Hanoi opens doors to smart city future

Smart city development shapes up to be one of the most ambitious plans for the capital city, Photo: Le Toan

Nguyen Duc Chung, Chairman of the Hanoi People’s Committee, said that the capital is poised to become a smart city based on key technologies of Industry 4.0. To this end, besides state funding, the city will have to raise resources from the business community.

“We will reclassify public services towards opening more opportunities for private investors to join in those services they are capable of offering, thus mobilising financial sources to feed the plan,” he said at last week’s Asia-Oceania Computing Industry Organisation (ASOCIO) Smart City Summit 2018 in Hanoi.

“In addition, we plan to maximally outsource services related to software as well as infrastructure of technology businesses, from data centres and security services to channel and other services to raise resources and talents to serve our smart city development plan,” he added.

The chairman elaborated that in order to realise the plan, Hanoi will soon submit to the government its master plan on smart city development and investing in technology infrastructure, and developing applications by 2020.

Accordingly, investment is expected to focus on transport infrastructure, security, healthcare, education, energy, housing development, and combating pollution, which are the sectors in which Hanoi is facing high pressure due to its rapid population growth and fast urbanisation.

The moves announced at the event attracting hundreds of representatives from 10 ASOCIO member countries, international experts, and hundreds of businesses, are considered a potent call on domestic and international investors with expertise in the fields to join in.

According to international experts, Hanoi is one of the three most attractive destinations in Vietnam for international technology groups, including companies from Japan, South Korea, the US, and EU countries. Siemens, GE, ABB, Volvo Buses, Roxtec, and Axis are just some of the prominent names.

“The potential for foreign investors to join smart city projects in Hanoi is great because of a lot of solutions on offer there. International groups have great potential to work closely with local Vietnamese partners to implement the solutions,” David Wong Nan Fay, chairman of the ASOCIO, told VIR.

“Digital infrastructure, Internet of Things, cyber security, and education for talents are among the most attractive targets to foreign investors interested in smart city development. To attract investor interest, Hanoi should launch programmes, including business-to-business and mission trips, to promote these opportunities to international investors,” he added.

The interest from investors intensified in August, when the prime minister approved the master plan for Vietnam’s smart and sustainable city development strategy in the 2018-2025 period, with a vision towards 2030. According to the plan, Hanoi is one of the three Vietnamese cities to get a master plan on smart city development approved by 2020. By 2030, Hanoi, Ho Chi Minh City, Danang, and Can Tho are all set to become smart cities. Utilising the concrete strategies in the plan set forth by the government, investors are now confident in the development of future investment plans, with fewer fears of unpredictable changes, which have been an issue in the past.

To attract more financial resources for the smart city development plan, Hanoi has announced a list of potential foreign partners the city targets for investment. Japan, South Korea, Singapore, Taiwan, the US, the UK, and other EU countries are among the names.

It is easy to understand why Hanoi targets these foreign investors. Currently, they are Vietnam’s biggest foreign investors and have the strong expertise Hanoi is looking for to realise its plan. Japan has expertise in IT solutions, environment solutions, high-tech agriculture, and energy efficiency, while South Korea has advantages in electronics, energy, and heavy industry.

Singapore has strengths in real estate, education, healthcare, environment, and trade services. And investors from the US, the EU, and the UK have expertise in high-end services, financial services, healthcare, education, energy, and environmental protection.

What is more, Hanoi has also completed the urban zoning plans for the Northern Red River Area and economic sectors, with a list of prioritised investment projects set to be named. That is good news for foreign investors, as planning is very important for smart city development.

Kari Kahiluoto, Finnish Ambassador to Vietnam We are interested in smart city projects in Danang, Ho Chi Minh City, and Hanoi. We have been more engaged with Ho Chi Minh City for a longer time because of its innovation co-operation. IT and Big Data, intelligence centres, web management, and e-government are among the sectors that are of most interest to investors. We are involved from the beginning to the end – from networks and applications to internet security and more. Hanoi and Vietnam have great advantages in trying to attract investors. The country is now an attractive destination to foreign investors. Besides, it also has a lot of international funding from international banks and financial institutions. However, there are many kinds of challenges facing Vietnam and Hanoi in smart city development, such as the bureaucratic market and unclear regulatory systems which companies have to try to avoid and overcome. Thus, the government should create policies to encourage and facilitate investment from private companies. Nirmal De Silva, Co- founder and CEO, Paramount Realty (Pvt) Ltd. Hanoi and the Vietnamese government have now really focused on building smart cities. The same attention is also paid in Danang and Ho Chi Minh City. Hanoi is one of the fastest-growing cities in the world with an impressive GDP growth rate of 7.5 per cent. So the city has huge potential to attract investors. Hanoi is also in need of better technology and partnerships to implement its smart city development. Therefore, foreign investors have a lot of opportunities to collaborate closely with local partners in order to create sustainable smart city development. Real estate, infrastructure, energy, healthcare, and education are definitely the most attractive sectors to foreign investors in this area. To attract investors’ attention, Hanoi needs to open up more dialogues with regional peers. To facilitate greater collaboration opportunities, the city needs to attend many conferences engage with prospective partners who have greater expertise, and share knowledge and best practices with region peers. From an education perspective, it is important to get young people to understand smart city development. Vu Minh Tri, Deputy general director, VNG Corporation Vietnam is facing rapid urbanisation at a rate of 37.5 per cent. The number of urban areas has increased to 813. The urban population in Hanoi and Ho Chi Minh City now makes up 30 per cent of the country’s total urban population. Therefore, smart city development is an inevitable trend. “Connected City” has an especially important role in smart city development. Accordingly, not only infrastructure, but also databases and infrastructure-based applications need to be connected with one another to help cities optimise their resources. Realising great prospects from smart city development projects, VNG Corporation – one of the leading technology companies in Vietnam – has developed computing services and smart solutions as one of the company’s four key products in the new development period. At present, VinaData, a 100-per-cent subsidiary of VNG, is supplying computing solutions to help deal with thorny urban issues, including traffic jams, energy quality, waste treatment, and education, aimed towards developing a smarter and safer city.