Monday, 17 Jun 2019

3 special economic zones in need of US$69 billion

Updated at Thursday, 12 Apr 2018, 12:06
The Hanoitimes - The Ministry of Finance (MoF) said in its appraisal report that the necessary capital investment to set up 3 economic zones to be at VND1.570 trillion (US$69 billion).
Consequently, Van Don special economic zone (Quang Ninh province) would need VND270 trillion (US$11.83 billion) in period 2018 - 2030, in which the domestic- and foreign-funded capital are divided half and half. 
Phu Quoc Island.
Phu Quoc Island.
Total social capital investment to develop 4 main areas of the Bac Van Phong special economic zone (Northern Van Phong, Khanh Hoa province) in period 2019 - 2025 under the calculation of Khanh Hoa province is VND400 trillion (US$17.54 billion). By 2025, it would need at least VND45 trillion (US$1.97 billion) from the state budget for investment phases.
Following the proposal to set up Bac Van Phong special economic zone by the Khanh Hoa Home Affairs Department, it is expected to require at least VND53 trillion (US$2.32 billion) to upgrade technical infrastructures, including 9 main transport routes, 5 center routes and 20 kilometers of railways connecting Van Phong port to North-South railways, among others facilities. 
Additionally, there would be VND46.5 trillion (US$2 billion) in needed to build schools, hospitals leisure and entertainment facilities. The site clearance process would cost VND15 trillion (US$657 million). 
Notably, following the plan for Phu Quoc (Kien Giang province) to become a world class special economic zone, it is estimated that the required total social capital investment would be VND900 trillion (US$40 billion) in period 2016 - 2030, in which domestic-funded capital accounts for 59% and foreign-funded at 41%. 
As at present, Phu Quoc has attracted 377 investment projects with total investment capital of US$17 billion, according to Kien Giang People's Committee. The island collected VND3.5 trillion (US$153.4 million) for state budget, equivalent to 50% of total revenue, but the majority is coming from land-use taxes.
A common thing between the 3 proposals is request for preferential treatment. For Van Phong special economic zone, Quang Ninh province suggested to keep 100% the state budget revenue generated from the special economic zone until 2030. 
In the first 5 years of the special economic zone's operation, the province requested to keep 25% of the domestic revenue (VND2 trillion or US$87.6 million per year).
For Phu Quoc, Kien Giang province proposed resort complex with investment over US$300 million to have small-scale casino integrated. However, the MoF maintained its stance that a casino-integrated resort complex would have to mobilize at least US$2 billion. 
The new draft Law on Special Administrative-Economic Units stipulated that US$2 billion is the minimum capital requirement to integrate a casino into an investment project. Consequently, the disbursement progress must be in accordance with the schedule, but not exceed 8 years since the issuance of investment certificate. 
In this version, investors are still allow to add up investment capital from other projects, but not exceed 50% of total investment in casino - integrated project. Consequently, investment capital for this project must be at least US$1 billion. 
Additionally, the draft Law also stipulated new requirements on investors' financial capabilities, governance experience. More importantly, investors must commit on transferring modern and friendly technologies, training and develop human resources.  
Nguyen Tung
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