Current status and solutions to improve the quality of construction and implementation of development planning of industrial parks in Vietnam

The work of developing industrial park development planning

The list of priority industrial parks for investment, new establishment and expansion through the periods up to 2000, 2010, 2015 and orientation to 2020 was approved in Decisions No. 519/TTg dated August 6, 1996, No. 713/TTg dated August 30, 1997, No. 194/1998/QD-TTg dated August 6, 1996, No. October 1, 1998 and No. 1107/QD-TTg dated August 21, 2006 of the Prime Minister with a total of 171 newly established industrial parks and 27 expanded industrial parks. Up to now, across the country there are currently 461 industrial parks in the master plan for developing industrial parks in Vietnam to 2015 and orientation to 2020 approved by the Prime Minister with a total natural land area of ​​about 142.1 thousand hectares. Of which, about 82.8 thousand hectares of industrial parks have been established/granted investment certificates and 59.4 thousand hectares of industrial parks have not been established.

By the end of September 2014, the country currently has 295 industrial parks established out of a total of 461 planned industrial parks with a total natural land area of ​​82.8 thousand hectares, the area of ​​industrial land that can be rented reaches 55.7 thousand hectares (accounting for about 67% of the total natural land area). Industrial parks were established in 60 provinces and cities, mainly concentrated in key economic regions to promote the advantages of geographical location and economic development potential of each region. In addition, to facilitate local industrial development, a number of industrial parks were established in areas with difficult socio-economic conditions such as the Northern midland and mountainous region and the Central Highlands... The Southeast is the region with the largest number of established industrial parks with 100 industrial parks, accounting for 33.9% of the country's industrial parks; TieuThose are the Red River Delta with 76 Industrial Parks and the Southwest with 51 Industrial Parks. Typical examples of building and developing industrial parks are the provinces and cities of Dong Nai, Binh Duong, Ba Ria - Vung Tau, Ho Chi Minh City, Long An and Bac Ninh (Table 1).

Table1: Number and area of ​​industrial parks distributed by region (9/2014)

Area	Number of Industrial Parks	Percentage compared to the whole country	Area (ha)	Percentage compared to the whole country
Northern TDMN	24	8,1	5,304	6,4
Red River Delta	76	25.8	17,824	21.5
Central	37	12.5	10,277	12,4
Central Highlands	7	2,4	1,073	1,3
Southeast	100	33.9	35,582	43.0
Southwest	51	17,3	12,780	15,4
Total	295	100.0	82,841	100.0

Source: Department of Management of Economic Zones, Ministry of Planning and Investment

Summarizing the results of reviewing the industrial parks included in the approved industrial park development planning nationwide until 2020, shows that there are 58 industrial parks included in the planning but only a part of the area has been established; 9 Industrial Parks have revoked their investment certificates to consider transferring to other more capable investors and 157 Industrial Parks are in the planning but the entire area has not been established, and will continue to be established in the period until 2020 when all conditions are met.

The Red River Delta region has the largest number of industrial parks and remaining unestablished areas (accounting for 36.6% in quantity and 36.1% in area of the country), followed by the Southeast region (accounting for 14.7% in quantity and 20.5% in area of the country) and the Southwest region (accounting for 20.5% in quantity and 18.6% in area of the country) (Table 2).

Table 2: Industrial parks included in the planning have a part of the area established and Industrial parks included in the planning have the entire area not yet established (*) (9/2014)

Area	Total revenue by 2020 (ha)	Number of industrial parks with part of the area established	Number of all industrial parks not yet established	Established area (ha)	Remaining unestablished area (ha)	Percentage compared to     the whole country
						About quantity	About DT
Northern TDMN	6,447	8	15	1,502	4,946	10.3	8,3
Red River Delta	26,507	22	60	5.109	21,398	36.6	36,1
Central Coast	11.133	10	24	2,321	8,812	15,2	14.8
Central Highlands	1.145	2	4	138	1,007	2,7	1.7
Southeast	13,526	9	24	1,366	12.160	14.7	20.5
Southwest	12.161	7	39	1,133	11.028	20.5	18.6
Total	70,920	58	166	11,569	59,351	100	100

Source: Department of Management of Economic Zones, Ministry of Planning and Investment

Note: (*) does not include industrial parks in the planning that have their entire area established.

