Da Nang Does Not Attract Investment at Any Cost

10:17:39 AM | 12/23/2019

“To meet development goals in the new context, Da Nang City will focus on promoting and attracting selective projects to achieve the highest outcome rather than have the investment fund at any cost,” said Mr. Tran Phuoc Son, Director of the Da Nang Department of Planning and Investment, when talking about the city’s investment approach in the coming time.

In the first six months of 2019, Da Nang City attracted over VND2,300 billion (US$100 million) of domestic capital and more than US$554.61 million of foreign investment. Of the sum, US$374.2 million came from 72 fresh projects (compared with 61 projects with US$25.66 million in the same period in 2018), US$116.28 million came from six existing projects (compared with nine projects with US$1.18 million in the same period of 2018), and US$64.13 million came from 79 equity purchase deals (89 deals with US$21.7 million from a year ago).

In particular, the UAC aerospace component manufacturing project is expected to start operation in the first quarter of 2020. Mikazuki Spa & Hotel Resort (Xuan Thieu Resort Expansion Project) is scheduled to bring the entertainment facility and water park into operation in June 2020 and inaugurate the high-rise hotel in the first quarter of 2021. The investor also planned to invest US$50 million more to expand the Mikazuki Spa & Hotel Resort in the second phase and the Department of Planning and Investment already advised the municipal government to grant a permit for the investment hike.

“Right after the New Year Business Meeting 2019, the Department of Planning and Investment has regularly coordinated with relevant units to monitor, urge and report on investment situations to the City People’s Committee (every two weeks), including hardships in investment procedures, and propose solutions to accelerate the process of business support to quickly complete investment procedures and start investment and operation. At the same time, it has worked with relevant agencies to advise and deal with difficulties and obstacles, support enterprises and investors to timely carry out procedures and start major and key projects such as UAC and Mikazuki Spa & Hotel Resort,” said Son when he explained the rationale to the above positive results.

According to Son, in addition to supporting new investors, the city puts a premium on assisting and supporting existing investors and companies to tackle hardships and expand operations. For example, the department worked with business associations, FPT Corporation - Da Nang Branch, CAS Company, Huong Que Company, Da Nang Rubber Company, Vietnam Beverage Brewer and Petroleum Company - Region 5.

Nonetheless, the city's economic growth rate is still lower than the plan, estimated at only 6.21% (1% lower than the first half of 2018 (7.24%)).

Explaining this issue, Director Son attributed it to the decline of major branches in the industrial structure (accounting for nearly 57%). For example, the garment and textile sector slumped 37%, dairy processing tumbled 20.3%, seafood processing dived 12% and electronics decreased by 11%. The days that tourists spent in the city fell from the same period of 2018 and the upmarket market tended to shrink, resulting in a weaker revenue of accommodation, food and travel business.

Specially, an equally important cause, according to Mr. Son, is because the city has clung to the sustainable development approach in accordance with Resolution 43-NQ/TW on Da Nang City Construction and Development, resolutions of the City Party Committee, the City People’s Council and the City People’s Committee on changing the growth model, sustainable development and environmental development. The city has also adjusted the master plan to 2030, with a vision to 2045, designed the economic development strategy to 2030; reviewed and revised plans of riparian and coastal areas; and reviewed and addressed planning shortcomings, suspended environment-polluting manufacturing projects.

“Although this review has a certain immediate impact on economic growth and corporate benefits, in the long run, the city always aims for sustainable development, good service to the community, harmonizing interests of the community, businesses and the city’s affordability”, he stressed.

Besides, due to limited land fund, Da Nang City has focused on infrastructure investment for hi-tech parks and information technology parks, which require huge investment costs. Therefore, the city attaches much importance to promoting and attracting selective projects that use cutting-edge technology, source technology and are involved in key fields like tourism, logistics and information technology to boost investment performance, rather than draw investment fund at any cost.

As licensed projects are being deployed, they have not made any contribution to current growth but they will make it when they are completed. Da Nang City planned to invest in more industrial zones and expand high-tech parks and software parks, investment procedures are still slow. Moreover, in spite of radically directing the implementation of the Conclusion 2852 of the Government Inspectorate, the settlement of obstacles and violations is prolonged as a result of legal procedures, especially land issue. Violation investigations are ongoing and have a certain impact on the attitude of some public servants in the course of performing their duties. For that reason, records and procedures relating to land allocation, planning, construction and fulfillment of financial obligations are still unsettled to reduce contributions to economic growth powered by the investment fund organizations, individuals and investors.

Furthermore, the city has focused on directing and deploying investment in key driving projects which are expected to spur growth as they are entangled with a lot of investment procedures, especially site clearance.

In the last months of 2019, Da Nang City will further review, make timely adjustments and deal with planning inadequacies, consistently adhere to the sustainable development approach based on the Resolution 43 of the Politburo to become a modern, civilized city for the community, and ensure the harmony of business interests, not accepting overheating GRDP growth. The city will visit and work with industrial and service businesses and investors in order to support and facilitate them to do business in the locality, deal with obstacles stated in the Conclusion 2852/KL-TTCP of the Government Inspectorate to unlock investment resources of individuals, businesses and investors.

Nguyen Phuoc - DDDN