Accelerating billion-dollar investment commitments

Most of Becamex-Binh Phuoc industrial-urban complex planned area has yet completed site clearance phase

Some days ago, the southern province of Binh Phuoc hosted a major investment promotion conference where provincial leaders granted investment proposals and certificates with the value surpassing VND23 trillion ($1 billion).

There were 11 foreign investment projects capitalised at $312 million in total registered capital, with investors coming from different countries and territories such as Leoch Battery, Hank Cuk Carbon or Yongsung and Miyoung Song, to name but a few.

Neighbouring two pillars of the Ho Chi Minh City-Binh Duong-Dong Nai development triangle, it is understandable why the province is so alluring to investors.

Binh Phuoc is not a single location enjoying tempting billion-dollar commitments from domestic and foreign investors.

Earlier this year, another southern location, Bac Lieu, had reported a record VND110 trillion ($4.86 billion) of investment committed at its 2018 investment promotion conference.

The registered projects included the $450 million solar power project of Korean investor SK Group.

Most recently, at its 2018 investment promotion event, Can Tho city in the Mekong Delta approved the investment proposals and certificates of 10 projects valued about VND8 trillion ($354 million).

The city also inked cooperative agreements with the total committed investment value reaching VND85 trillion ($3.76 billion).

In the year to date, other billion-dollar investment commitments were seen in Soc Trang province in the south (nearly $5.4 billion), Thai Nguyen province in the north-east ($2.07 billion), and particularly in Hanoi ($17 billion).

These investment commitments attest to the success of investment promotion conferences across Vietnamese localities as well as the country’s attractive investment climate. But one question remains: what is really behind these billion-dollar investment commitments?

Addressing Binh Phuoc’s recent investment promotion conference, Vietnamese Prime Minister Nguyen Xuan Phuc revealed his concerns: “Can the licensed projects be executed swiftly?” and ordered localities not to leave licensed investment projects on “the drawing board.”

This was not the first time the PM talked about this matter. At the investment promotion conference in the Mekong Delta region’s Hau Giang province last year, the PM stressed the importance of putting investment projects into work.

In fact, billion-dollar commitments were presented at most annual investment promotion conferences across Vietnam, but the number of investment proposals realised and the number of operational investment projects is another story.

Right in Binh Phuoc province, the much-expected Becamex-Binh Phuoc industrial-urban complex is showing delays three years after starting and most of the planned space has not yet finished the site clearance. The project, however, has been picking up pace recently.

Early this year, Nghe An province in the central region held a meeting with investors where 26 investment proposals and certificates were approved, with the cumulative value exceeding VND13 trillion ($582 million).

After the meeting, the provincial leaders asked licensed investment projects to begin construction before June 20, 2018. In fact, except for the Thailand-backed $1 billion Hemarai Industrial Zone project, which has already started construction, not many projects from the list have taken further steps.

Also in the central province of Nghe An, another billion-dollar project, Kobelco Steel, has shown poor progress despite being licensed in 2010.

In 2007, of a total $72 billion of committed FDI poured into Vietnam, more than half of which belonged to projects that later had to be revoked.

This explained why experts assume that the upcoming major conference to review 30 years of FDI attraction in Vietnam will provide ideal opportunities to draw valuable lessons to help along the realisation of billion-dollar investment commitments.