FDI News

Hanoi opens doors to smart city future

Amid growing interest from domestic and international businesses, Hanoi will create new opportunities for private investors to join public service projects as a way to raise funds for its ambitious smart city development plans.

Nguyen Duc Chung, Chairman of the Hanoi People’s Committee, said that the capital is poised to become a smart city based on key technologies of Industry 4.0. To this end, besides state funding, the city will have to raise resources from the business community.

“We will reclassify public services towards opening more opportunities for private investors to join in those services they are capable of offering, thus mobilising financial sources to feed the plan,” he said at last week’s Asia-Oceania Computing Industry Organisation (ASOCIO) Smart City Summit 2018 in Hanoi.

“In addition, we plan to maximally outsource services related to software as well as infrastructure of technology businesses, from data centres and security services to channel and other services to raise resources and talents to serve our smart city development plan,” he added.

The chairman elaborated that in order to realise the plan, Hanoi will soon submit to the government its master plan on smart city development and investing in technology infrastructure, and developing applications by 2020.

Accordingly, investment is expected to focus on transport infrastructure, security, healthcare, education, energy, housing development, and combating pollution, which are the sectors in which Hanoi is facing high pressure due to its rapid population growth and fast urbanisation.

The moves announced at the event attracting hundreds of representatives from 10 ASOCIO member countries, international experts, and hundreds of businesses, are considered a potent call on domestic and international investors with expertise in the fields to join in.

According to international experts, Hanoi is one of the three most attractive destinations in Vietnam for international technology groups, including companies from Japan, South Korea, the US, and EU countries. Siemens, GE, ABB, Volvo Buses, Roxtec, and Axis are just some of the prominent names.

“The potential for foreign investors to join smart city projects in Hanoi is great because of a lot of solutions on offer there. International groups have great potential to work closely with local Vietnamese partners to implement the solutions,” David Wong Nan Fay, chairman of the ASOCIO, told VIR.

“Digital infrastructure, Internet of Things, cyber security, and education for talents are among the most attractive targets to foreign investors interested in smart city development. To attract investor interest, Hanoi should launch programmes, including business-to-business and mission trips, to promote these opportunities to international investors,” he added.

The interest from investors intensified in August, when the prime minister approved the master plan for Vietnam’s smart and sustainable city development strategy in the 2018-2025 period, with a vision towards 2030. According to the plan, Hanoi is one of the three Vietnamese cities to get a master plan on smart city development approved by 2020. By 2030, Hanoi, Ho Chi Minh City, Danang, and Can Tho are all set to become smart cities. Utilising the concrete strategies in the plan set forth by the government, investors are now confident in the development of future investment plans, with fewer fears of unpredictable changes, which have been an issue in the past.

To attract more financial resources for the smart city development plan, Hanoi has announced a list of potential foreign partners the city targets for investment. Japan, South Korea, Singapore, Taiwan, the US, the UK, and other EU countries are among the names.

It is easy to understand why Hanoi targets these foreign investors. Currently, they are Vietnam’s biggest foreign investors and have the strong expertise Hanoi is looking for to realise its plan. Japan has expertise in IT solutions, environment solutions, high-tech agriculture, and energy efficiency, while South Korea has advantages in electronics, energy, and heavy industry.

Singapore has strengths in real estate, education, healthcare, environment, and trade services. And investors from the US, the EU, and the UK have expertise in high-end services, financial services, healthcare, education, energy, and environmental protection.

What is more, Hanoi has also completed the urban zoning plans for the Northern Red River Area and economic sectors, with a list of prioritised investment projects set to be named. That is good news for foreign investors, as planning is very important for smart city development.