Delayed projects on the chopping block

Vietnam Financial Centre project

Two projects by Malaysia’s Berjaya Land, a wholly-owned subsidiary of Berjaya Leisure (Caymans) Ltd., have seen no progress after being granted investment certificates many years ago.

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

VIUT’s building site is located in the southern hub’s Hoc Mon district and has a registered capital of $3.5 billion.

Licensed in 2008 and scheduled to be completed in phases between 2011 and 2021, the project has yet to move forward at all.

Also lagging behind is the $930 million VFC project.

Nguyen Huu Hung, chairman of Hoc Mon district’s People’s Committee said that delayed projects like Berjaya’s were having a very negative impact on local people and hurting the committee’s economic and social development strategy.

Not only foreign investors, but also local projects are also showing poor progress.

Despite breaking ground in late 2007, Saigon Sunbay, Vietnam’s largest seaside eco-town project to date in Ho Chi Minh City’s Can Gio district, has seen poor progress, resulting in suspicions and concerns from residents on the project site.

After seven years, the only completed features of the project are a wall surrounding the site built by former contractor Dai Phu Gia-Anjeong consortium and a stone jetty lining 100 hectares of beach by local and current contractor Lung Lo-Sao Mai consortium.

Economists have suggested taking back investment certificates from delayed projects in a bid to spur progress.

Late last year in the southern province of Dong Nai, local authorities proposed revoking another project by Berjaya, priced at $2 billion, also due to long delays.

More recently, the province’s Deputy Chairwoman Phan Thi My Thanh urged strong measures be taken against suspended projects, particularly at industrial zones (IZs) to create a healthier business environment.

In central Danang city, the IZ Authority recently asked the city’s management to abort (entirely or partly on a case-by-case basis) 18 delayed projects. Many of them, reported authority head Thai Ba Canh, were granted certificates in 2007-2008 but have since been at a standstill.

South-central province of Khanh Hoa recently approved the cancellation of 15 projects due to delays and also lack of goodwill from the investor in co-operating with local authorities.

In the southern province of Ba Ria-Vung Tau, two foreign invested projects – Bina Puri Limited and Thien Thanh Limited – together valued at $1.3 million had their certificates revoked earlier this year.

Also in 2014, seven domestic projects valued at VND1.5 trillion ($71.6 million) met the same fate.

According to a Ministry of Planning and Investment report, last year just industrial zones and economic zones saw 86 FDI projects cancelled, altogether capitalised at $828 million. Another 174 domestic projects were shut down, valued at VND57 trillion ($2.7 billion).

Under government instructions, localities across the country are continuing to review delayed investment projects, particularly at IZs and EZs and therefore the list of projects to be revoked would continue to grow. This is aimed at creating a more transparent and impartial investment climate and to offer opportunities to investors who truly deserve the chance.