Berjaya HCMC projects continue their long delay

May 05, 2014 | 14:14
Two projects by Malaysia’s Berjaya Land, a wholly-owned subsidiary of Berjaya Leisure (Caymans) Ltd., have seen zero progress after being granted investment certificates many years ago.

>> Berjaya takes backward step
>> Berjaya committed despite question marks
>> Berjaya Vietnam gets stern ultimatum

The two projects – Vietnam International University Township and Vietnam Financial Centre – are both located in Ho Chi Minh City.

Vietnam International University Township (VIUT)’s building site is located in the southern hub’s Hoc Mon district and has the registered investment capital of $3.5 billion.

Licensed in 2008 and scheduled for completion in stages from 2011 to 2021, the projects has seen no progress as of yet.

On a trip to the site, VIR reporters found a decaying construction area interspersed with houses that, according to local people, “cannot be improved or repaired because of the project.”

VIR also found that in 2010, local authorities sent out a crew to determine the status of the site and report on still existing houses and environment, but since then no more action has been taken.

Nguyen Huu Hung, Chairman of the Hoc Mon District People’s Committee said he had no additional information on the project, as it was managed directly by the city’s People’s Committee.

Hung admitted that delayed projects, like Berjaya’s, had very negative impacts on local people and were hurting the committee’s economic and social development strategy.

Berjaya is similarly lagging on its $930 million Vietnam Financial Centre (VFC) in Ho Chi Minh City - large scale financial centre as the developer promised.

The complex is located on a highly sought-after piece of property in the city centre that is currently operated by a smattering of businesses from car parking to tennis courts and motels, rather than the monolithic skyscraper and surrounding facilities the company proposed.

Delayed large-scale real estate projects feature prominently throughout the country, not just in Ho Chi Minh City, says economist Dr Dinh The Hien.

“I am not surprised that many of those projects are from the real estate sector, he said.

He analysed that in many projects, developers find ways to re-sell their projects to other sub-investors after they finished administrative procedures.

Hien added that those projects were not in any way contributing to the state budget and causing instability in the market.

Nguyen Hoai Nam, general director of Berjaya Vietnam, responsible for the company’s projects in the country, said the main reason for slow progress was the floundering real estate market.

“This prolonged downturn not only exceeded Berjaya’s fears, but those of many other companies and investors as well,” Nam said.

Nam explained that for VIUT Berjaya has asked permission from the Ho Chi Minh City People’s Committee to divide the project into smaller phases, in which an area of 200 hectares would be firstly developed, out from the total of 900.

Nam said the reduction was more commensurate with current market demand, which is focused on affordable housing.

For VFC he said the delays were procedural. But that they also planned to scale down this project into phases with the main tower to be constructed first. Nam noted that the financial resources for both projects were on track.

“We have successfully finished the financing for both projects and will make the details public very soon,” he said.

Representatives from the Ho Chi Minh City Department of Planning and Investment, however, were not available to comment on the issue.

Berjaya is the owner of a range of projects nationwide, including the Sheraton and InterContinental hotels in Hanoi, Long Beach resort on Phu Quoc Island and the $500 million Hanoi Garden City residential area in Hanoi’s Long Bien district. 

By By Hong Son

What the stars mean:

★ Poor ★ ★ Promising ★★★ Good ★★★★ Very good ★★★★★ Exceptional