Most of the established and expanded industrial parks are in accordance with the master plan for developing industrial parks approved by the Prime Minister. A system of industrial parks has been formed with a total area of ​​about 82.8 thousand hectares, attracting investment in infrastructure development and effective production and business, actively contributing to the process of socio-economic development, economic restructuring, creating jobs, improving income for workers, increasing state budget revenue and developing exports...

Status of investment in construction and development of industrial parks

About investment in infrastructure construction

295 industrial parks have attracted investors to invest in infrastructure development in different investment forms, including: 41 industrial parks invested by foreign-invested enterprises (FDI enterprises); 212 Industrial Parks are invested by domestic enterprises established and operating under the Enterprise Law and 42 Industrial Parks are invested by infrastructure development companies operating under the model of revenue-generating public service units (public service units).

The total registered capital for infrastructure of 295 industrial parks is equivalent to 12.8 billion USD, of which industrial parks invested by FDI enterprises have a total registered investment capital of 3.58 billion USD, implemented capital reaching 55.4% of registered capital and industrial parks invested by domestic enterprises have registered investment capital of 9.22 billion USD, realized capital reached 41.5% of registered capital.

About attracting investment

Of the 295 established industrial parks, 208 are in operation and 87 are undergoing compensation, site clearance and infrastructure construction. By the end of September 2014, industrial parks had attracted 5,325 FDI ​​projects with a total registered investment capital of 79.4 billion USD and 5,262 domestic investment projects with a total registered investment capital of 25.6 billion USD. Investment projects in industrial parks have created jobs for over 2.25 million direct workers. The occupancy rate of operational industrial parks reached 65%. Provinces and cities with many industrial parks in operation and achieving high occupancy rates include: Dong Nai, Binh Duong and Ho Chi Minh City (Table 3).

Table 3:Situation of investment and labor attraction in industrial zones (9/2014)

Area	Foreign investment (million USD)			Domestic investment (billion VND)			Labor (1,000 people)
	Project	Register	Execute	Project	Register	Execute
Northern TDMN	183	6,324	2,526	332	41,312	23,126	94,1
Red River Delta	1,337	20,642	11,967	1,101	113.484	65,429	578.9
Central Coast	204	3,890	1,345	986	63,200	25,454	170.4
Central Highlands	25	156	38	149	9,099	3,202	7,1
Southeast	3.173	44,371	26,518	1,726	190,583	112.587	1,164.0
Southwest	403	3,984	2,226	968	94,350	25,325	235.8
Total	5,325	79.365	44,620	5,262	512.028	255.124	2,250.3

Source: Department of Management of Economic Zones, Ministry of Planning and Investment

The average investment capital ratio of domestic and foreign investment projects/hectare of leased industrial land reached 4.14 million USD/hectare. The total average number of employees/hectare of leased industrial land reached 89 people/hectare.

Every year, foreign direct investment capital in industrial parks and export processing zones accounts for 40-45% of the total additional registered foreign direct investment capital of the whole country. In the industrial sector alone, industrial parks and export processing zones attract about 80% of total foreign direct investment.

It can be affirmed that industrial parks are an effective tool to attract investment projects, especially FDI projects, contributing to the goal of economic restructuring towards industrialization locally and across the country. Many large-scale investment projects with advanced and modern technology such as: Samsung, Nokia, Canon, Panasonic,... have invested in the Industrial Park, contributing to the formation of a number of supporting industries in the fields of electronics and telecommunications.

