Out of favour zones cry foul at state budget list

All zones are competing for a smaller bite of the pie

The decision was issued by Prime Minister Nguyen Tan Dung last week, following a Ministry of Planning and Investment (MPI) proposal in early August.

According to the decision, the economic zones of Chu Lai in Quang Nam province, Dung Quat in Quang Ngai, Dinh Vu-Cat Hai in Haiphong, Nghi Son in Thanh Hoa, Vung Ang in Ha Tinh and Phu Quoc-Nam An Thoi in Kien Giang will enjoy at least 65 per cent of state budget arranged for coastal economic zones during 2013-2015.

The economic zones were rated with high scores in a MPI survey based on the indicators of goods transportation, airport convenience, key investment projects, ability in attracting investment and their strategic position to regional development. This means those economic zones will have more money for infrastructure development in the next three years than others.

But while this decision is good news for the six economic zone management authorities and investors doing business there, it is a bad news for management authorities of other zones.

“This selection makes economic zones already with fewer advantages have more difficulty in luring investment projects,” said Man Ngoc Ly, director of the Management Authority of Binh Dinh Economic Zone, where US-based ITC Spectrum LLC is building a $250-million Marriott resort.

Vietnam has 15 coastal economic zones and all of them are established to be driving forces in boosting private investments in host provinces.  

Actually, six selected economic zones are now considered as the most effective ones with the appearance of huge investment projects. For example, Dung Quat Economic Zone has Vietnam’s first oil refinery and Doosan manufacturing complex, the largest industrial manufacturing complex in Vietnam. Vung Ang Economic Zone is home to $10 billion steel manufacturing and seaport complex of Taiwan’s Formosa Plastics Group and Nghi Son is home to $6 billion Nghi Son oil refinery.

However, the other zones not on the list are also destinations where foreign investors are committed to build huge projects. Kobe Steel, the fourth world-largest steel maker will build a $1 billion iron-nugget in Dong Nam Nghe An Economic Zone in central Nghe An province and in central Khanh Hoa province’s Van Phong Economic Zone, South Korea’s Daelim Corporation and Japan’s Sumitomo Corporation plan to build an oil refinery and a thermal power plant, respectively.