Last update 6/16/2012 7:00:00 AM (GMT+7)
  

BUSINESS IN BRIEF 16/6

Low-graderice exports likely to fall this year

 

Viet Nam's rice exports may drop by 1million tonnes compared to last year if the world rice market continues to facedifficulties, according to forecasts from the Ministry of Agriculture and RuralDevelopment.

Thecountry's rice exports may fall to 6.2 million tonnes from the 7.2 milliontonnes of last year.

Theministry said the country's traditional markets including the Philippines and Indonesiahave reduced their rice imports from Viet Nam,despite increases in rice demand from Asia and Africa, including China, Malaysia,Senegal and the Ivory Coast.

Accordingto the Viet Nam Food Association (VFA), so far this year Vietnamese companieshave signed contracts for exports of 5 million tonnes of rice by the end of theyear, and 2.7 million tonnes of that amount have been shipped to buyers.

Theremaining 2.3 million tonnes will be shipped later this year.

By the endof June, a total of 3.3 million tonnes of rice will be delivered to buyers.

TruongThanh Phong, VFA chairman and general director of the Southern Food Corporation(Vinafood 2), said that in June Mekong farmers would harvest 400,000 ha of theover 1.5 million ha under the summer – autumn rice crop.

Some 8.6million tonnes of paddy, including over 5 million tonnes of commercial paddy(equivalent to 2.5 million tonnes of rice for export), are expected to beharvested in this summer – autumn crop.

With some680,000 ha under rice cultivation, this year's autumn – winter crop, which isscheduled to be harvested in November, is expected to bring in an additional3.3 million tonnes of paddy.

In all,some 11.7 million tonnes of paddy will be harvested in the coming summer –autumn and autumn – winter crops, and an additional 3.5 million tonnes of ricewill be available for export in 2012.

Phong saidit would be easy to sell off the high-quality rice under the autumn – wintercrop but rather difficult to find buyers for lower-quality rice of the summer –autumn crop.

The latterhas been facing harsh competition from low-quality rice from India and Myanmar.

Under sucha situation, VFA has sent an official dispatch to the ministries of Finance,Agriculture and Rural Development, and Industry and Trade, asking theministries to announce the production costs of summer – autumn crop 2012, andto extend the bank loans provided to VFA members for purchasing 1 milliontonnes of rice in reserves.

VFA hasalso asked the ministries to issue policies on consumption of rice under thesummer – autumn crop that will be harvested mostly in July and August.

Publicinvestment law needs expanding, clarifying

Opinions onpublic investment differed among experts at a conference in Ha Noi on Tuesday,but they generally agreed the law needed to be expanded and clarified.

Theconference, co-organised by the Government Office and the German Agency forInternational Co-operation (GIZ), heard that investment in State economicsectors was high, accounting for 40 per cent of total investment, Thoi Bao Kinhte Viet Nam(Viet Nam Economic Times) reported.

"TheState budget had been used to invest in many economic areas that were notpublic investment sectors," the conference heard.

Theycovered fields such as restaurants, hotels, tourism, construction, trade andreal estate, which made up 12 per cent of all State investment.

Meanwhile,transportation, power, water supply and sewage, health care, education, andinformation and communications made up 42 per cent of the States totalexpenditure.

Theremainder of the State budget is disbursed to ministries, cities, provinces andlocalities.

However,management of public investment capital resources is still unsystematic andineffective, whereas the investment demand of ministries, cities, provinces andlocalities is huge. This has accelerated risks in public, Government andoverseas debt, according to experts.

Nguyen DinhCung, deputy director of the Central Institute for Economic Management (CIEM),said: "There were various opinions about PI. However, it should not beclassified by capital resources [State, ODA]. PI should be understood in moregeneral terms. Any investment projects from any capital resources that areimplemented by the State is really PI or State investment."

To composea comprehensive Law on Public Investment, it is necessary to clearly determinethe role and function of the State, the Government and localities in key publicareas to help boost the socio-economy, while focusing on important projects,the conference heard.

Vu DinhAnh, an economist, said the State economic sector accounted for a largeproportion – 40 per cent – of the whole economy. There are more than 1,300State-owned enterprises (SOEs), but investment effectiveness in these firms islow, which has negatively affected economic development.