About building a wastewater treatment system

By the end of September 2014, 165/295 industrial parks had a complete and operational centralized wastewater treatment system, accounting for nearly 56% of the total number of established industrial parks and 80% of the total number of operating industrial parks. 85% of secondary enterprises connect to the industrial park's general wastewater treatment system. The total wastewater treatment capacity of currently operating plants reaches 595 thousand m3/day and night. In addition, there are currently 33 industrial parks under construction of centralized wastewater treatment works with a total design capacity of about 98.4 thousand m3/day and night. Wastewater treatment plants that have come into operation are concentrated largely in the Southeast and the Red River Delta, accounting for 67.3% of the total number of industrial parks with wastewater treatment plants in operation and equal to 76.6% of the total capacity of existing wastewater treatment plants.

Housing for workers

Decree 164/2013/ND-CP dated November 12, 2013 amending Decree No. 29/2008/ND-CP regulating Industrial Parks, Export Processing Zones, and Economic Zones has added new regulations to reserve a part of the cleared industrial park area to build housing for workers. This is truly a more favorable condition for developing housing for workers in industrial parks in localities, and also creates conditions to solve the problem of land fund and housing planning associated with industrial park planning.

Contribution results of industrial parks to economic development

The increasingly positive role and contribution of industrial park enterprises in the country's economic development process is shown in the following points:

First,the proportion of industrial production value of industrial park enterprises in the total industrial production value of the country has increased continuously from about 14% in 2000 to 28% in 2005, 32% in 2010 and 39% in 2013.

Second, the proportion of export value of industrial park enterprises in the country's total export turnover has increased significantly from about 15% in 2000 to about 20% in 2005, 25% in 2010 and 34% in 2013.

Third, industrial park enterprises initially made positive contributions to the state budget. In the period 2001-2005, industrial park enterprises paid about 2 billion USD to the budget, in the period 2006-2010 it was 5.9 billion USD and in the three years 2011-2013 it was 5.2 billion USD.

Fourth, if calculating an average of 1 hectare of industrial land available for lease in 2013, industrial parks have created industrial production value of 3.8 million USD/ha, export value of 2.12 million USD/ha, contributing about 1.5 billion VND/ha to the budget. On average, 1 hectare of leased industrial land has created jobs for 86 direct workers.

Thus, if we compare the investment targets, production value, export, and job creation on 1 hectare of land in industrial zones compared to 1 hectare of agricultural land, we can clearly see the efficiency and outstanding contribution of industrial zones.

Fifth, the development of industrial parks has created concentrated industrial areas, positively affecting the development of raw material areas, promoting the development of various types of industrial services, enhancing the value of agricultural products, and improving the overall efficiency of manufacturing industries.

Some limitations in planning work

The planning of industrial park construction has revealed a number of limitations: some industrial parks were established with the actual area of ​​the industrial park after measurement being larger than the approved planning area; The proposal to supplement planning and establish industrial parks in some localities is not really suitable for local conditions and development potential; The implementation of approved industrial park planning in some localities is still limited, there is no plan to implement industrial park planning with specific and reasonable goals and phases for establishing and expanding industrial parks based on the local ability to attract actual investment.

In addition, industrial parks are planned in areas with wet rice cultivation land with stable productivity and large area scale, densely populated areas, so they face many difficulties in compensation, site clearance, re-cultivation and settlement; lack of trained labor while people whose land is confiscated have no jobs; lack of housing for workers. In addition, some previously planned industrial parks are located in planned inner-city and inner-city expansion areas of cities and towns or in unfavorable locations in terms of technical infrastructure connection conditions.

Solution orientation for implementing industrial park development planning

To continue promoting the achievements and overcome difficulties and obstacles to the development of industrial parks in the coming time, it is necessary to implement some of the following solutions:

First, improve the quality of construction and implementation of industrial park planning

Develop and implement industrial park development planning in association with implementation of socio-economic development planning, land use planning, industrial development planning, urban planning, residential area planning, housing planning and other industry planning. Develop industrial parks with a quantity and scale appropriate to the actual development conditions of the locality, ensure effective use of industrial park land, do not develop industrial parks on rice land with stable productivity.

