Vietnam’s smart city projects attract foreign investors’ attention

As the Asian-Oceanian Computing Industry Organization (ASOCIO) Smart City Forum 2018 took place in Hanoi last week, Vietnam announced its grand ambition to develop smart cities, which are likely to be supported by various private and public entities from other countries.

There were hundreds of businesses attending the event. The attendance of 500 representatives from the 10-plus member nations testify the broad appeal of smart solutions, ASOCIO said.

In order to attract foreign investors, Hanoi is stepping up effort to carry out administrative reform, personnel training and environmental protection, said Nguyen Duc Chung, chairman of the Hanoi People's Committee. In a meeting with the European Chamber of Commerce, Chung promised preferential policies to European investors who are interested in the region’s smart city projects, according to local media.

Hanoi will first focus on energy management, water resources and transportation related projects. The city has set the goal to have 100% clean water by 2020 and the city will serve as a role model for other smart city implementations in Vietnam, Chung stressed.

Areas of investment focus will include transportation, security, healthcare, energy and housing development. “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,” David Wong, chairman of the ASOCIO, told Vietnam Investment Review.

Ho Chi Minh City shows ambition

Ho Chi Minh City, the population of which and Hanoi make up 30 percent of the total urban population in Vietnam, also wants to become a smart city. Ho Chi Minh City has traffic congestion and pollution problems and the government is seeking partners to build infrastructure to overcome the challenges. The city government recently talked with the Asian Infrastructure Investment Bank (AIIB) regarding various financing means to facilitate urban construction.

AIIB, which has had a track record of financing infrastructure projects in various Asian countries since 2016, is considering water resources, energy and sustainable city development projects in Vietnam, which are expected to be launched between 2018 and 2019.

Finland has also expressed interest in Ho Chi Minh City’s projects. Kari Kahiluoto, Finnish Ambassador to Vietnam, said IT, big data, intelligence centers, web management and e-government appeal to investors the most. “We are involved from the beginning to the end,” he told VietNamNet Bridge, in networks, application and internet security.

According to Kahiluoto, bureaucratic market and unclear regulator systems are the investment hurdles in Vietnam, and the government may set up more investment-friendly policies to attract investors.

Mekong region on track of development

Japan is likely to play a key role in the infrastructure development in Southeast Asia. The country has pledged foreign aid for the ‘Southern Corridor’ to connect Ho Chi Minh City, Phnom Penh and Bangkok, as well as the ‘East-West Corridor’ to connect Danang in Vietnam to Mawlamyine in Myanmar. This is part of Japanese Prime Minister Shinzo Abe’s policy to construct highways and bridges and facilitate trades in the Mekong region.

Japanese conglomerate Hitachi is also preparing to take part in infrastructure projects in Medong Delta as countries in the region embark on their smart city endeavors. In an interview with Bloomberg, Hitachi’s Asia and India chairman Kojin Nakakita pointed out that information technology and artificial intelligence are among the areas that Hitachi will focus on developing in Southeast Asia.