Workers at South Korea invested Kad industial SA Viet Nam Co in the central city of Da Nang make suits for export. — VNA/VNS Photo Van Son

DA NANG (Biz Hub) — The central city of Da Nang has failed to attract a significant amount of foreign direct investment (FDI) despite its top rankings in the Provincial Competitive Index (PCI) for the third consecutive year in 2015, local leaders said.

In PCI 2015 - based on responses from 11,700 enterprises comprising 10,200 domestic private firms and 1,500 foreign invested enterprises in Viet Nam - the city was applauded by surveyed firms for its efforts in administrative reforms, especially in providing transparency, reducing transaction costs and being pro-active.

Reports from the municipal Party Committee revealed that the city lured only US$44.3 million worth of FDI in 2015, ranking 33rd among 53 provinces and cities nationwide in terms of FDI.

The sluggish influx of FDI into the locality was also seen in the past three months of this year. Only nine new foreign-invested projects worth $2.53 million were granted licences, while four operating ones were allowed to raise capital by more than $400,000.

The city has a good investment environment and high competitiveness index, but investors are still not enthusiastic about investing there, online newspaper Infonet.vn quoted committee secretary Nguyen Xuan Anh as saying.

Deputy Secretary of the committee Vo Cong Tri said the city's tax and land rental incentives were not on par with other localities. For example, land rentals in the city-based Hoa Khanh Industrial Zone reached an average of $1 per metre each year, higher than $0.8 recorded in the nearby Dien Nam-Dien Ngoc IZ in Quang Nam Province.

A lack of cleared land has also brought the city challenges in drawing up a specific development plan for service logistics, as well as banking and finance sectors, he said, adding that ineffective investment promotion was also problematic.

Vo Minh, director of the State Bank of Viet Nam's branch in Da Nang, said the city had to deal with three major issues if it wanted to attract large foreign investors. Those included an attractive investment policy, high-skilled personnel and an adequate support industry.

Initially, the city should define the sectors that should provide more incentives, he noted.

According to Anh, top priorities should be given to improving the city's investment climate, speeding up infrastructure development of the Da Nang Hi-Tech Park and facilitating the implementation of licensed projects, in addition to determining the withdrawal of investment licences for projects that failed to begin as scheduled. — VNS