InvestLink

Southern Ba Ria-Vung Tau province is taking more prudent approach towards luring foreign direct investment.

The province’s deputy chairman Ho Van Nien recently acknowledged the orientation of wooing foreign direct investment (FDI) into heavy industries to tap local potential provincial authorities adopted in the past 20 years could not bring expected dividends. This was because most industrial equipment was imported and had not left a lasting legacy in the province.

Many shortcomings were exposed on the back of recent booming FDI project development.

For instance, the province is now home to 53 seaports, 23 of which are already operational, while the others will soon reach completion.

Total container-handling capacity of the provincial port system is about eight million 20-foot equivalent units (TEUs), meanwhile the real demand is no more than five million TEUs.

Despite the surplus capacity, the province was set to welcome several new ports in 2012, and 2013, according to the Vietnam Port Association (VPA).

This reality goes counter to investors’ high expectations to turn Ba Ria-Vung Tau into a thriving port area with big loading capacity.

Industry insiders said one of key reasons why ports struggle to source customers is underdeveloped road traffic system and inadequate logistics services.

National Highway 51, the main road connecting Cai Mep-Thi Vai area with the main traffic system, has deteriorated.

Meanwhile, route 956 connecting national route 51 and other major seaports has yet to be completed.

Besides, most of FDI projects operating in provincial industrial parks just engage in processing and assembling simple product devices like the case with South Korea-backed CS Wind Towers plant which specialises in making wind towers for export.

From that upset practice, the provincial management has been more cautious with clear development and FDI attraction targets. Accordingly, it manages to soon address infrastructure woes and set to lure in around $500 million FDI capital in 2012, half of 2011’s figure.

Logistics and supporting industries development were two priority investment areas in the province to make the most of its strong seaport system and create competitive industrial items, turning the province into a modern industrial location, said Nien.

Nien said the province’s economy and FDI attraction had now been less dependent on petroleum, heavy industries and tourism sectors and more efforts were directed into expanding logistics and supporting industries, matching the province’s fifth party conference spirit of building Ba Ria-Vung Tau into a modern seaport city.