Recent reports have revealed that multibillion dollar foreign direct investment projects are lagging behind schedule across the country.
In early July 2013, the management authorities of the northern province of Quang Ninh and the Dubai-based Limitless LLC inked a memorandum of understanding on implementing the $550 million Halong Star project, bringing hope that the project would resume after several years of delays.
The landmark 125 hectare project was licensed back in 2003. It broke ground in 2007 and it was envisaged that the 250-room five-star hotel and conference centre, 100-room luxury boutique hotel, more than 230 villas, and hundreds of townhouses and apartments for up to 4,000 residents would soon be completed.
The project was originally posed as a joint venture between Limitless, an arm of Dubai World, the Viet-My Ha Long Joint Stock Company and the International Property Investment Partners LLC.
The project had initial investment capital of $220 million, with its total registered capital then increased to $550 million in 2009, while International Property Investment Partners LLC transferred its minor stake to Vietnamese partner Sovico Holdings, a reputable domestic private investment group.
Quang Ninh Provincial People’s Committee deputy chairman Dang Huy Hau had attributed the slow pace of the project to the impact of the economic slowdown and capital restructuring among the project’s partners.
Another project in Quang Ninh province on the development of Dan Tien port and Phuong Hoang urban area by Dan Tien Port Development Company Limited- a joint venture between Quang Ninh Coastal Company Limited and Hong Kong’s Good Wishes Investment- has also stagnated.
The project received its investment certificate in 2007. In early 2012 there was a rumour that the Quang Ninh Coastal Company Limited was looking to exit the project.
The provincial authorities then compelled Good Wishes Investment to increase the pace of construction, with a 2013 deadline set. However, little progress was reported and the disputes over the land for the construction of the Phuong Hoang urban area have plagued the development.
Another example involves 167-Vietnam Joint Venture Company Limited’s building of a mixed-use complex consisting of a golf course, five-star hotel and a luxury resort in provincial Van Don district.
The project, though receiving its investment certificate in 2007, still remains on the drawing board due to land acquisition woes.
In the northern port city of Haiphong, major FDI projects at a standstill include Haiphong International Container Terminal, Union Success Vietnam, Do Son Industrial Park (IP) and Tham Viet Investment Complex projects.
The Do Son IP project, albeit having secured an investment certificate in 2007 and having a completion deadline extended to end of 2010, has only completed less than 50 per cent its area and suffers a poor occupancy rate of just 32.7 per cent.
Its disbursed legal capital totals a meagre $8.02 million against a promised $25 million.
The Tham Viet Investment Complex suffers a similar situation, but the project has almost completed site clearance.
The Chinese developer had injected 57 per cent of the project’s chartered capital, tantamount to $22.8 million which covered a mere 13 per cent of the project’s total investment costs.
“Not a single company has chosen to invest in the site yet. We urged the developer to accelerate the pace of construction in order to encourage secondary investors and prioritise eco-friendly and hi-tech projects when attracting investors,” said deputy chairman of Haiphong People’s Committee Dan Duc Hiep.
The southern province of Dong Nai’s IP Authority also revealed that a relatively high number of FDI projects were progressing too slowly.
For instance, the Sun Steel project, licensed in 1996 and costing $200 million, still remains on paper and its schedule has continuously changed.
“Dong Nai IP Authority will work with the developer to confirm whether this project will actually go ahead,” said the authority’s deputy chairman Nguyen Phuong Lan.
An Amata Power Company Limited project, also in the province, is in the same situation. The project, licensed in 1996 with $110 million in total committed capital, was originally intended to provide power to Dong Nai IP.
Due to lack of materials for power production, Amata Power could only purchase power from Electricity of Vietnam and has disbursed just 10 per cent of its total committed capital.
Amata Power along with other firms will meet the Dong Nai IP Authority about their problems in the near future.
By Duc Son