The 10-year-old Dung Quat Economic Zone has been growing very rapidly, and will develop more rapidly in the future, especially when the Dung Quat oil refinery becomes operational. The EZ’s operation mechanism has become unsuitable and experts have called for a new mechanism for the EZ – a new coat it can grow into.

The Dung Quat oil refinery, the ‘heart’ of the Dung Quat EZ, is now in the final stage of construction and installation before becoming operational in February 2009. There, in the EZ, are a deep water seaport and big industrial zones with heavy industry projects on laminating steel, building ships of up to 400,000 DWT, urban areas and a tourism complex. A general hospital with 300 beds, culture-sports centre, television centre, and vocational school have also arisen. The general EZ is taking shape here, in the central province of Quang Ngai.

By mid October 2008, 160 projects had been licenced in Dung Quat EZ with the total registered capital of $10.5bil. Of this amount, $6bil worth of projects had been implemented.

Most recently, Japan’s JFE Steel officially asked the Prime Minister and relevant ministries to assist it in its feasibility studying on a steel complex project with the estimated capacity of 6-10mil tonnes of raw steel a year and estimated investment capital of $5bil.

Lacking workshop premises

Under the construction programme by 2020 approved by the Prime Minister in 2007, Dung Quat EZ has the total area of 10,300 ha, of which only 2,333 ha is reserved for developing industries. The western industrial zones (665 ha) are designed for light industry, while the eastern zones (1,668 ha) for heavy industry.

To date, 76% of the total area of the eastern zones is occupied (1,276 ha) by big-scale projects like the oil refinery (316 ha), shipyard (250 ha), Guang Lian steel mill (455 ha), Doosan (114 ha), Polypropylene factory (20 ha). As such, Dung Quat has no more land to meet investors’ demands for heavy industry projects..

The current infrastructure in Dung Quat EZ has become overloaded. The total investment in infrastructure, both from the state and enterprises, has reached VND1,600bil, or less than 1% of the total value of the investment projects ($10.5bil or VND200tril).

In 2008, the investment capital for the infrastructure development of Dung Quat EZ decreased by 70% over 2007, which is not enough to fulfill half-done projects, and of course, not enough to develop new projects or expand existing ones.

Dung Quat EZ is now seriously thirsty for human resources. The projects here lack tens of thousands of engineers and qualified technical workers. It is expected that by 2010, Dung Quat EZ will need some 40,000 workers in different fields.

In fact, there is a vocational school which has been operational for the last four years, training 5,000 students, including 1,000 skilled workers as ordered by Dung Quat shipyard. However, the number proves to be modest if compared to the demand. Tens of thousands of technical officers and specialists have been brought from other localities.

The new coat for Dung Quat

Tran Le Trung, Head of the Dung Quat EZ Management Board, said that it is now necessary to enlarge the EZ in order to attract $30bil worth of foreign investment by 2020.

In mid 2008, the Quang Ngai People’s Committee and Dung Quat EZ Management Board submitted to the Prime Minister a project on expanding Dung Quat EZ to 63,000 ha, including Ly Son Island and water area.

Trung said that the expanded Dung Quat EZ will include My Han port (or Dung Quat II), which is two times larger than the current Dung Quat port.

According to Le Van Dung, Deputy Head of the EZ Management Board, the Prime Minister has agreed in principle to the expansion of the EZ, assigning relevant ministries to consider the expansion with local and international consultants.

Regarding human resources development, the vocational school has got a licence to be upgraded into a junior college. Guang Lian has signed a contract on training labourers with provincial training establishments. Taiwan’s I-Shou University is considering the possibility of owning a plot at Dung Quat.

However, the most important thing, according to Dr Trinh Thuy Anh, Deputy Head of the Business Administration Faculty of the HCM City Open University, is that the state gives Dung Quat a special mechanism to develop. With the current high speed of foreign investment attraction, it is necessary to expand the EZ as soon as possible and turn Dung Quat into a special economic zone.

Source: Vietnam Net