Poor infrastructure threatens EZ growth

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Mong Cai bordergate with China is reportedly one of the best performers among national and international bordergates countrywide when it handled around $16 billion worth of exports in the past five years.

It handles over 3.2 million tonnes of goods on average annually and eyes export growth averaging 25 per cent per year.

Besides, approximately 700 enterprises have placed headquarters or representative offices in the area.

“In the past five years, Mong Cai bordergate economic zone (EZ) paid around VND1 trillion ($48.3 million) and sometimes nearly VND1.7 trillion to state coffers every year, a record among bordergate EZs nationwide,” said Mong Cai People’s Committee deputy chairman Nguyen Tien Dung.

Meanwhile, Mong Cai EZ only operates 11 bonded warehouses and goods depots with nearly 15,000 square metres in total area.

“Warehouses must be three-fold bigger current capacity to meet the EZ’s ever-increasing development requirements,” Dung said, adding that poor infrastructure was due to lacking investment funds.

Under the Decree 29/2008/ND-CP dated March 14, 2008 governing industrial zones, export processing zones and economic zones, Mong Cai EZ each year received from VND9.5 billion to VND30 billion from the state coffers for infrastructure development, far behind its actual development requirements.

However, Mong Cai EZ authorities were previously allowed to retain half of its revenues for reinvesting in the zone’s infrastructure in accordance to the Decision 675/TTg dated September 18, 1996 on trial applications of some preferential policies for Mong Cai bordergate and the prime ministerial DecisionNo. 53/2001/QD-TTg dated April 19, 2001 relating policies of bordergate economic zones.

“Under the decree [the Decree 29/2008/ND-CP], I think it is unreasonable to treat equally between EZs that contribute thousands of billions Vietnam dong to state coffers every year and those that could only pay in several billions dong,” said Quang Ninh People’s Committee deputy chairman Nguyen Van Thanh.

Thanh added that local authorities found it impossible to map out sustainable EZ development strategies if they recevied only negligible investment from the state budgets.

Thanh said that 26 infrastructure projects outlined in the Mong Cai international bordergate city development plan, the Halong-Mong Cai highway and two customs clearance depots were awaiting capital allocations from the state budget to get underway.