"A New Wave Driving Investment in Industrial Clusters Nationwide"

According to the Industrial Cluster Development Plan to 2020 of the provinces and cities under central authority, the whole country will have nearly 1,500 industrial clusters with a total area of approximately 49,000 hectares, doubling compared to the current time.

To continue enhancing management efficiency and attracting investment in industrial clusters, recently, the Government of Vietnam issued Decree 68/2017/ND-CP (Decree 68) on the management and development of industrial clusters.

Many localities evaluate that the new policy will help manage and attract investment in industrial clusters more effectively.

Why is it difficult to attract investment?

Ninh Binh is one of the many localities that have successfully implemented the attraction of investment and development of industrial clusters.

Currently, Ninh Binh has about 25 industrial clusters with a total area of approximately 950 hectares.

According to Mr. Le Van Hoan, representative of the Department of Industry and Trade of Ninh Binh province, the industrial clusters in the province are developing quite rapidly.

Some industrial clusters have a high occupancy rate, such as Ninh Phong and Ninh Van...

Many clusters are also creating strong attractions with industrial and handicraft projects, helping the locality relocate production facilities causing environmental pollution to concentrated production areas such as the Ninh Van stone carving village; developing traditional crafts like the sedge mat craft in Dong Huong industrial cluster, the fine art wood craft in Ninh Phong village cluster...

However, through surveys, there are still some industrial clusters that find it difficult to attract production and business establishments into operation as well as find it difficult to attract investment in infrastructure business in industrial clusters.

Many industrial clusters have not yet received investment in a synchronized infrastructure system for internal roads, water supply and drainage, wastewater, and waste treatment... The reason is due to a lack of strong incentive mechanisms and policies.

According to the Department of Industry and Trade of Hai Duong province, the province currently has 33 established industrial clusters, but only two clusters, Luong Dien and Ba Hang, have infrastructure investors and have just completed the construction of the traffic system, water supply, and drainage.

Meanwhile, the remaining 31 industrial clusters have not yet received investment in a centralized wastewater treatment system...

The quality of industrial cluster planning is not high, the ability to forecast, calculate the planning demand, and the ability to meet the resources to implement the planning are still not practical, suitable to the local reality, causing quite a few industrial clusters to be "abandoned".

According to the assessment of the Department of Local Industry (Ministry of Industry and Trade), the implementation of the planning, investment, and infrastructure construction of industrial clusters overall is still slow and faces many difficulties.

The number of industrial clusters that have come into operation and attracted new investment projects has only reached 42.3% compared to the planning.

The issue of environmental protection in industrial clusters has not yet been paid attention to by localities and investors, not meeting environmental standards.

Most industrial clusters have not built waste collection areas and wastewater treatment systems.

The whole country only has 98 industrial clusters with wastewater treatment facilities in operation (accounting for 15.7% of industrial clusters in operation).

Meanwhile, attracting investment capital for industrial cluster infrastructure business faces many difficulties, as most industrial clusters are located in rural areas, with inconvenient transportation locations, and poor surrounding infrastructure...

More support to attract investment

Decree 68, effective from July 15, 2017, is expected to overcome previous shortcomings.

According to Mr. Nguyen Van Thinh, Head of the Industrial Cluster Management Department – Department of Local Industry, Decree 68 stipulates some new points such as: having incentive mechanisms and support for industrial clusters; determining technical infrastructure investors in difficult socio-economic areas; and stricter criteria for planning the establishment of industrial clusters.

Additionally, Decree 68 also clearly delineates the authority and responsibility of the Department of Industry and Trade, and the District People’s Committee on the principle of focal points in managing industrial clusters.

Simultaneously, a reporting and data-building mechanism; improving the business environment for enterprises through the implementation of a one-stop interconnected mechanism in administrative procedures...

"This is not a 'magic wand' that can immediately help manage and attract investment into industrial clusters, but it will be a new breeze, with more incentives, to promote investment in industrial clusters." Mr. Thinh said.

One of the notable new points in Decree 68 is the significant incentives for technical infrastructure business investment projects in industrial clusters, which will be exempt from land rent for 11 years.

Additionally, they can be considered for state investment credit loans of up to 70% of the total investment and enjoy other incentives as stipulated by law.

Moreover, production and business investment projects in craft village industrial clusters are also exempt from land rent for 11 years and can be considered for state investment credit loans of up to 70% of the total investment.

Meanwhile, technical infrastructure business investment projects in craft village industrial clusters are exempt from land rent for 15 years and can be considered for state investment credit loans of up to 70% of the total investment...

According to Mr. Ta Van Dong, Director of Truong Son Fine Art Wood Enterprise in Ninh Phong craft village industrial cluster (Ninh Binh province), with open policies and many incentives, in the coming time, many craft village enterprises in Ninh Binh will have more motivation to shift their investment to industrial clusters; moving towards concentrated production, minimizing pollution in craft villages.

At a recent training and discussion session on the implementation of Decree 68 and guiding documents for the Departments of Industry and Trade held in Ninh Binh province, many opinions expressed that the newly effective Decree 68 is expected to attract many enterprises to invest in industrial clusters.

However, as it is a new regulation, there are still some difficulties in the implementation process. For example, issues regarding taxes, investment procedures, licensing, and incentives...

Mr. Ngo Quang Trung, Director of the Department of Local Industry, said that during the implementation of Decree 68, there will certainly be challenges.

However, the most important thing is the compliance from local Departments of Industry and Trade.

Local departments must start implementing to create favorable conditions for enterprises, resolving difficult issues to make significant changes in attracting industrial cluster investment in the near future.

Besides Decree 68, the Government of Vietnam also has the Scheme “Development of Rural Trade in the period 2010-2015 with orientation to 2020”...

To develop industrial clusters, localities can mobilize additional resources from these programs.

The Department of Local Industry said that in the coming time, it will also soon complete the guiding documents to implement Decree 68 as a basis for the localities to implement.

The Department of Local Industry will continue to organize training and dissemination in many forms to local Departments of Industry and Trade to ensure unified viewpoints and regulations in this Decree.

Source: Bnews

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