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The bitter sorrows of businessmen: Birth pangs
Businessmen recount endless problems coping with Government policies and administrative procedures when they try to set up a business. Some of the red tape can be called ‘harassment’.
“I do not have words to describe the tiredness and red tape I have experienced while seeking to get a license for our investment,” Hong Huong, the general director of Vinatex Mart, told a Tien Phong reporter at her newly leased office in Tan Binh district of HCM City.
In 2004, she said, Vinatex Mart began taking necessary steps to build a new 22 storey Vinatex Mart trade centre and supermarket at its premises on 300 Nguyen Tat Thanh Street in HCM City.
Two years ago, she hopefully discontinued the operation and dismounted the equipment of the old Vinatex Mart, cleared the site, preparing for the construction of the new building.
However, five years after she kicked off the project, Huong still has not got a construction license for the new building. Asked the reasons, Huong said the short answer is that ‘procedures are complicated.’ Then she took a deep breath and related examples.
Whenever government agencies checked the file of the project, she said, representatives of the concerned agencies were invited to discuss the issues of the project. Different representatives showed up at each meeting, and because they did not have a systematic understanding of the issues previously discussed, they could not give cogent opinions
At each meeting, if representatives from any of the agencies disagreed with some points of the project, or if someone gave some vague opinion like “I heard that there are disagreements about this case’, project consideration would be delayed for three to six months at least to wait for the aforementioned ‘disputes’ to be clarified.
Another traveller in the forest of red tape, the owner of an HCM City real estate firm, said “To build a new headquarters office has taken us over two years. Our file contains over 100 ‘van ban’” (official documents).
Lan Huong, who is the owner of another HCM City real estate company, told Tien Phong that though she presented all documents needed to get a building permit for an apartment block in District 2 three years ago, she is still waiting.
When Huong went to the HCM City Construction Department, she was told that her project still needed examination by the Planning and Investment Department. When she went to the Planning and Investment Department, she was told that the project was on the table at the Construction Department for the verification of its design
An official of the Construction Department confirmed that in principle under the current laws, it takes nine months to complete approvals for a project, but in practice it takes a full four years to have the things done. The current laws clearly stipulate how many days government agencies have to render a decision to investors, but in fact, very few offices give a timely answer.
At a meeting between the Ministry of Industry and Trade and foreign direct investors on April 8 in HCM City, Phan Thi Ngoc Linh, representing Fuluh Footwear Company Ltd, complained that delays in land allocation have caused great difficulties for the company.
The Long An Province’s People’s Committee agreed that Fuluh could build a factory on a 46 hectare land plot to make shoes for export. However, the company still has not gotten use of the land, even after three years of operation, delaying construction of the new factory. Fuluh’s plan was to install 14 production lines with a production capacity of 8.4 million pairs of shoes, and employ 7,000 workers. However, due to the aforesaid hitches, the company has just fulfilled one third of the project.
Going through the back doors?
Because businesses find it difficult to get permissions from government agencies through the front door, they have to ‘use the back doors’. That gives birth to a new service specialty, “brokerage.”
In the guise of an investor who wanted to register a new business line, a Tien Phong reporter went to the HCM City Planning and Investment Department.
As he arrived, a young man showed a name card introducing himself as a representative of KD Company, specializing in providing services relating to investment and construction licensing
The young man, Khang, said confidently: “Don’t worry a bit. We can get all the papers you need”.
“My company is undertaking a project to build offices for lease,” the reporter said. “Besides, I want to register the premises for massage and karaoke services. However, the building site is located in an area where local authorities only allow buildings of seven stories or less, and I want ten stories”
The young man dialed a number, trying to contact a person he called ‘Boss’. After a while, he said: “All those things, three more stories, karaoke and massage services, will cost you 200 to 300 million dong.” (300 million dong is about $16,500)
The slang term for people who perform such go-between services is ‘storks.’ While Khang was busy on the phone, a lot of other ‘storks’ spoke to the reporter. After 15 minutes, the reporter had in his hands 17 name cards and advertisements of people who introduced themselves as able to provide all the services relating to business registration.
VietNamNet, TP
(To be continued)
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