"Companiesthat operate in competitive markets and non-public sectors will not be grantedinvestment capital from the State budget and they have to mobilise funds fromother resources," Cung added.

It shouldalso be pointed out that some districts and communities that should not hadbeen given State capital had still managed to acquire it, he said.

Cung addedthat lawmakers should pay attention to clarifying rules on withdrawing capitalfrom unnecessary SOE projects.

Meanwhile,GIZ economist Constantin Blome, said it was essential to clarify targets andcapital resources when it came to the law. This would help the country dealwith the overlap in current regulations.

Banktargets students and poor

 

More thanVND9 trillion (US$432 million) from the Viet Nam Bank for Social Policies(VBSP) has been injected into society, with priority given to poor householdsand students, and public utilities in rural areas, according to the bank'sdeputy general director Nguyen Duc Hai.

The VBSPwas established in 2002 to provide credit for the poor and other beneficiaries.

It isregarded as an efficient tool of the Government in mobilising various resourcesdomestically and internationally to perform the Government's designatedsocial-policy lending.

The bank isable to offer loans to the poor and government social-policy beneficiariesthrough grassroot networks, appropriate infrastructure, and private and publicparticipation, particularly through bonds.

Of thedisbursed money, VND3.5 trillion ($168 million) was lent to poor households,VND3 trillion ($144 million) worth of loans to students and pupils, and VND778billion ($37.3 million) to production and trading enterprises inunderprivileged areas.

At leastVND776 billion ($37.2 million) was invested in projects involved in clean-watersupply and rural sanitation, and VND339 billion ($16.2 million) for employmentcreation.

Interestrates on these loans are much lower than rates being offered by commercialbanks: 10 per cent for loans for clean water and environment projects; 7.8 percent of loans for poor households, students, and job creation; and between 3per cent and zero per cent of loans for underprivileged ethnic-minority areas.

After nineyears of operation, the bank's lending and debt collections have proceededsmoothly, thanks to appropriate investments, according to Hai.

The bank'scurrent total outstanding loans are VND107.2 trillion ($5.1 billion), of whichbad debt accounts for only 1.4 per cent or about VND1.5 trillion ($72 million).

In 2011,the bank lent nearly VND32 trillion ($1.5 billion) and collected debt worthVND2 trillion ($96 million).

In thefirst five months of this year, VBSP each month collected between VND200billion ($9.6 million) and 250 billion ($12 million) from due debts.

"Thebank's debt collection has not met difficulties since borrowers were welleducated about responsibilities to pay the loans back, as they benefit from thegovernment's preferential credit policy," Hai said.

The capitalthat the bank used for the government's socio-policy lending was mainly raisedfrom bonds issued under a government guarantee, he said.

In 2012,the credit growth target that the Government has set for the VBSP was 10 percent (equal to VND9,318 billion) compared with last year's figure.

To realisethis, the bank was allowed by the Government to issue VND26 trillion ($1.2billion) worth of bonds this year.

In the lastfive months, the bank raised VND12,680 billion, ($609 million) nearly half ofthe target for the year, Hai said.

He said thebank had only met nearly 30 per cent of the people's needs, and that demand wasstill very high.

"Ourtop priority still remains with the poor and beneficiaries of government socialpolicies," he added.

HCMC todevelop waterways for tourism

The HCMCtourism sector has developed a project to exploit short, medium andlong-distant routes from the town to Mekong Delta Provinces,Cambodia, neighboring province of Dong Nai and districts in the city.

             

Runningalongside Tau Hu and Kenh Doi canals, now completely dredged, is the Vo VanKiet road that has contributed to improving the environment and bringing abeautiful look to the city with advantage for tourism waterway development.

 

HCMC hasgreat potential to develop its waterways for tourism like other countries inthe region. Water environment, environmental sanitation, landscapes along BenNghe, Tau Hu, Kenh Doi, Kenh Te canals have been improved. District 8authorities will develop tourism, but preserve historical and cultural sites,and protect the environment, said Nguyen Thanh Chung, chairman of the districtPeople’s Committee.

