The New Coastal Proposal: Expanding Danang’s Horizons with a 300-Hectare Seafront Free Trade Zone

Proposal to Reclaim 300 Ha of Seafront for a Special Trade Zone in Danang

Chairman of Danang People’s Committee Le Trung Chinh has signed a proposal to be submitted to the Ministry of Planning and Investment for appraisal before seeking approval from the Prime Minister. The proposal concerns the establishment of a Special Trade Zone in the city.

According to the Danang People’s Committee, the proposed Special Trade Zone will encompass an area of over 2,317 hectares in its final stage, including approximately 300 hectares of reclaimed seafront.

The Special Trade Zone will be strategically located across 10 non-adjacent sites, linking the Lien Chieu Port and Danang International Airport. It will comprise four main functional areas as outlined in Resolution No. 136 of 2024 by the National Assembly.

Regarding the proposed seafront reclamation and the Lien Chieu Port area, the Danang People’s Committee is conducting a comprehensive study to determine the direction and investment roadmap for infrastructure development and appropriate operations, ensuring that all conditions are met before commencement.

The Special Trade Zone in Danang is envisioned to be Vietnam’s first integrated model, combining logistics for seaport and airport operations with commercial, service, and export processing activities.

The Danang authorities anticipate that the Special Trade Zone will contribute 8-9% to the city’s gross regional domestic product (GRDP) by 2030 and up to 25% by 2050. It is also expected to attract approximately 41,000 workers by 2030 and 137,000 by 2050.

An estimated investment of VND 40,300 billion is required for the Special Trade Zone

The investment roadmap for the Danang Special Trade Zone is planned in two phases. The total estimated investment for both phases is approximately VND 40,300 billion.

Phase 1, from approval to 2029, will involve the construction of a new Lien Chieu wharf and logistics areas capable of accommodating vessels of 100,000 tons or larger. It will also include land clearance for all sites and the selection of strategic investors for infrastructure development in the functional areas.

The investment estimate for this phase is nearly VND 36,000 billion, including land clearance costs of over VND 20,700 billion (58% of the total investment) and infrastructure development costs of over VND 15,100 billion (42% of the total investment).

Phase 2, starting after 2029, will focus on expanding the Special Trade Zone to include the Tien Sa Port area (at the foot of the Son Tra Peninsula, after its conversion into a tourist port), urban redevelopment at the downtown railway station, and more. The estimated cost for this phase is over VND 4,300 billion, sourced from non-state budget funds.

In terms of capital mobilization, Danang proposes that the state will allocate and balance the budget for infrastructure development projects up to the boundary of the Special Trade Zone, with responsibility for land clearance or lease payment deductions if the strategic investor undertakes land clearance and infrastructure development.

The strategic investor will be responsible for developing internal infrastructure within the Special Trade Zone, including roads, water supply and drainage systems, electricity, and other shared facilities.

The Danang Special Trade Zone is the first of its kind in Vietnam, integrating seaport and airport logistics with commercial, service, export processing, and auxiliary functions. It will operate under a complex, multi-functional model with a “zone-within-a-zone” interconnection mechanism.

Previously, on June 26, the National Assembly passed a resolution on urban governance and piloting several special mechanisms for the development of Danang, effective from January 1, 2025. The resolution includes the establishment of a Special Trade Zone linked to the Lien Chieu Port, along with piloting mechanisms and policies to attract high-quality investment, finance, trade, tourism, and services.

As per the directive, the Danang People’s Committee is tasked with completing the proposal and dossier for the establishment of the Special Trade Zone by December 2024. It will then be submitted to the Ministry of Planning and Investment for appraisal before being presented to the Prime Minister for a decision in early 2025.