Phu Tho province has made a lot of effort to improve the investment climate and attract more projects in recent years, but outcomes are limited and do not match local potential. In the 2011 - 2015 period, the province is resolved to “get refreshed” and adopt solutions to create a more open, friendlier business and investment environment. To learn more, Vietnam Business Forum has a talk with Mr Hoang Cong Thuy, Director of Phu Tho Department of Planning and Investment. Ngo Khuyen and Tran Trang report.
In the past time, what mechanisms and policies has Phu Tho province applied to attract investors and support local enterprises?
Phu Tho province has issued many easy-going policies to roll out the red carpet to welcome investors. For example, Decision 2847/2009/QD-UBND on investment support for projects in Phu Tho province. Accordingly, investment projects in the province will be supported with land access, site clearance, labour training and other preferences, in addition to general provisions stipulated by the Government.
Phu Tho has also stepped up administrative reform under the "single-window" mechanism. Investors only need to come to the Department of Planning and Investment or the Phu Tho Industrial Zones Authority to submit and receive results. The time for completing investment registration has been shortened to five, even three days, from 10 days. Administrative procedures are no longer a distressing nuisance for enterprises. The province has set up a plan to improve provincial competitiveness for the 2011 - 2015 period and is seeking polls for issuance and enactment. This will help boost the transparency and clarity of information - a very important aspect when investors consider an investment project.
The province also attaches much importance to mobilising resources for social and economic infrastructure construction. Phu Tho has strengthened cooperation with central authorities and neighbouring provinces like Vinh Phuc and Yen Bai to accelerate key related traffic projects. The locality has also planned the construction of nine industrial parks, a service complex and 20 industrial complexes covering a total area of 5,000 ha. It will also devote more than 3,000 hectares for the development of Lam Thao Industrial Park and upgrading of Phu Ha Industrial Complex (Phu Tho Town) into industrial - service - urban complex.
It also pays attention to promoting investment by advertising, organising investment cooperation promotion conferences and seminars in Vietnam and in other countries like Japan, South Korea and China. Investors will be offered free investment procedures when they invest in the province.
In addition, Phu Tho provides support in site clearance, land compensation and credit access for investors. Provincial leaders always go side by side with investors, listening to their problems and seeking solutions in order to create the most favourable conditions for them.
How do you assess investment attraction results in the province?
As of June 30, 2011, Phu Tho licensed 112 FDI projects with a total registered capital of US$619.5 million, of which 83 projects had disbursed US$372.8 million out of their registered capital of US$440.5 million. Phu Tho province is the most attractive destination in the northern mountainous region. FDI projects are registered for various fields like industry and services. They have significantly contributed to provincial GDP growth, created jobs for workers, and improved people's lives. In addition to FDI projects, the province has granted investment licences for nearly 100 domestic projects with an aggregate registered capital of US$1.5 billion. Typical projects include Saigon - Phu Tho brewery (VND433 billion), shipbuilding yard (VND422 billion), and Dream City (US$1.366 billion).
However, most projects have small operating scale, the amount of disbursed capital remains low in relation to registered capital, and project performance is not very high. Foreign-led projects average an investment amount of only US$5.5 million. FDI projects have low added value and insignificant support to the local budget. And, up to 90 percent of projects are invested by South Koreans.
Investment projects are mainly concentrated in some localities like Viet Tri City, Thanh Ba district and Tam Nong district, not far-lying regions. Moreover, many projects are using low technologies, backward equipment, and environmentally unfriendly operations.
This reality is partly attributed to the low starting point of Phu Tho economy and poor industrial and service establishments. Centrally funded projects are not carried out synchronously, leading to relatively poor quality and efficiency. Phu Tho is a poor province and lacks experience and vision for developing modern industries and services. Besides, awareness and coordination of local authorities in investment attraction are lax.
Could you tell some directions and measures to attract more investment into Phu Tho province in the coming time?
Phu Tho province is striving to become a basically industrialised province with a modern, environment-friendly economic structure and sustainable development by 2020. To realise this objective, the province will focus on following tasks:
Accelerating the completion of investment attraction mechanisms and policies in a synchronous manner: Phu Tho will consider supplementing and amending investment criteria to introduce the list of preference investment projects in the 2011 - 2015 period.
Continuing administrative reform: Phu Tho province will continue reviewing, streamlining, shortening and reducing unnecessary procedures, promote a sense of responsibility and quality of advice, and instruct investors to complete investment procedures. The province will strengthen inspection and determine to revoke investment certificates of lagging projects.
Developing synchronous transport infrastructures: Phu Tho will continue cooperating with other ministries and localities to speed up the construction of key projects like Hanoi - Phu Tho - Lao Cai Highway and Ho Chi Minh Road, and the upgrading of existing national highways, provincial roads, and roads to industrial clusters.
Phu Tho will cash in on resources to invest in transport infrastructure development, industrial parks, industrial complexes, roads, water supply and drainage systems, power grids, and environmental treatment facilities. The province will try its best to provide essential services (electricity, water and telecom) for industrial parks.
In addition to supports for site clearance, the province will also provide good consultancy and personnel training for enterprises.
Particularly, the province will directly contact potential investors to convince them to do business here.
Phu Tho will strive more to create a better investment environment. The province is committed to creating the most favourable conditions for investment projects to start good operation as soon as possible.
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