Thedistrict government will promote destinations such as Binh Dong Temple, Long Hoa Pagoda, floating marketon Binh Dong pier, ancient and night streets.

Accordingto experts and leaders of travel companies, the municipal authorities candevelop short day tours presenting daily activities of local people alongcanals to international visitors. The local government should also createadvantage for enterprises to build their own piers to pick up tourists.

HCMC hasgreat potential to develop its waterways but it has very few products to meetthe demand for this special tourism and lacks facilities like a fully plannedwaterway network, boats, harbors, and stopovers for tourists.

SHTP isstill not attractive to investors, a decade on

AlthoughSaigon Hi-Tech Park (SHTP) has attracted many international firms, it is stillnot attractive to investors compared to local industrial parks after 10 yearsof establishment, said Le Bich Loan, vice director of SHTP.

Industrialparks such as VSIP, Que Vo, Quang Chau have lured many hi-tech projects in thesectors of manufacturing and service as they have strong infrastructure systemsand offer supporting services and incentives like SHTP, Loan told a seminarheld to mark the park’s tenth birthday.

Anunderdeveloped infrastructure and a lack of utility services have preventedResearch & Development projects from developing in SHTP as they needin-house services to satisfy the living standards of project experts.

Otherutility services of SHTP such as power and water supply, waste water treatmentand telecom connection are now under development as they currently cannot meetthe demands of hi-tech firms.

Forinstance, an unstable power supply will have a deep impact on productionactivities of hi-tech producers. Weak transport infrastructure remains a majorobstacle for enterprises which are based in SHTP.

Meanwhile,SHTP is also facing tough competition from regional countries such as India, China,the Philippines and Thailand whohave skilled hi-tech human resources and developed supply chains in hi-techmanufacturing.

SHTP isless competitive than other industrial parks as all of them are now offeringinvestors the same incentives for land leasing, said Le Trong Hieu, CBREVietnam senior manager of Industrial & Logistics Services.

At regionallevel, it is also less attractive to foreign investors compared to Thai orLaotian rivals with good supply chains and developed infrastructure, Hieu said,adding that investors are shifting their focuses on production costs instead ofinitial investment capital.

Mosthi-tech producers must import a large amount of input materials. The countrymust map out a roadmap to develop supporting industries for the hi-tech sectorto improve local supply chains.

Nguyen VanLang, deputy minister of Science and Technology, said at the meeting thatinvestment promotion policies and development scheme for SHTP is problematic.

As of now,SHTP is home to 61 projects with total registered capital of over US$2.05billion. Hi-tech firms in the estate so far have earned more than US$2.7billion in export value, accounting for half of the city’s hi-tech exportswhile they have spent US$2.56 billion on imports.

How to savethe property market?

Given thedifficulties facing the national economy, the real estate business seems to befinding a way out of the mess. But how to save the property market remains anopen question.

  

Theproperty market has never before fallen into such a prolonged state ofsluggishness as it is currently experiencing.

TheChairman of the Ho Chi Minh City Real Estate Association (HoREA) said up to 90percent of property businesses suffered losses last year because they failed tosell land and houses while having to pay very high lending interest rates. Inaddition, they are not one of the business groups that are eligible forpreferential loans.

In a recentonline public dialogue on the Government e-portal, Minister of ConstructionTrinh Dinh Dung attributed the cause of the gloomy market primarily to theshortage of credit capital. If abundant capital resources are made available atlower interest rates, the market will grow along the right track.

At a recentseminar on ways to help the property market bounce back, Chairman of theVietnam Real Estate Association, Nguyen Tran Nam, said there have been somepositive signs in the market due to the Government’s plan to disburse theremaining VND120,000 billion in capital resources allocated for publicinvestment, which is expected to help businesses iron out snags.

The inflowof money from the public is now mainly being invested in gold, US dollars anddeposits, but sooner or later it will flow into real estate when interest ratesare lowered and other investment channels are no longer so attractive.

If theamount of available capital in banks increases in the near future, real estatebusinesses can borrow again to give the market a new lease on life, Nam said.

