Addressing slow-moving projects: Significantly improving the investment environment.

(Baonghean) - “Attracting investment is an extremely important task for the province's economic development, but implementation after the issuance of investment certificates is still slow. Causes, responsibilities, and solutions” - this was the main content of the first questioning session at the 13th meeting of the 16th Provincial People's Council. There were 6 questions directed at the Director of the Department of Planning and Investment, and most were clearly explained.

Vinh Airport is currently undergoing upgrades. Photo: Hoang Vinh

The lengthy administrative procedures are one of the reasons for project delays. In particular, land compensation and clearance are the main cause of the current project delays. Very few projects achieve "clean land" status. According to the results of inspections of delayed and unimplemented projects in the province by inter-agency inspection teams from 2011 to the present, over 90% of projects are delayed due to compensation, land clearance, support, and resettlement issues. Notably, some projects have experienced delays of years due to compensation and land clearance procedures (BMC Vinh Plaza Shopping Center, renovation of Areas A and B of Quang Trung Apartment Complex, Hieu Market Complex (Thai Hoa), Olecco Dien Ky Urban Area, Cua Tien - Vinh Tan New Urban Area Project, Residential Area in Nghi Phu Commune, Nam Do Luong Town New Urban Area, etc.).

First and foremost, land clearance procedures are the most difficult stage in project implementation due to their large scale and the need for simultaneous and decisive action. In some cases, improper handling can easily lead to dissatisfaction among the authorities and residents in the project area, resulting in the project being "stalled," delayed, or behind schedule; mainly because the investor and landowners cannot agree on compensation prices (residents demand compensation based on "market value" at the time of land handover. Many investors have to negotiate multiple times with landowners to agree on a price, but the compensation costs are only deducted according to the state-determined compensation price, etc.).

The Ambassador of the Russian Federation to Vietnam visits Hanoi Brewery (Nam Cam Industrial Park). Photo: Sy Minh

The second reason, according to the Director of the Department of Planning and Investment, is that investment projects are subject to regulation by numerous legal documents such as: the Enterprise Law, the Investment Law, the Land Law, the Planning Law, the Construction Law, the Environmental Protection Law, and the Fire Prevention and Fighting Law, not to mention specialized laws and related sub-laws. Being subject to regulation by so many legal documents also makes investment procedures complicated, cumbersome, and time-consuming, slowing down project implementation.

The third reason is that assessing the feasibility of investment projects and screening capable investors remains challenging. In practice, determining the capacity of investors is difficult, even when the documentation and procedures meet requirements and comply with legal regulations. This is because the verification of financial capacity and project implementation conditions is primarily based on the documents provided by the investor, lacking on-site verification and validation. Therefore, the quality of the verification sometimes fails to accurately reflect the investor's actual capacity. In many cases, especially for foreign investment projects, coordination with the Provincial Police is necessary to verify the legal status and capacity of the investor as a basis for advising the Provincial People's Committee on consideration and decision-making. Furthermore, since most investors in the area come from other provinces and abroad, gathering information and verifying their financial capacity before advising the Provincial People's Committee to issue investment certificates remains challenging.

Construction of the MDF wood panel factory (Nghia Dan). Photo: SM

The fourth reason stems from the lack of available land to attract investment projects and facilitate resettlement. Director of the Department of Planning and Investment, Nguyen Van Do, also outlined the responsibilities of each sector and level, as well as solutions to address these issues. The Department of Planning and Investment is tasked with leading the process of advising on and resolving problems arising from two of the ten aforementioned procedural groups: investment policy approval and investment certificate issuance. However, the delay in project implementation after investment certificate issuance is partly the responsibility of the Department of Planning and Investment in verifying the investor's capacity and project implementation conditions. Many other sectors, such as the Department of Construction, the Department of Natural Resources and Environment, the districts, and the investors themselves, also bear responsibilities as stipulated by regulations.

Regarding solutions, the Director of the Department of Planning and Investment proposed several solutions, including the general solution of implementing the contents of the Project "Focusing on attracting effective investment into Nghe An province until 2020" which has been approved by the Standing Committee of the Provincial Party Committee.

Following the explanation by the Director of the Department of Planning and Investment, delegate Hoang Xuan Truong (Yen Thanh district) asked: According to feedback from investors and voters in the province, administrative procedures are still cumbersome during the implementation of projects, coordination between agencies is rigid, and the spirit of the province's directives is not truly understood; what is the solution to this situation? Director of the Department of Planning and Investment Nguyen Van Do stated: The province and agencies are not allowed to create additional procedures, and there may be limitations in some areas during implementation. The 10 procedural steps are as stipulated by law. The Provincial People's Committee has directed departments and agencies to assign competent personnel to handle matters at the focal point. On another aspect, the integrated one-stop service is not yet effective, and the Provincial People's Committee is addressing this issue. While there are surveillance cameras at the one-stop service centers, the assignment of tasks from leaders to the one-stop service department is not sufficiently thorough. The department's meetings are not held regularly, and the information technology system does not meet the requirements.