Regularly review and adjust industrial park planning to suit the actual situation; ensure the industrial park area is consistent with planning and land use plans for each period; Do not leave land vacant, causing waste; Do not develop industrial parks without ensuring the industrial park occupancy rate according to regulations.

Minimize the increase in area and new additions to industrial park planning; Focus on developing established industrial parks, only establishing additional industrial parks when meeting prescribed conditions.

According to the above orientation, the Ministry of Planning and Investment recently reported to the Prime Minister to review planning adjustments, in which, reducing the area or removing from the planning slow implementation and ineffective industrial zones...

Second, build synchronous industrial park infrastructure and improve the quality of attracting investment into industrial parks

Improve the quality of industrial park infrastructure construction towards synchronously building a technical infrastructure system with amenities and public utilities serving the industrial park; connect infrastructure inside the fence with outside the industrial park fence. Diversify capital sources to invest in building housing and convenient facilities to serve the lives of industrial park workers.

Focus on attracting priority occupations and fields with advanced, modern, environmentally friendly technology, occupations identified as the spearhead of development and advantages of Vietnam and in accordance with the country's economic restructuring program and investment structure. Strengthening industry linkages in industrial park development; Forming industry-linked industrial parks to increase the competitive advantage of industrial parks and improve operational efficiency of industrial parks, gradually forming supporting industries, contributing to local economic restructuring.

Develop focused and key investment promotion strategies and plans; which determines the investment structure and driving force projects in accordance with the local potential and advantages.

Third, strictly control environmental issues

Disseminate and propagate to raise awareness of environmental protection; Strengthen supervision, inspection, and inspection of compliance with environmental laws in industrial parks associated with the implementation of sanctions to handle violations of environmental protection in a specific, resolute and decisive manner (including sanctioning, stopping operations or revoking investment certificates of investment projects);

Improve environmental management and technical capacity for agencies related to industrial parks and economic zones to create conditions for management agencies to have adequate resources to carry out tasks of industrial park environmental protection.

Fourth, take care of the material and spiritual life of workers

Improve the system of policies and laws to improve working conditions and support the material and spiritual lives of workers in industrial parks in accordance with the actual conditions of the country.

Focus on vocational training for young people in rural areas, especially rural areas where land is recovered for industrial parks; develop a human resource development strategy for the industrial park; Build a workforce with industrial style, qualifications, skills, and increasingly improved labor discipline.

Building harmonious relationships between employees and employers, strengthening the role of trade unions in enterprises, encouraging enterprises to develop business associated with enhancing responsibility for the rights of employees and the community.

Research and develop highly encouraging policies to mobilize investment resources to build housing for industrial park workers to rent; Focus on mobilizing available resources from the population in association with controlling construction standards and housing business for rented workers.

Fifth, research and adjust the industrial park development model accordingly

Practical operations of industrial parks in recent times have raised new issues that need to be researched and adjusted to suit the development practices of Vietnam and world trends. It is a matter of combining industrial development with housing, urban development, and public amenities and facilities to serve workers; develop industrial parks with high industry connectivity and high specialization; Supporting industrial park; Eco-industrial park; High-tech industrial park.

Sixth, perfect mechanisms and policies for industrial park development

Continue to research, supplement and improve current policy mechanisms related to industrial parks on corporate income tax incentives, tax incentives on importing goods to create fixed assets of investment projects, increase access to investment credit capital, reduce land access costs, increase decentralization and assign tasks directly from the Central to localities;

Research and develop mechanisms and policies to suit each type of new industrial park development model;

Consolidate the state management apparatus at the central and local levels to ensure sufficient authority and resources to manage industrial zones in the direction of one-stop shop, one focal point and commensurate with the increasingly important role and position of industrial zones in the process of industrialization and modernization of the country.