Economic zone remains capital thirsty

The Bo Y bordergate economic zone near Laos and Cambodia has not received sufficient State capital to meet the demand for infrastructure projects.

Only 10 investment projects with total registered capital of VND175 billion (US$8.3 million) are operating in the zone, located in Kon Tum Province in the Central Highlands, according to Lao Dong (Labour) newspaper.

The projects have produced total revenue of VND6.6 billion ($317,300) a year and provided jobs for 190 employees.

The zone, which covers 70,438ha, is part of the economic development triangle recognised by the governments of Viet Nam, Laos and Cambodia in 2004.

Under a Government decision signed in 2008 to develop the zone, it was classified as a second-grade border urban centre that would contain industrial parks, urban areas and an administration centre by 2025.

To meet the targets, the zone needed VND79.2 trillion ($3.8 billion) from the Government for the 2011-15 period to build infrastructure. However, the State has budgeted VND240 billion ($11.5 million) per year for the zone.

Since 2005, the State has invested more than VND1.65 trillion ($78 million) for 58 infrastructure projects, and of these projects, 27 have been completed and 31 are under construction.

Policies for developing the zone are still inadequate, causing difficulties for both administrative agencies and investors, according to the provincial People’s Committee.

In a desolate area with mountains and forests, the Bo Y bordergate zone needed special incentives for investors, local officials have said.

Under normal circumstances, investors must negotiate with local residents when they take land for their projects. But this policy does not take into account the topography of the area and its special needs.

Nguyen Huu Hai, deputy chairman of the provincial People’s Committee, said the Government should outline specific policies for economic zones like Bo Y, including more State funds for investment and more incentives for taxes, land rental fees and loans.

Tags: Vietnam economic zones