The bottomline regarding the nearly frozen the market is that the supply is greater thanthe demand, which has led to a significant decline in real estate purchases.

Over thepast decade, the property market attracted a large amount of social resourcesbut it was primarily focused on high-end houses, which were bought mainly byspeculators. The large sums invested in this market segment have adverselyaffected the market's development.

The fact isthat high-end apartments and villas have mushroomed everywhere while most urbanresidents cannot afford an expensive house and still live in cramped, narrowapartments.

Real estatedevelopers pay little or no attention to building houses for low- andmiddle-income earners because the profit ratio is not as high as that forhigh-end houses. As a result, the supply of up-market housing is higher thanthe demand, forcing real estate businesses to sell off properties at reducedrates to cut their losses.

However,reducing prices to save the property market, as suggested by businesses, isineffective. Recently, several investors proposed building apartments suitablefor the pockets of those with a real demand for accommodation. But in fact,what this solution actually proposes is dividing large apartments into smallerones for easier sales, while the investors maintain their profits based on thesquare meter area of the entire building.

To resolvethe situation, the main cause must be properly analyzed to find an effectivesolution to help the sluggish real estate market get out of the doldrums andmove towards sustainability.  

Commodityexchanges show shortcomings amid pilot

Born afterthe stock exchanges, the commodity exchanges in Vietnam have quickly fallen intoloss and slow development after operating for only two to three years under thepilot schemes.

In January2011, the Vietnam Commodity Exchange (VNX), the first of its kind in thecountry, debuted in Ho Chi Minh City,offering businesses and individuals a new channel for coffee, rubber and steeltransactions.

Operatingas a joint-stock company with a registered capital of VND150 billion (US$7.2million), the exchange offers trading in futures contracts and swaps as well asbrokerage, goods evaluation, transactions, investment consulting, riskmanagement, derivatives and financial support.

But theyoung trading channel has been struggling to find customers and investors, withthe electric panels rarely opened, and the rows of seats hardly filled.

In thefirst quarter of this year, the total transaction volume on VNX was only 12,000lots (the unit used on the exchange), or an equivalent VND530 billion worth oftransaction contracts, figures from its report show.

Thefull-year figure of 2011 was only some 93,000 lots, or VND7.3 trillion. Themost-traded commodity was coffee, while steel had almost no transactions.

As of lastMarch, there were only 1,981 transacting accounts registered at VNX. Theexchange said it received mostly individual investors, who joined the exchangeonly to study and survey the market.

“There arenow few investors at VNX, while liquidity is low, and transactions are mostlybetween individual investors as we failed to exploit organizational investors,”admitted VNX CEO Tran Duy Phuong.

Similarly,the Buon Ma Thuot Coffee Exchange Center (BCEC) received the government’sgo-ahead in March 2011 to begin its pilot operation with coffee being the onlycommodity allowed for transaction.

BetweenMarch and December 2011, BCEC reached a total transacting volume of 7,000 lots,and VND600 billion.

Thegovernment has recently allowed the exchange to extend its time period untilthe end of this year, while it is struggling in a tough spot with localinvestors showing little interest in transactions, while coffee growers havelittle trust.

Thesituation is no better for Son Tin Exchange (STE), a subsidiary of Sacombank,which has been operating for the last three years on transactions of steel,iron, and fertilizer.

“Althoughwe have never incurred losses, profits are just too modest,” director Phan VuHung admitted.

Besidesreceiving little interest from investors and businesses, the commodityexchanges are also facing some shortcomings rooted from legal frameworks andtheir operational methods, insiders said.

Concurringwith the view, Pham Dinh Thuong, deputy head of the legitimate department ofthe Ministry of Industry and Trade, elaborated that it is stipulated that thetotal transacting volume on the exchange not exceed 50 percent of the totalproducts of that commodity in the previous year.

Each memberof the exchange is also restricted from transacting a volume that exceeds 10percent of said production.

Meanwhile,Phuong of VNX said his exchange has petitioned the Ministry of Industry andTrade to offer tax incentives to businesses joining the commodity exchange.

VNX alsocalled on the State Bank of Vietnamto issue a special bank account for commodity transactions.

