New competitive advantage of Southeast Economic Zone

Create competitive advantage

Specifically, according to Resolution No. 22/2020 dated December 13, 2020, supplementing Resolution No. 19/2019, the land rental price atIndustrial ParkVSIP reduced from 525,000 VND/m²down to 285,000 VND/m²; Nam Cam Industrial Park, Area A, reduced from 387,000 VND/m²down to 307,000 VND/m², area B from 396,000 VND/m²down to 330,000 VND/m², area C from 402,000 VND/m²down to 348,000 VND/m²; Area D, from 338,000 VND/m²down to 280,000 VND/m²;WHA Industrial Zone 1in Nghi Loc, from 387,000 VND/m²down to 275,000 VND/m².

Similarly, the land rental price at Tho Loc Industrial Park, the current price in area A is 318,000 VND/m², area B is from 313,000 VND/m², area C is 334,000 VND/m²; now reduced to the general price of 275,000 VND/m²; Hoang Mai Industrial Park I from current is 518,000 VND/m²and Hoang Mai II Industrial Park is 221,000 VND/m², now adjusted to a common level of 275,000 VND/m²; Dong Hoi Industrial Park price, from 375,000 VND/m²down to 275,000 VND/m².

VSIP Industrial Park infrastructure in Hung Nguyen is invested synchronously. Photo: Nguyen Hai

Mr. Le Tien Tri - Head of Management BoardSoutheast Economic Zoneonce shared: In the context of land rental prices in general and price levels in particularindustrial real estateWhile the whole country tends to increase, Nghe An's approval of a land price list in a downward direction compared to before is a great effort of the province, aiming to create an advantage in attracting investment.

In fact, to issue a separate land price framework, the Southeast Economic Zone Management Board, the agency in charge of the proposal, had to endure a lot of pressure because it had to conduct a thorough survey, compare with localities with similar conditions, and coordinate with relevant departments and branches to advise and persuade before the land price framework was approved by the Provincial People's Committee and Provincial People's Council.

After 1 year of implementation, through quick discussions, representatives of infrastructure investors all acknowledged and highly appreciated this new policy of the province.

The representative of VSIP Office further explained: The new land rental price frame in Nghe An's Southeast Economic Zone, in addition to bringing the land rental price to the same level and cheaper than the two neighboring provinces of Thanh Hoa and Ha Tinh (previously, the land rental price in Nghe An industrial park was higher than the two above provinces), Nghe An also abolished the land rental price list determined by each lot, depending on the location advantage in an industrial park as before to bring it to a common price so that investors, from infrastructure investment to secondary enterprises, can take note, approach, and learn to calculate when investing.

Representatives of Nghe An Investment, Trade and Tourism Promotion Center (NAPC) introduced the planning, infrastructure and land rental prices at Hoang Mai Industrial Park at an investment promotion conference with Zulu Group (India). Photo: Nguyen Hai

This was shared by a leader of the Nghe An Investment, Trade and Tourism Promotion Center (NAPC): Every time an investor comes to promote and learn about investment, although the officials and investors in industrial park infrastructure business send documents and provide advice, because the land price list according to the old regulations is quite complicated, new investors coming to survey often do not have much time to learn. Now that the infrastructure of industrial parks is invested synchronously, each industrial park has a common price that is reasonable and easy to calculate to make an investment plan.

More time is needed to prove effectiveness.

Although the new land price change is cheaper than before, as Nghe An authorities admit, cheap land price is only one of the component indicators.

Toimprove investment environmentand attracting investment requires many other factors. On the side of businesses and investors, although they acknowledge that the new price brings direct benefits to infrastructure investment businesses as well as secondary businesses, they still expect a lot of support and companionship from the province.

Along with VSIP in Hung Nguyen, the infrastructure of WHA.N01 Industrial Park in Nghi Loc is also invested synchronously and the land rental price is quite competitive. Photo: Nguyen Hai

According to calculations, with the current price, land rental price at VSIP Industrial Park has decreased by 240,000 VND/m²; rental price in Nghi Loc decreased by 112,000 VND/m²; Land rental price at Hoang Mai 1 Industrial Park decreased by 243,000 VND/m²is a record decrease, with the lightest decrease being 30% and the highest being nearly 50%, so it couldn't be better for investors.

Also according to the regulations, the above price frame is applied until December 31, 2024, so any investors who come to Nghe An to rent land at this time will be very beneficial. Sharing this, the representative of Hoang Thinh Dat Company in Hoang Mai Town said: The advantage of land rental prices in Nghe An province is decreasing, which is the basis for the company to offer a softer rental price compared to other industrial parks, creating conditions to attract secondary investors such as Ju Teng Group (Taiwan) to rent land at Hoang Mai Industrial Park 1.

The representative of the Department of Natural Resources and Environment, Southeast Economic Zone also said: After 1 year of implementing Resolution No. 22 on amending the new land price framework in the Economic Zone, the Board and the Provincial People's Committee have not yet evaluated the implementation results and investors and businesses have not had any major feedback. According to Resolution No. 22, the new price list will be applied from January 1, 2020, but from mid-2021, according to Decision No. 27/2021 of the Prime Minister, businesses affected by the Covid-19 pandemic will have their land rent reduced by 30%, so it cannot be evaluated yet.

Investment in infrastructure expansion phase 2 at VSIP Hung Nguyen Industrial Park. Photo: Nguyen Hai

In addition, according to Decree No. 35/2017/ND-CP of the Government, enterprises leasing land for investment in industrial parks in the Southeast Economic Zone are all in the 11-year period of enjoying investment incentives and are exempted from land rent. Assessments of the effectiveness and impact of the new land price schedule will be clearer when secondary enterprises enter the 12th year onwards, the land rent is part of the investment and business costs.

On the other hand, according to Decree No. 35/2017/ND-CP for land areas allocated and leased without auction, infrastructure investors are allowed to voluntarily advance funds for site clearance and industrial park infrastructure construction, which will later be calculated and deducted by the Economic Zone Management Board through land rent. Currently, basically, industrial park infrastructure investors in Nghe An have advanced funds for site clearance and the time has not yet come to offset the budget obligation, so there have not been any issues that investors have not commented on.

In fact, realizing this advantage, some industrial park infrastructure investors in Nghe An are actively taking advantage of the new land price mechanism. Specifically, VSIP Company Limited is promoting investment in Tho Loc Industrial Park (Dien Chau), Hoang Thinh Dat Company, together with completing the infrastructure of Hoang Mai 1 Industrial Park, is urgently implementing investment procedures for Hoang Mai 2 Industrial Park in Quynh Thang commune; WHA Industrial Zone 1, after completing the infrastructure of phase 1 with 148 hectares in Nghi Thuan commune, is starting to implement investment in phase 2 in Nghi Hung and Nghi Dong communes.

Traffic infrastructure connecting National Highway 48E to Hoang Mai 2 Industrial Park, Tan Thang Commune (Quynh Luu). Photo by Nguyen Hai

Hopefully, along with incentives on land rental prices, other investment support policies of the province that have just been issued will also be implemented synchronously to attract more secondary investors to rent land for production and business, thereby creating a positive effect on attracting investment, promoting and soon filling up industrial parks, thereby improving the production and business efficiency of the province.