10:15:59 PM | 28/6/2011
“To enhance the efficiency of foreign direct investment (FDI) attraction, Quang Ngai province will focus on upgrading infrastructure, speeding up investment site clearance, and accelerating administrative procedure reform to create a better investment environment and develop high-quality human resources,” said Mr Tran Van Nhan, Director of Quang Ngai Department of Planning and Investment in an interview with reporter Trung Kien.
Could you give us an overview of domestic investment attraction in Quang Ngai province in 2010?
The economy of Quang Ngai province has recorded considerable growth in recent years. The province has more policies to encourage and attract domestic and international investors into industrial parks and economic zones, particularly those operating in the oil and gas sector, services, and heavy industries.
In 2010, Quang Ngai province attracted 34 domestic investment projects with total registered capital of about VND6,000 billion, or an average of VND176 billion per project, of which VND2,000 billion was disbursed in the year. There was a decrease in both project number and value from 2009, but the average scale of projects increased. Some big projects are Son Tra 1 hydropower plant (VND1,438 billion), Son Tra 2 hydroelectric plant (VND397 billion), Quang Ngai international general hospital (VND800 billion), and Vinaconex water supply project (over VND500 billion). By the end of 2010, Quang Ngai province had 240 domestic investment projects with combined registered investment capital of VND40,000 billion, an average of VND167 billion per project. The Dung Quat Economic Zone housed 77 projects with total registered capital of VND3,084 billion, and other areas attracted 86 projects worth VND23,000 billion.
In general, investment projects in Dung Quat Economic Zone and other industrial zones have disbursed, on average, 80 percent of registered capital. However, projects outside industrial parks and economic zones are being carried out more slowly than scheduled, mainly because of sluggish site clearance.
Together with domestic investment, FDI also serves an important role in socioeconomic development as it helps promote economic restructuring. So, how has the province attracted this source of investment capital?
To date, it is clear that FDI has become an important source of capital for development investment of the country in general and Quang Ngai province in particular, speeding up economic restructuring towards industrialisation and modernisation. Thus, Quang Ngai province has concentrated on creating an attractive investment environment by upgrading infrastructure, reforming administrative procedures and attracting talented people.
In 2010, Quang Ngai attracted six FDI projects with total registered capital of US$400 million, an increase of 14 times from 2009. Particularly, PetroVietnam Oil Stockpile Company Limited (PVOS) invested US$340 million into an underground oil storage facility. However, the disbursed capital was only US$60 million. One of the large-scale projects operating in Dung Quat Economic Zone is Guang Lian steel plant project. Many investors from South Korea, Japan and the United States have arrived in Quang Ngai province to survey and seek investment information and opportunities.
By the end of 2010, Quang Ngai province attracted 21 FDI projects worth US$5.3 billion, of which Guang Lian steel plant project accounted for US$4.5 billion (initial registered capital of US$3 billion). On average, an FDI project has an investment capital of US$181 million. Six projects have been put into operation, one has been suspended, 12 projects have completed land-leasing procedures, and two projects have their license pending. These figures show that FDI capital flows in Quang Ngai remain weak.
In 2011, FDI capital is expected to continue to flow into the Dung Quat Economic Zone, although the overall value will drop as no heavy industry projects are licensed. In 2011, the province will attract six FDI projects with an aggregate registered investment capital of about US$200 million, an average of over US$33 million per project. It will also see foreign investors disburse US$140 million in the year. As a result, the number of FDI projects in 2011 is expected to equal 2010, but the value falls by half. The Dung Quat Economic Zone is expected to draw three projects with some US$180 million; another industrial park hopes to house one project worth US$2 million; and non-industrial park areas are forecast to have two additional FDI projects valued at US$18 million.
What are drawbacks for Quang Ngai province in FDI attraction?
Notwithstanding certain results in FDI attraction, the investment environment of Quang Ngai province is not actually attractive to foreign investors. The amount of FDI capital attracted in the past time doesn’t match local potential and the number of FDI projects is far behind many other provinces and cities in the country. It is clear that elements that meet requirements of investors are not very impressive, particularly weak infrastructure; insufficient investment planning for localities, fields and industries; unfavourable business investment; undeveloped logistics market; low skill and unprofessional workforce; weak information and communication systems; weak material supply; and unscientific administrative system in the eyes of foreign investors. In addition, mechanisms, policies and administrative procedures concerning foreign investment licensing are inconsistent and unattractive to investors; and investment promotion activities are not very effective either. Hence, the number of FDI projects attracted remains modest relative to the province’s potential.
What solutions will the province focus on to attract more FDI and pursue sustainable development in the coming time?
To continue improving conditions and effects of FDI attraction, Quang Ngai province will focus on speeding up the progress of building and approving needed plans; review, supplement and adjust improper plans, particularly land-use planning, to help investors determine and establish their projects. The province will continue calling for State finance and ODA capital to build and upgrade infrastructure and seek all available investment sources to develop service sectors to meet the demand of investors. Quang Ngai will proactively guide its competent organs to speed up land clearance for investors, especially large-scale projects invested by investors with the willingness and capability to disburse investment capital. It will also review business management and environment issues to boost consistency and create a more favourable investment environment. Besides, we will focus on developing high-quality human resources, one of three breakthrough tasks that the 18th
Provincial Party Congress has identified. This strategy is hoped to provide a high-quality workforce for the province in the coming years to meet the demand for local industrialisation and modernisation.