“Liquiditycan only be improved if the exchanges receive participants from internationalinvestors.

“Thus, weneed to create accounts to manage the investment of international investors onthe Vietnamese commodity exchanges,” he urged.

Businessesface capital shortages

Nearly18,000 businesses were dissolved in the first four months of 2012, up 9.5percent over the same period last year.

Apart fromnumerous difficulties caused by high inflation and interest rates in 2011, mostbusinesses found it difficult to access preferential loans.

Althoughthe Government already launched bailout packages and offered low-interest loansto help them iron out their snags, many small-and-medium-sized enterprises(SMEs) have failed to benefit from such incentive policies.

Tran HongPhuc, Deputy Director of Phuc Hung Construction JSC, says banks are stillhesitant to grant them loans for further investment. It is no easy task tomobilize bonds or borrow loans from credit organizations, he adds.

The mainreason is most SMEs do not have enough assets to make a deposit when their baddebts are growing.

Anotherreason, cited by Pham Thien Long, a senior official from HDbank, is that theycan hardly meet basic requirements from the banks, let alone pay back theirloans.

Accordingto Long, both banks and businesses encounter difficulties following the StateBank of Vietnam (SBV)’s recent decision to lower interest rates by 2 percent.With domestic businesses facing a decline in the purchasing power and otherrisks, banks have good reason to stop lending.

EconomistLe Dang Doanh says that it is essential to deal with bad debts to consolidatetheir trust in business performance. He proposes establishing a creditguarantee fund to settle bad debts and remove obstacles to both banks andbusinesses.

The SBV hasreduced deposit interest rates by 2 percent from 11 to 9 percent per year tocut loan rates and help businesses to boost production. Nguyen Thi Hong, Headof the SBV’s Department for Monetary Policy, says the central bank willstabilize interest rates from now to the end of this year.

In thecurrent situation, businesses should grasp every opportunity by way of restructuringtheir operations and production chains in line with market fluctuations,instead of depending too much on banks.

However,not a few businesses are still waiting for the State’s intervention in the bankrestructuring process.

Switzerland helps CNS develop chip plant

Scientistsof the Swiss Federal Institute of Technology will give Saigon IndustryCorporation (CNS) technical support to develop an electronic chip plant withannual output of 400 million chips in the Saigon Hi-Tech Park in HCMC’s District9.

Theinformation was released by Nguyen Can Tho, general director of CNS, at ameeting with the city government on Tuesday.

CNS iscurrently preparing the project so that it will be given the go-ahead from thecity authorities to kick off construction by early 2014. The chip plantrequires total investment capital of US$270 million with all output for thelocal market, Tho said.

Each year,the country spends US$2 billion on imported chips, according to CNS.

When inplace, the chip factory will basically satisfy domestic demand for chips in abroad range of sectors such as automation industry, civil electronics, wirelessconnection, communications and information security.

Between nowand 2015, CNS needs VND13.7 trillion to deploy a number of big projects such asa mechanical engineering complex, three supporting industry zones and an uPVCplastic stake factory.

Themechanical engineering complex will require total investment capital of VND2.8trillion. The complex, which aims to serve the city’s mechanical industry, isexpected to commence construction by early 2014.

CNSreported that it would shut down three loss-making subsidiaries includingLidico Electro-Mechanics Co., Mechanics Molding Enterprise and Saigon ElectricsInformatics Co. It will set aside VND120 billion to turn them into medium-sizedenterprises for better operations.

Opportunitiesfor garment, footwear and wood furniture businesses

Coordinationamong sectors and industrial groups is a key measure to help garment, footwear andwood furniture businesses improve their chain value and competitiveness in bothdomestic and foreign markets.   

Accordingto the United Nations Industrial Development Organization (UNIDO)’s CompetitiveIndustrial Performance (CIP) report in 2011, Vietnam’s CIP dropped from 72nd in2005 to 58th in 2008/2009 among 118 countries and territories. Its trade andproduction growth of 20-21 percent was still much higher than elsewhere in theworld.

Forinstance, Vietnam’s exports of manufactured goods reached US$36.4 billion in2009, double the 2005 figure of US$17.5 billion and nearly 6 times higher thanthe 2006 figure of US$6.7 billion.

