Bac Van Phong: Allow investors to propose ideas and draw plans

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Mr. Hoang Dinh Phi.

With the recent moves of the Draft Law for Special Economic Zones such as Van Don, Bac Van Phong and Phu Quoc, are there any changes in the proposal for the establishment of Bac Van Phong Special Economic Zone, Sir?

The project for Bac Van Phong has been adjusted and updated continuously over time in line with the Draft Law, and the most important thing is the organizational model. The project has now been adjusted according to the model of the People's Council, People's Committee, the President of the special zone and the functional agencies. Businesses attracting investment still focus on high-tech services connected with the sea.

Regarding the financial mechanism, Bac Van Phong is still a district-level model. To develop into a special zone, the district needs budget subsidies. Under the provisions of the draft law, the special zone can retain about 10% of additional revenues, which will not guarantee the quality of the infrastructure. As of 2016, the total budget revenues in this locality was just more than VND 100 billion.

Thus, in order to develop the special economic zone, Bac Van Phong needs more funding from the participation of strategic investors and land fund revenues besides the revenues from the State budget. However, in order to attract strategic investors or raise money from land funds, Bac Van Phong must have sufficient funds to invest in infrastructure.

Therefore, in the proposal, we proposed a mechanism to retain 100% of revenues from import and export tax for 10 years; retain 100% of the total revenues in the special zone’s area for 10 years and 50% of the revenues from the central budget and local budget within 5 years from the date of establishment for financial security. However, this proposal is still in the process of review.

Thus, the problem set for Bac Van Phong is to find strategic investors. How is this happening in Bac Van Phong, Sir?

We are still in the process of planning because Van Don and Phu Quoc are moving from the model of the economic zone to the special economic zone, but Bac Van Phong is completely different. At present, Van Phong Economic Zone Management Board is managing the southern area and the new northern area has been selected to form a special zone with a different management model. Therefore, when we have a full plan, there will be investors in Bac Van Phong.

This is just one of the ways that Bac Van Phong approaches big investors. This approach allows investors to propose ideas and draw plans. Based on this proposal, the province will review and compare with the general development plan to decide how to allow the project to be implemented. The project will be integrated into the master plan of the special zone.

There are a lot of international consultants in Khanh Hoa but we are still in the process of selection, just in the approval of the outline, mission, budget and we are entering the scoring period. This order has been clearly stated in the document 8489/2017 that Khanh Hoa submitted to the Government for permission to hire foreign consultants with funding from the State budget and socialization.

Please tell us what the interest of strategic investors with Northern Van Phong is?

Previously, many leading corporations and companies in the world came to Khanh Hoa to seek investment. These are multinational corporations in the field of financial services, seaports and industry. More than 30 big corporations in the world came to Khanh Hoa. They were heads of corporations, including political officials but they all had to wait for the Law from 2012 to now.

Now, we restart, they still have to see if the Vietnamese law is right for them or not to make a decision. In addition, large corporations often do not find out themselves but based on international consulting firms to invest.

Is Khanh Hoa targeting any strategic investor, Sir?

Although many investors came to seek opportunities, the province has not yet decided on strategic investors because only with the draft law, the determination of strategic investors is not clear.

NA seek breakthrough mechanisms for special administrative-economic units Contentious contents in the draft law on the special administrative economic units of Van Don Bac Van ...

Currently, the Draft Law provides that strategic investors are investors with projects in the priority development of the special area, capital of at least VND 6,000 billion; or in the list of the 500 largest enterprises in the world according to Forbes magazine, with a project of VND 6,000 billion and disbursement within 3 years. Although there are many different views, but according to me, such regulations are to ensure financial capacity and deployment, not just for enjoying incentives or to keeping land.

Thank you Sir!