Responding to a question from delegate Pham Van Tan (Nghi Loc district) regarding the need to clarify that out of 76 projects inspected, only 5% were implemented, and 20% were being considered for revocation, what about the remaining projects? The Director of the Department of Planning and Investment stated: These 76 projects were all projects that were repeatedly reviewed and found to be behind schedule, hence the inspection; it was not a random occurrence. Most of these projects were invested in as part of a trend. Besides these projects, the remaining projects are currently facing difficulties…

Construction of an overpass on National Highway 1A and the North-South railway line at Quan Banh (Vinh City). Photo: SM

Also, a question from delegate Pham Van Tan was: “Which sector has the most violations during project inspections? Is the slow pace of investment attraction after licensing the reason for the low proportion of industry and construction in the past term?” - The Director of the Department of Planning and Investment replied that the sector with the most violations during project inspections is the violation of planning regulations. Regarding the slow pace of investment attraction after licensing, urban development projects currently account for a high proportion, over 70%, and the province is adjusting the structure; the sharp decline in industry and construction in recent years is due to reduced public investment and the economic recession, not because of slow project implementation; key industrial products of the term, such as cement and beer, also did not meet the plan.

However, this answer did not satisfy the questioning representative, so the representative continued to ask: What is the capacity and responsibility of organizations, individuals, and state agencies in assessing investors regarding the difficulties in land clearance for the project? The Director of the Department of Planning and Investment replied: In just 2-3 days, it is impossible to assess the investor's capacity while considering unforeseen difficulties. Furthermore, the responsibility for land clearance rests with a different agency, not the investment licensing agency. Regarding the question: The Nguyen Kim supermarket project, which started construction nearly 3 months ago, still does not meet the conditions for construction? The Director of the Department of Planning and Investment stated: The land allocation procedures are being processed because compensation is being paid to the previous investor.

Representative Dinh Thi An Phong (Nghi Loc) posed two questions to the Director of the Department of Planning and Investment: What are the implementation solutions for the Vinh University Phase 2 project and the Vinh - Cua Lo Boulevard project?; What solutions can improve the province's competitiveness? The Director of the Department of Planning and Investment replied: Currently, the province is reviewing the two aforementioned projects. Regarding the Vinh - Cua Lo Boulevard project, the province is requesting central government funding support because the provincial budget cannot meet the requirements. Regarding the provincial competitiveness index, according to the Director of the Department of Planning and Investment, a low index is usually unfavorable for attracting investment, but this year's investment attraction results show that this index is not entirely accurate. The Department of Planning and Investment has just advised the province to issue a plan on an action program to improve the provincial competitiveness index. Consensus between the voices of businesses and the people with the government at all levels is crucial for a good investment environment.

Regarding the question from delegate Pham Van Tan about the content mentioned in the Nghe An Newspaper (in the "Exchange" section on December 10th, page 1) that fundamental solutions are needed to overcome the "chronic problems" in many situations, including slow investment attraction after licensing, the Director of the Department of Planning and Investment acknowledged that the newspaper's statement was accurate.

Representative Thai Thi An Chung (Do Luong) questioned: According to the Provincial People's Committee's report on the socio-economic situation, the number of projects attracted to economic zones and industrial parks is still too low, with only 11 projects. Recently, the Prime Minister's Decision 76/2014 expanded the Southeast Economic Zone; has the sector failed to promote and attract investment? In response, the Director of the Department of Planning and Investment stated: Currently, the province has 1 economic zone, 8 industrial parks, and 32 small industrial clusters, all of which are fully occupied. The Southeast Economic Zone is attracting the VSIP 6 project. This is a strong investor with significant potential, and its arrival will create a breakthrough for the province. They will bring their own investors to the area.

Representative Truong Van Hien (Yen Thanh district) suggested that the Department of Planning and Investment should advise the province to reduce investment procedures, as completing all 10 steps takes too long. Businesses could pay the Investment Promotion Center to handle the procedures for them. The Department of Planning and Investment should prioritize the classification of investment projects and procedures, giving priority to high-tech agricultural projects. The Director of the Department of Planning and Investment acknowledged that this has not yet been achieved, but stated that the Department will consider and implement the representative's suggestion in the future, as it is a good solution.

Thus, there were 6 questions raised to the Director of the Department of Planning and Investment, and all questions were answered by the Director during the first questioning session of the 13th meeting of the 16th Provincial People's Council. On behalf of the presiding officer, Vice Chairman of the Provincial People's Council Nguyen Xuan Son concluded that the questioning of the Department of Planning and Investment basically met the requirements of the delegates and the aspirations of the voters. Due to the slow implementation of many projects in the past, voters still have many concerns. After outlining solutions to attract investment effectively, the presiding officer requested the Provincial People's Committee and relevant departments to resolutely revoke projects that are stalled, not implemented, and negatively impacting the province's investment environment, strengthen guidance, and leverage the combined strength of the entire political system to significantly improve the investment environment, especially through effective and convincing administrative reforms.

Chau Lan