However, Vietnam’s share of the world market has remainedmodest compared to its neighbouring country, China while there is strongcompetition from other countries in the region.

The VietnamLeather and Footwear Association (Lefaso) says it exports 91 percent of itsproducts to the EU, US and Japan.Vietnam is placed second andthird among footwear exporters to the EU and US markets despite fiercecompetition from China, India, Bangladeshand Indonesia.

Lefaso’sVice Chairman, Diep Thanh Kiet, says the average monthly labour cost in Vietnamis about US$180-250 per person, higher than in India (US$150-180), Bangladesh(US$80-120) and Indonesia (US$120-150) but lower than in China (US$250-300). Inaddition, Vietnam has toimport half of raw materials for production but China has an abundant sourceavailable.

Thefootwear sector also finds itself in a bind as the advantages of cheap labourcost and design expertise no longer have a magic touch. So does, the garmentsector that has to import around 80-95 percent of raw materials for production.

In the caseof wood furniture makers the shortage of skilled workers, professionaldesigners and raw materials makes their products more expensive and lesscompetitive than those made in China.

Forexample, the production cost of a wood chair is US$19.6 in Vietnam but only US$12.67 in China, not tosay the Chinese design is more attractive.

UNIDO’srepresentative in Vietnam,Patrick J.Gilabert, says this is mainly due to the lack of skilled workers toimprove the design and quality of products.However, these problems cannot be solved overnight.

The bottomline is that businesses need to join efforts and coordinate with foreignpartners to sharpen their competitive edge in both domestic and internationalmarkets.

Patricksays Vietnamhas bright prospect for long-term investment with estimated growth of 6.4percent in 2010-2050 as many foreign investors are keen to expand business inthe country.

Competitors,oversupply drag down flower prices

Just weeksago, the floral village of Van Thanh in Da Lat bristled with the influx oflaborers to pick and pack roses bound for nearby provinces and Ho Chi MinhCity. Pham Thi Huong’s family had to hire two workers just to keep up.

But now,flowers wilt and gardens go untouched for days in this central highlands province of Lam Dong.

Huong andher relatives usually harvest every two days, but no one shows interest anymorein stepping into their 1,500-square-meter garden. No one is tending to thethousands of reddening roses in the greenhouse because prices have plummeted asmuch as 75 percent.

Manyflorists in Da Lat said they sell roses at VND200 to 500 each, down 50 percentfrom nearly two months ago. Last month, they said, the price averaged VND800 to1,000.

Huong saysit is simply more economical to let the roses blossom. Her trading partner in Ho Chi Minh City won’taccept more stock, even at such prices, because sales are slumping.

Lilies,traditionally treated as an aristocratic flower, also have dropped to VND20,000per bundle of 25 plants.

Lam VanHoang, the owner of a lily garden in Ward 7, said she just had to accept themarket price and hope it wouldn’t last.

The famouschrysanthemums of eastern Da Lat are suffering the same fate, going forVND1,000 per bundle of 5 plants.

“Traderslook into the flower garden and then shake their head, going away for manyreasons,” chrysanthemum farmer Nong Van Dan said. “But the main one is thattheir unsold stock is rising to an alarming rate.”

Tran HuyDuong, chairman of the Da Lat Flower Association, said that localflowers cannot compete with Chinese imports, especially the lily, which haveflooded the market and driven down prices.

While thespring weather has allowed an abundance of local supply, demand has not keptpace. Dr. Nguyen Duc Cu, deputy head of the Da Lat economic department, saidconsumption has dropped in the absence of large, nationwide festivals.

Industrialparks abandoned with no infrastructure

Attractingeven a single investor is now beyond the reach of certain industrial parks inthe Mekong Delta provinceof Tien Giang, as theirinfrastructure projects have remained in the blueprints for years.

The largeland plots inside the industrial parks (IP) are thus left abandoned, whilefarmers, who had to relocate to give their lands to the construction, havenowhere to start work on their agricultural production.

