With its neighbouring provinces offering competitive land rentals and other incentives at industrial parks to attract investors, HCM City needs to step up its game too.

At an industrial park in HCM City. Neighbouring provinces have caught up
with the city in attracting investment in industrial clusters. — VNA/VNS Photo

There are 17 industrial parks and processing zones in the city and they have an occupation rate of 68%, with specialised industrial parks, except the Quang Trung Software City, not attracting much interest from enterprises.

For example, the Automotive- Mechanical Industrial Park established three years ago on an area of nearly 100ha in Cu Chi District has attracted only 12 companies who have invested around VND900 billion (US$38.8 million) and lease around 20ha, or a fifth of its area.

A recent study conducted by the HCM City Export Processing Zone and Industrial Park Authority (Hepza) and a research team from the HCM City University of Economics found that the city’s advantages over neighbouring localities with regard to attracting investment in its IPs and EPZs have reduced since the latter are offering competitive land rentals and other incentives.

The infrastructure at many of the city’s IPs and EPZs fall short of investors’ needs.

While the average rent is US$74 per square metre in Dong Nai for a lease term of 40-50 years, $43.7 in Binh Duong and US$76 in Long An, it is US$125 in HCM City.

The city needs to restructure and switch to newer models of IPs and EPZs now to continue to attract investment, ensuring it has appropriate mechanisms and policies during the transition process.

Dau tu (Investment Review) newspaper reported the city has sought the Government’s approval to make 1/2,000 scale plan for a new 380ha industrial park in Pham Van Hai commune, Binh Chanh District.

It will be a specialised industrial park prioritising innovative start-ups and producers and distributors in new industries and technologies.