

HCMC has 12 industrial parks and three export processing zones employing 244,000 workers with 70% of them from other provinces.

To increase the number of industrial parks in the city, the Prime Minister in December signed a document extending the city’s industrial park development plan with 1,740 extra hectares added and seven new industrial parks developed around the city between now and 2020.