Time to get into the zone to avoid waste

January 24, 2013 | 16:59
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Unused space in operating industrial zones is proposed to be taken back to avoid waste to state coffers.

In a recent meeting with Can Tho City People’s Committee, head of Can Tho Export Processing and Industrial Zones Authority Vo Thang Hung proposed Can Tho management authorities take back 10ha at Tra Noc 2 Industrial Zone in Can Tho city given to Hyundai-Vinamotor Auto JSC (now Vietnam Motors), but is unused by the firm for the past eight years.

“When the IZ is short of land catered to industrial production for leasing to other investors,  more than 10ha of Vietnam Motors sits idle for quite a long time and the investor does not have to pay land rent, causing a great waste,” said Cipco director Vo Ngoc Ho.
Cipco is the developer of Tra Noc 2 IZ.

Ho said each year Cipco as the IZ developer would collect $100,000 land rental if this 10ha was taken back and give to another investor at a rate $1/sq.m/year.

“In the past years, the management has shared investors’ difficulties in the context of a hostile business climate, allowing investors to delay project implementation many times. However, if projects do not have the potential for scope expansion to use up given land, issuing decisions on taking back unused land is rational,” said Can Tho City People’s Committee deputy chairman Vo Thanh Thong.

In fact, Vietnam Motors was approved to lease 35ha at Tra Noc 2 IZ to build a factory and parts manufacture in November, 2004. The project was given 15.6ha land in its first phase.

At that time, the investor pledged the factory would come online after 18 months construction after receiving land. However, 16 months later the investor just handled auxiliary project items like setting fences, building internal roads, sluice gates or a guard house.

In March 2006, Can Tho EPZ and IZ Authority sent a dispatch urging the investor to scale up efforts to accelerate project’s pace in the second quarter and consider its actual demand for land lease. In case the investor did not use up all given land space, the authority would take back part of the given land to give other investors.

In September 2006, the investor had yet to build the factory. Can Tho city authorities then worked with the investor who attributed difficulties in raising capital to the project’s delay and pledged to begin construction after December, 2007.

However, at the pledged time the investor used just 5ha out of 15.6ha given for building its factory.

In this context, Cipco sent a dispatch urging investor to quicken pace and proposed city authorities take back 10ha unused land to give other investors.

Upon the proposal, Can Tho City People’s Committee had assigned relevant government agencies review the legal basis for taking back this unused land, but until this time the local government has yet to deliver final decision on the case. 

On paper, Vietnam Motors project involves building a factory having an annual capacity of 5,500 minibus and 12,000 light van units (10 per cent of this will be exported), attracting 3,000 labourers.

Upon expectations the project could be socially and economically beneficial, the project investor was given a number of incentives, such as free land rent in the first 10 years after receiving land with preferential infrastructure fee 10 UScents/sq.m/year.

By Phu Khoi


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