To solve difficulties of industrial clusters

Update: 22-08-2018 | 11:21:46

Decree No. 68/2017/ND-CP of the Government on management and development of industrial clusters (ICs) has been evaluated to create "leverage" for ICs in the country to grow, overcome difficulties to attract investment projects, execute infrastructure construction, site clearance...

Binh Duong is a good place to attract investments and develop ICs. The whole province has 12 CCs with total area of 794ha and occupancy rate of 67%. According to Decision No. 47/QD-2015 of Provincial People's Committee on Binh Duong province IC development plan up to 2020, with vision towards 2025, the province will have 13 ICs with total area of 908.74ha.

Footwear production line at a company in the province.

Binh Duong province is attracting investments in infrastructure - technique, calls for investment in ICs. There are 4 new ICs, such as An Lap (Dau Tieng), Tam Lap 2 (Phu Giao)... Until the end of 2018, Provincial People's Committee will focus on solving difficulties and problems of existing ICs; set up schemes to build ICs supporting SMEs; at the same time, set up regulations on IC management to create favorable conditions for SMEs.

Opening up many opportunities for IC development

Although achieved results were good and appreciated in terms of IC development in comparison with other localities in the country, surveys showed that Binh Duong still has some ICs, which are difficult to attract production establishments as well as investments in IC infrastructure. It is hard to attract investments in IC infrastructure construction, when businesses do not get preferential policies as investment in industrial parks (IPs). According to the Government’s regulations, an IC must cover an area of no more than 75 ha, while issues related to detailed planning, zoning, greenery, waste water treatment... must comply with the criteria of an IP. In addition, the initial investment in IC is large, the land area for rent is not much, and preferential regime is limited, so it is difficult to call for investments in ICs. Moreover, investment capital in ICs is nearly equal to that of IPs, so investors are not very interested.

Decree No. 68/2017/ND-CP of the Government is assessed to create favorable conditions for managers and enterprises, with many important new points. According to this decree, in terms of scale and industries attracting investment, ICs shall not exceed 75ha and not less than 10ha (in mountainous districts and craft village clusters, not less than 5ha); attract and relocate SMEs, cooperatives and cooperative groups; Particularly, craft village clusters are allowed to attract households and individuals in craft villages for production and business.

This Decree stipulates four IC management units, including: IC technical infrastructure investor is an enterprise or cooperative, who makes investment in the construction, management and exploitation of IC technical infrastructure system; District-level IC development center, which had been set up under Regulation on IC Management issued together with the Prime Minister's Decision No. 105/2009/QD-TTg; District-level IC management board, which is an unit attached to district-level People's Committee and public non-business unit under provincial Department of Industry and Trade.

According to Decree No. 68/2017/ND-CP of the Government, incentives and support policies: Investment projects in ICs (secondary projects) are exempted from land rent for 7 years (craft village IC is 11 years); investment projects in IC infrastructure are exempted from land rent for 11 years (craft village IC is 15 years) and are considered for credit loans with no more than 70% of total investment. In addition, secondary projects are added to the list of geographical areas eligible for investment incentives, and IC technical infrastructure construction investment projects are added to the list of special industries eligible for investment incentives according to regulations and are eligible for making investment in the form of public-private partnerships.

Regarding supporting policies, the Central budget shall support investment promotion, conferences, seminars, professional and law training, policy research on ICs. Local budget shall support the organization of investment promotion activities; investigation, survey and relocation of production establishments that cause environmental pollution or have risks of environmental pollution in craft villages or residential areas. The Central and local budgets shall consider and support investment in the construction of IC technical infrastructure, with priority given to craft village ICs. This Decree also stipulates the management of public services and utilities; rights and obligations of IC technical infrastructure investors; rights, obligations, and legal procedures for investment in production and business in ICs...

The government co-operates with enterprises

According to Nguyen Van Danh, Director of provincial Department of Industry and Trade, Decree 68/2017/ND-CP is considered as a stimulus for ICs, with many important incentives. One of the outstanding incentives in this decree is to stipulate that production investment projects in ICs are exempted from land rent for 7 years and enjoy other incentives as provided for by laws; In case of multiple preference levels, the highest preferential level shall be applied. At the same time, IC technical infrastructure investment projects are exempted from land rent for 15 years, and are considered for borrowing credit loans with no more than 70% of total investment, and enjoy other incentives as provided for by laws; In case of multiple preference levels, the highest preferential level shall be applied.

IC technical infrastructure investment projects are considered for making investment in the form of public-private partnerships. Particularly, technical infrastructure investment projects of craft village ICs shall be exempted from land rent up to 15 years, and considered for the State's credit loans at a level not exceeding 70% of total investment. The Decree stated that local budget will support the cost of relocation of enterprises, cooperatives, households and individuals from craft villages into IC, and the specific support level will be decided by Provincial People's Committee; Central and local budgets shall consider and prioritize investments in the construction of technical infrastructure for craft village ICs.

Decree No. 68/2017/ND-CP also clearly defines rights and obligations of Department of Industry and Trade, District-level People's Committees on the basic principle of IC management; At the same time, it has a mechanism to report statistics, data building, and improve the business environment for enterprises through the implementation of OSS rules in administrative procedures.

Mr. Danh said, in the process of implementing projects, businesses should work directly with specialized units of Department of Industry and Trade. The Department will collaborate with functional branches and localities to create favorable conditions for enterprises in accordance with Decree No. 68/2017/ND-CP. Department of Industry and Trade will continue to listen to and support enterprises; continue to remove difficulties to keep attracting investment in ICs in the coming time.

Reported by Tieu My – Translated by Ngoc Huynh

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To solve difficulties of industrial clusters

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