Competent governmental agencies may have to make more indepth appraisals of large-scale foreign direct investment projects, if the prime minister approves the Ministry of Planning and Investment’s proposal on the issue.
The Ministry of Planning and Investment (MPI) has recently submitted a proposal to the prime minister asking him to add more appraisal steps for large-scale foreign direct investment (FDI) projects acquiring large areas of land or strongly affecting the nation’s economy.
According the proposal, the MPI in association with other ministries will appraise the feasibility of such proposed FDI projects and their impacts on the economy, before they reach the prime minister for in-principle approval.
The proposal is aimed at improving the quality of FDI inflows into the country, according to the MPI. At present, local authorities are in charge of appraising and licencing most FDI projects in accordance with the government’s decentralisation policy.
Two weeks ago, the ministry also ordered municipal and provincial people’s committees to report the implementation of FDI projects with the total investment capital above $100 million or with land areas over 50 hectares.
According to the MPI, many local authorities had granted investment certificates to too many ineffective and poor quality FDI projects since 2007. Many foreign investors never started construction of their projects in Vietnam years after receiving investment certificates. Many have seen their investment certificates revoked for failing in their commitments.
Nguyen Mai, chairman of the Vietnam Association of Foreign Invested Enterprises, said an independent appraisal council for large-scale FDI projects was needed.
“The appraisal by the MPI and other related ministries will reject projects that could negatively affect the economy or society,” said Mai, referring the environmental pollution detected at some foreign invested companies in the recent years and the long-delay of many other multi-billion dollar FDI projects. “I believe if this proposal is approved by the prime minister, the quality of FDI will be significantly improved,” he said.
Adjustments to the decentralisation policy were proposed by the MPI at a national FDI conference in Hanoi in March. However, many representatives from local authorities attending the event argued that governmental approval for large-scale FDI projects added more unnecessary administrative procedures to the licencing process and would force foreign investors to wait longer to obtain investment certificates.
Mai countered that many local governments were not yet well enough prepared to appraise large-scale FDI projects, or projects capable of affecting the nation’s socio- economic development.