Hanoi Industrial and Export Processing Zones Authority (Hiza) vice chairman Nguyen Xuan Linh said site clearance would be finalised this year.

Noi Bai Industrial Park’s (IP) developer, a joint venture between Malaysia’s Renon Group and Vietnam’s Hanoi Industrial Construction, was licenced to invest $5.1 million in developing Noi Bai IP-phase II in 2008 on 14.1 hectares in the capital’s Soc Son district.

The joint venture in 1994 was permitted to pour $29.95 million in the first phase on 100ha. The 100ha Noi Bai IP, with a duration of 50 years, is now fully occupied with 44 projects, of which 43 are foreign-invested ones, capitalised at $465 million.

“Site clearance costs in Hanoi are too high. This is the biggest difficulty during carrying out the second phase,” Linh said, adding that site clearance compensation reached VND1 million ($48) per square metre of agricultural land.

“IPs in general are currently finding it difficult to attract investors because prices of land in the city are too high as compared with those in neighbouring localities, and when operational, Noi Bai IP-phase II will be no exception,” said Linh.

“Land for lease at IPs in provinces of Hai Duong or Ha Nam, which are not far from Hanoi, stand at around $50-70 per square metres while the prices are some $125-130 at Hanoi’s IPs,” he cited.

According to Hiza, Hanoi is currently home to eight operating IPs which have attracted more than 500 projects worth $3.9 billion of foreign direct investment and VND12 billion ($576.9 million) of domestic investment. Till 2020 and an orientation to 2030, the capital plans to raise the total number of local IPs to 33, covering 8,000ha.