Many industrial parks in Ho Chi Minh City, although decided to be established many years ago, are still stagnant because the land has not been cleared.
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| Vinh Loc Industrial Park. Photo : Le Toan |
The main problem is land clearance.
“Currently, the clean land fund to attract investment in industrial parks in Ho Chi Minh City is only 74 hectares, but it is scattered and fragmented in many areas. Many land plots in industrial parks are stuck in site clearance, so there is not a large area to attract investment,” Ms. Nguyen Thi Bich Ngoc, Head of Investment Management Department of Ho Chi Minh City Export Processing and Industrial Zones Authority (Hepza), raised difficulties in attracting investment at a recent meeting.
Lack of land fund is the main “bottleneck” preventing Ho Chi Minh City from attracting large projects and foreign investment capital into the city has continuously decreased in recent years. Many industrial parks in the city were established by the Prime Minister 20 years ago, but have not been built yet due to land clearance problems.
At the end of June 2024, Hepza issued Document No. 1784/BQL-VP reporting to the Ho Chi Minh City People's Committee on industrial park projects that are slow to be implemented. In particular, in Binh Chanh district, there are up to 4 industrial parks with an area of hundreds of hectares that are slow to be implemented. Of which, Phong Phu Industrial Park with an area of 67 hectares, established in 2002, has not yet built infrastructure to lease land.
According to Hepza's report, the Phong Phu Industrial Park Project has not completed site clearance. The investor has not yet signed a land lease contract with the Department of Natural Resources and Environment. To date, the Project has not yet implemented infrastructure construction and has not yet come into operation. Because the Project has been stalled for 20 years, the remaining operating period is only 30 years. Hepza believes that with such an operating period, it will be difficult to attract investment.
Also located in Binh Chanh district, the Vinh Loc Industrial Park expansion with an area of 56 hectares has not been implemented. The project has announced land acquisition and implemented land survey, measurement, and counting, but is currently suspended because it has not been able to sign a compensation contract with the Binh Chanh District Compensation and Site Clearance Board.
It is known that Cho Lon Import-Export and Investment Joint Stock Company (the investor of the infrastructure of Vinh Loc Industrial Park expansion) is waiting for the competent state agency to re-evaluate the investment costs in the Project to carry out the final settlement of the conversion from a state-owned enterprise to a joint stock company. Furthermore, the increase in land prices in the Project area has led to an increase in compensation costs for site clearance, making compensation difficult, affecting the investment efficiency of the Project.
Also in the same deadlock is Vinh Loc 3 Industrial Park with an area of 200 hectares. This project is stuck in compensation for site clearance and resettlement, so it cannot be implemented.
Unlike the above projects, the Le Minh Xuan 2 Industrial Park Project with an area of 319 hectares is stuck because the investor, Le Minh Xuan 2 Industrial Park Investment Joint Stock Company, has not yet terminated the cooperation contract with capital contributing partners. Therefore, the Project cannot carry out the next steps.
Urgently add 11 new industrial parks
According to Hepza data, Ho Chi Minh City is planned for nearly 6,000 hectares of industrial land, but up to 1,500 hectares are stuck in legal or site clearance issues.
Ms. Nguyen Thi Bich Ngoc, Head of Investment Management Department of Hepza, said that the problems related to investing in new industrial parks in Ho Chi Minh City are mainly related to compensation for site clearance, public property... This is a difficult problem that has existed for many years. 
In 2024, Hepza only set a modest target of attracting investment of 550 million USD in export processing zones and industrial parks. This target is considered feasible in the context that the city only has 74 hectares of "clean" industrial land to attract investment. "The city is still carrying out the work of removing obstacles to add new land funds to attract investment," Ms. Ngoc informed.
While many industrial parks are facing difficulties in site clearance, all expectations are focused on Pham Van Hai I and II Industrial Park (Binh Chanh District), with a total area of 668 hectares. Compared to the construction of other industrial parks in Ho Chi Minh City, Pham Van Hai I and II Industrial Park is much more favorable because 97% of the land fund here is agricultural land managed by Ho Chi Minh City, but the economic efficiency is low because the land is heavily contaminated with alum and is always affected by saltwater intrusion, so site clearance does not take much time.
Currently, Hepza is completing investment procedures for Pham Van Hai Industrial Park I and II. According to the plan, this industrial park will start construction in 2025 and at the earliest, land will be available for lease by 2026 or 2027.
To have more industrial land to attract investment in the coming years, Hepza proposed to add a series of new industrial parks. Mr. Nguyen Thanh Binh, Head of Hepza Construction Planning Department, said that the Management Board coordinated with departments, branches and localities to find inefficiently exploited agricultural land and proposed to convert it into land for industrial and service development.
“We have sent a document proposing to the Department of Planning and Architecture and the Department of Planning and Investment (the two agencies in charge of drafting the adjustment of Ho Chi Minh City's planning) to add 11 new industrial parks with a total area of 4,127 hectares to the planning for the coming years,” said Mr. Binh.
In order not to miss the new wave of investment, Mr. Dao Xuan Duc, Chairman of the Association of Industrial Park Enterprises in Ho Chi Minh City, said that the wave of investment shifting from other countries to Vietnam is still continuing. If Ho Chi Minh City is slow to remove bottlenecks in land funds, it will miss the opportunity.
He likened these investors to “eagles”, but Ho Chi Minh City currently only has a “sparrow’s nest”, not enough to attract and retain “eagles”. “If Ho Chi Minh City cannot handle the land bottleneck, it will be difficult to develop industry, without land it will be impossible to attract investment”, Mr. Duc emphasized.
Source: https://baodautu.vn/nhieu-khu-cong-nghiep-o-tphcm-be-tac-vi-vuong-mat-bang-d222177.html
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