Danang struggles to find investors for major industrial park projects

Vietnam's central city of Danang has been searching for investors to build infrastructure at three major industrial parks for almost three years.

The central city is now home to six IPs, one high-tech park, one information-technology (IT) park, and one expanded industrial cluster. Among the six IPs, four have reached an occupation rate of 100%, namely Danang, Hoa Khanh, Danang Seafood Service, and the expanded Hoa Khanh. Hoa Cam and Lien Chieu IPs' figures are 87.27% and 56.14%, respectively.

With the IPs reaching their full occupancy rate, the municipality issued plans in 2019 to build three new ones, namely Hoa Cam phase 2, Hoa Nhon, and Hoa Ninh. The city held auctions to build infrastructure for the facilities in April 2020, but the bidders did not meet its requirements. In 2022, Danang conducted another round of auctions but was unable to find suitable investors again.

The 120-hectare Hoa Cam phase 2 IP, with an investment of VND2.1 trillion ($89.23 million), is now subject to another draft plan calling for investors, which is slated for completion in the first quarter of next year.

The 400-hectare Hoa Ninh IP, with an investment of VND6 trillion ($254.94 million), is facing planning problems as the municipality wants to reduce it to 237 hectares. Once the new plan is approved, the city will submit it to the Ministry of Planning and Investment for appraisal and the Prime Minister for approval.

The 360-hectare Hoa Nhon IP, with an investment of VND5.6 trillion ($237.94 million), is facing an issue related to the conversion of forest land and is waiting for an appraisal by the Ministry of Agriculture and Rural Development and approval by the Prime Minister.

Danang eyes quick solutions without auction

Tran Van Ty, vice head of the Danang Hi-tech Park and Industrial Zones Authority, said there are two options to select investors for the IP projects. The first is to follow the Law on Bidding 2013. After calling and rating investors, authorities will approve an investor for the project if there is only one qualified bidder, or it will have to conduct a further round of bidding if there is more than one qualified bidder.

Danang has been following this method for the Hoa Cam phase 2 IP project for over a year, but has only completed the first step and has yet to hold auctions. The full process would take up to three years, Ty stressed.

The second option is to follow the Law on Investment 2020, which includes approvals for the projects and investors without holding auctions for land use rights, and would take only one year to complete, Ty estimated.

For the Hoa Ninh IP project, Danang plans to proceed following the Law on Investment 2020 in order to speed up the process, he said.

Danang has so far attracted 515 projects to its high-tech park and industrial parks, including 128 foreign-invested ones with registered capital of nearly $2 billion. The total includes 387 Vietnamese projects with registered capital of VND30.49 trillion ($1.3 billion), according to the Danang Hi-tech Park and Industrial Zones Authority (DHIPIZA).

In 2022, DHIPIZA granted investment certificates to 25 projects - four FDI ventures worth $65.34 million and 21 Vietnamese projects worth VND3.95 trillion ($168.53 million).