To attract more investment, especially from overseas, Ho Chi Minh City needs to renovate and reform its export processing zones (EPZs) and industrial parks (IPs), said Tran Quang Truong, General Director of Tan Binh Industrial Park.

Their infrastructure, mostly built in the 1990s, had deteriorated, especially wastewater treatment facilities, with a number of central wastewater treatment systems being found to violate environmental regulations, Truong said at a workshop last week.

Many companies seeking to expand could not find enough land for lease in them and rentals were too high compared to EPZs and IPs in neighbouring provinces. Roads near EPZs and IPs are often overloaded, leading to higher production costs for their tenants and reducing their competitiveness, said Tran Trong Tien, a representative of enterprises in Tan Thuan Export Processing Zone.

Other problems included flooding, lack of schools, accommodation and medical facilities for workers and their families, Tien said. 

The limited availability of skilled IT and management personnel was also an issue. To address these problems, administrative procedures related to investment, labour and construction in the EPZs and IPs needed to be simplified to attract foreign investment.

The quality of life and working environment for workers needed to be improved. 

Dao Xuan Duc, deputy head of the HCM City Export Processing Zones and Industrial Parks Authority (Hepza), said the city would make all EPZs and IPs green, clean and hi-tech by 2025 and build new hi-tech zones for supporting industries.

The city targeted having 23 EPZs and IPs with an area of around 6,000ha by 2020.  Priority would be given to current investors in hi-tech  and parts supply industries with high value-addition.

The city is losing its advantages over neighbouring provinces, and one of the main reasons is its high land rental rates.

The average rental in its EPZs and IPs is 125 USD per meter square for a period of 40-50 years. In comparison, the figure is 74 USD in Dong Nai province, 76 USD in Long An and 43.7 USD in Binh Duong.

The city needs to improve the efficiency of land use to reduce rentals and also strengthen linkages with other zones in the southern region, Trinh Ngoc Vu an expert in economics said.

Last year the city’s EPZs and IPs attracted 772.3 million USD in investment, but only 290.8 million USD worth of foreign investment, a drop of 25.8 percent from 2017, according to Hepza.

Most projects were in technology-oriented industries, including food processing, chemical-rubber, information technology, and supporting industries.