Vietnam likely to attract US$15 billion FDI in 2007

According to the Ministry of Planning and Investment, US$11 billion in foreign investment capital will pour into Vietnam this year. However, the Foreign Investment Department says that the figure may jump to US$15 billion if the country’s administrative reform is improved significantly. Currently, 14 foreign-invested projects valued at US$21 billion are prepared to operate in Vietnam.

Investors keen on building a railway line

Since early this year, the Ministry of Planning and Investment has received many leaders of the world’s major economic groups. Many of them have urged the Vietnamese side to grant operation licenses.

Recently, The Vietnam National Coal-Minerals Industries Group (Vinacomin) asked the Prime Minister to allow US group Alcoa to invest in a joint venture project in northern Dak Nong province to exploit bauxite ores and Alumin with a capacity of 1.3 million tonnes per annum. According to Vinacomin, a lot of major economic groups want to invest together in the project. However, Alcoa showed its highest determination by accepting all conditions set by Vinacomin, even pledging to build a railway line running from the Central Highlands to the sea with the aim of strengthening transport activities in the region. Furthermore, Alcoa agreed to increase its investment by US$3 billion from the initial investment capital level of US$1.5 billion.

Meanwhile, Starbay Holding group of Hong Kong (China) has applied for projects to build an airport in Phu Quoc (Kien Giang) and a high-class resort with a total area of 510 hectares. After being informed of another group’s intention to invest in the project, Starbay Holding decided to allocate additional funds of between US$600-800 million to the second project. Dak Nong is now finalising necessary procedures to grant an operation license to the group.

But Foxconn is the largest investor ready to invest in Vietnam so far. With total investment capital of more than US$70 billion, the biggest Chinese investor has applied for the building of an information and technology city which specialises in producing electronics products in Bac Ninh and Bac Giang with a total investment capital amounting to US$5 billion.

Phan Huu Thang, director of the Ministry of Planning and Investment’s Foreign Investment Department, says Foxconn now places 150^th among 500 world’s largest economic groups.

Mr Thang notes that 14 foreign investment projects with a total registered capital of US$21 billion are involved in the facilitation and preparation process and that at least 30 percent of the projects will receive investment licenses and be put into operation this year.

Paving the way for investors

To fulfil and surpass the target of FDI attraction for this year, Mr Thang said this March leaders of the Foreign Investment Department will conduct mission tours of 17 provinces and cities which are key to FDI attraction to pave the way for foreign investors to access and implement investment projects. They will also work with local authorities to discuss measures to increase capital disbursement.

By the end of February 2007, the country has 6,992 FDI projects worth over US$62.7 billion and US$28.9 billion has been disbursed.

With regards to the first locality among 17 provinces and cities, which promised to promote investment at a recent working session with Hanoi authorities, Mr Thang says the capital city has great potential to lure more foreign investment this year. The municipal People’s Committee plans to attract US$1.3 billion in 2007 and disburse US$400 million. However, after the working meeting, Hanoi raised its FDI attraction plan to around US$2 billion. Gamuda group from Malaysia alone plans to invest around US$1 billion, while Hanoi is going to grant investment certificate to the UK’s Pacific Land, which will invest US$1 billion to build a bio-technology park in south Thang Long.

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Paving the way for investors