Afterreceiving the go-ahead in late 2008, the 285-hectare Soai Rap Industrial Park in Go Cong Dong Districthas so far received only one investor -- the Petrovietnam Steel Pipe JSC. Mostof the IP area is now covered with weeds.

Located notfar from Soia Rap IP is the Binh Dong IP, spanning 220 hectares in Go CongTown. The project was approved three years ago, but no construction work hasever been started.

Nguyen AnhTuan, chairman of the town’s people’s committee, said the infrastructurecontractor Khang Thong Co has planned to build a 10-hectare residential areafor locals who had to relocate, but site clearance has yet to be done.

“Somebusinesses have visited the IP to look for investment chances, but once theylearn of the difficult transport route from here to Ho Chi Minh City, they all leave,” said Tuan.

“Goods mustbe transported to My Tho City, and take on National Highway 1A or the Trung LuongExpressway to HCMC, which is a long and costly route.”

Nguyen VanKhang, chairman of the provincial people’s committee, said he is constantlyworried as the two IPs show no positive signs despite the province’s effort toboost investment.

However,investors simply leave immediately when they learn that there are no decentroads leading to the sites, and no bridges to facilitate transport to Ho Chi Minh City, hesaid.

As the landinside the IP are zoned for industrial production, locals cannot plant theiragricultural crops there, he added.

“Anotherconsiderable waste is a VND1-trillion water plant in Chau Thanh District, whichwas built to supply clean water to the IPs,” he lamented.

The onlyway to facilitate transport between the IPs and HCMC is the My Loi Bridge,which connects Go Cong Town of Tien Giang and Can Duoc of Long An province, aneighboring provinceof HCMC.

But workwas started on the road leading to the bridge and then stopped, according toNguyen Thi Minh Thuy, deputy director of the Tien Giang Department ofTransport.

“Hence, theBinh Dong IP project may be delayed for several more years,” she said.

Meanwhile,the 8-km road leading to the Soai Rap IP will need VND775 billion worth ofinvestment, but insiders said they have no idea when the project will beimplemented.

“Investorssaid that inadequate traffic is the main reason they are hesitant in openingtheir pockets,” said Pham Minh Duc, head of the Economy – Infrastructure Officeof Go Cong Dong District.

“By thetime the My Loi Bridge is completed, these investors may have already foundsomewhere else to spend their money.”

Localauthorities allegedly favor firm over tax debt

Manybusinesses in Thanh Phu District of Ben Tre Province have recently expressedoutrage after discovering that the provincial and district’s people’s committeehave preferentially allowed a seafood company to delay paying a huge amount ofvalue-added tax over a long time.

Minh TienCo currently owes VND12 billion worth of VAT tax it had to pay in 2011,according to Vo Van Anh, deputy head of Ben Tre Tax Agency.

Earlier ithad asked for an extension on the total tax of VND15 billion, saying itscustomers had yet to clear their payments.

The companylater paid VND3 billion, said Anh, who admitted that Minh Tien Co is noteligible for any tax deferral as per laws.

“However,as the district standing communist party committee, as well as the Thanh PhuDistrict’s and Ben Tre Province’s people’s committees, have sent a documentordering the tax agency to approve the deferral, we have extended the taxpayingtime to the beginning of the first quarter of this year,” he said.

However, itis now six months since the deadline, and Minh Tien Co has yet to clear theirliability, while the said committees have also done nothing to prompt them topay.

Accordingto a source close to Tuoi Tre, on October 4, 2011, Bui Van Lam, chairman ofThanh Phu’s people’s committee, chaired a meeting to approve a deferral forMinh Tien Co from June to August 2011 on its VND14-billion VAT tax.

In ameeting a month later, the district standing communist party committee proposedto delay the taxpaying of some businesses to early 2012. The proposal wasapproved by the province’s people’s committee on January 12.

But MinhTien Co has since refused to repay their taxes.

Anh, of thetax agency, said he will order the agency in Thanh Phu district to handle thecase as per tax laws.

Minh TienCo will be fined for late taxpaying, he said.

However,the public’s confusion over why a private-owned company can receive suchincentives from local authorities remains unanswered, as officials at thedistrict’s people’s committee refused to meet the media.

 
*
*
*
  Send