Hanoi's SILICON VALLEY slow to impress

Hanoi’s “Silicon Valley” slow to impress

Foreign investors seek opportunities for investment in the Hoa Lac Hi-tech Park in Ha Tay Province
Nguyen Van Lang, Ministry of Science and Technology Deputy Minister and head of Hoa Lac Hi-Tech Park’s Management Board, explains why the park is struggling to gain its footing.
Hoa Lac Hi-Tech Park was launched in October 1998, however, it seems the park has not lived up to the public and investors’ expectations. Can you explain why?
Nguyen Van Lang: That partly has to do with the delay in clearing the ground for the hi-tech park with only 200 hectares [cleared] in nearly 10 years.
Also, we have only devoted a modest amount of VND200 billion (US$12.5 million) to improving the park’s infrastructure.
For an industrial park, you can clear the ground, build roads and then allow most industrial investors to come in.
For Hoa Lac Hi-Tech Park, we yearn for it to be a comprehensive complex with multiple missions: training and supplying skilled information technology labor to the market, conducting software research and having high-tech services and entertainment centers.
Besides, I feel that Hoa Lac’s location has posed some disadvantages by being 30 km from Hanoi and 152 km from Hai Phong Port.
Over the past year, the government has issued a series of recommendations to boost the park’s development. Have these had any effect?
Merely a month into his term, Prime Minister Nguyen Tan Dung chose Hoa Lac as one of the first places he officially visited.
The prime minister requested Ha Tay Province be responsible for further clearing the ground and urged province officials to ratchet infrastructure work.
Last year alone, we managed to clear another 262 hectares.
We are expecting to clear another 800 hectares.
The government also committed almost VND100 billion ($6.3 million) last year to enhance Hoa Lac’s infrastructure; that was why the park was able to release a microchip product which is expected to bring back total revenue of $10 million.
Still, some say investors aren’t too enthusiastic about pouring money into Hoa Lac. Is that true?
In 2007, more than 500 foreign companies visited Hoa Lac but we were only able to issue permission for five investors – totaling a capital fund of over $200 million.
We plan to license another three or four investors, with projects worth $250 million.
A massive number of software, IT service companies and microchip producers are jumping into Hoa Lac.
Though so far we have not seen a project over $200 million, it’s critical to note that currently, each hectare at the park yields $10 million worth of investment money – a considerable rate nationwide.
The prime minister this year will approve a general guideline in zoning the entire park and detailing zoning instructions for specialized technology areas.
We are speeding up construction of main roads, external walls, and water supply and drainage systems.
And by April, several investment projects worth approximately $600 million will be permitted to enter Hoa Lac.
Why do you think Hoa Lac failed to draw big-name investors like IBM, which had diverted its interest to Saigon Hi-Tech Park in Ho Chi Minh City?
As one of the world’s leading producers in semi-conducting microchips, IBM could have attracted other investors to Hoa Lac.
At the time, IBM was aiming to build the largest chip plant in Vietnam, and Hoa Lac’s infrastructure wasn’t at the same level as Saigon Hi-Tech.
How can Hoa Lac handle the fierce competition among other hi-tech centers nationwide and in the region?
Japanese and Taiwan investors are using what we call a “China + 1” model – meaning as the Chinese market has become saturated, investors are heading toward countries like Vietnam, India and Thailand.
Vietnam has the advantage of being politically stable with an open-minded policy.
We possess a large population of young people; what we must accomplish is supplying hi-tech investment projects with well-trained IT workers and technicians.
I believe that Hoa Lac is seizing its own opportunities as Vietnam continues to be more open.
Would that be possible considering the center’s inadequate infrastructure?
Most of the investors who choose Hoa Lac realize that its infrastructure will be improved and completed in the next three or four years.
By 2010, we expect to finish revamping the transportation system to Hai Phong Port and Noi Bai International Airport.
The situation of clearing the ground, however, could be more difficult for Hoa Lac since we cannot waive the land tax 100 percent for investors like some industrial parks in other provinces.
What will distinguish Hoa Lac within Vietnam’s hi-tech sector?
We cannot yet expect Hoa Lac to reach that level of reputation.
But we hope that it will become a focal point in Vietnam’s IT picture.
Source: Tuoi Tre