Lack of action holding back key projects

Foreign investors are in critical need of support to help develop long-delayed projects worth billions of US dollars.

Mitsui Oil Exploration is eager to remove long delays in resolving procedures in order to develop the $10-billion Block B of the O Mon gas venture.

In the framework of the meeting between Prime Minister Pham Minh Chinh and executives of several major Japanese economic corporations in Hiroshima last week, Mitsui Oil president and CEO Hirotaka Hamamoto asked the PM to help settle pending issues to accelerate the project.

The company has proposed a number of solutions to resolve pending issues to be able to officially develop the project as soon as June this year.

Block B is located in the Malay-Tho Chu basin in southwest Vietnam, and comprises the development of a gas field and pipeline. It was announced in early 2016 and the first production was expected in the second quarter of 2020. It is considered one of the most significant gas exploitation projects in the country.

PM Chinh hailed the corporation for pursuing the project on natural gas exploitation at Block B, expressing hope that the natural gas would soon serve Vietnam’s O Mon thermal power plants. He suggested that Mitsui continue cooperating with and investing in the Vietnamese market, especially in the development of green and clean energy that align with global trends and contribute to the nation’s goal of achieving net-zero emissions by 2050.

Another long-delayed project is Quang Tri Industrial Park in the central province of Quang Tri. At a meeting in mid-May, the provincial Party Committee’s Deputy Secretary Nguyen Dang Quang asked provincial departments, agencies, and localities to work closely to help investors complete legal procedures related to the project in order to accelerate implementation of $87 million complex. The project was licensed in March 2021 but has yet to be implemented due to barriers in land clearance and compensation for households.

The park is a joint venture involving Vietnam-Singapore Industrial Park, Amata City Bien Hoa, and Sumitomo Corporation. It is based in Hai Lang district and is set to cover 481.2 hectares.

The first stage of the project costs $21.74 million and was scheduled to be implemented before 2025. As of last month, around three-quarters of the land for the first stage has been cleared.

Block B and the Quang Tri park are just two of many registered foreign-invested projects with a lack of progress in recent years. According to the Ministry of Planning and Investment’s Foreign Investment Agency, Vietnam has attracted consolidated registered capital of $446 billion over the past 30 years, and disbursed $280 billion so far, meaning a raft of projects and huge amounts of capital still awaiting disbursement.

The total disbursed volume of foreign direct investment in 2022 reached a record of $22.4 billion, up 13.5 per cent over the previous year, which means that $5.32 billion is still on paper only. Foreign direct investment stood at $8.88 billion in the first four months of 2023, with disbursed capital of $5.85 billion.

Both the government and local authorities are making effort to boost the disbursement of foreign-invested projects in terms of traffic, industrial infrastructure, and improving the labour force. They have determined key tasks to attract more foreign-invested capital, including those willing to innovate, reform, improve the business environment, and being ready to provide support.

For example, the northern province of Thai Binh took only 10 months to complete land clearance for nearly 540 ha at Lien Ha Thai Industrial Zone, which is a province record. Thanks to this effort, the complex has attracted seven projects equalling capital of $731 million in the two years since its funding plan was approved, one of which is a $260 million manufacturing plant by Taiwanese laptop maker Compal Electronics.

Vietnam Investment Review