Khanh Hoa scythes stalled projects

Provincial authorities have lost patience with slow investors that appear to have deliberately dragged their feet on projects  
Photo: Le Toan

Le Dung, head of the Investment Co-operation Office under the Khanh Hoa Provincial Department of Planning and Investment told VIR last week that the province checked a series of delayed tourism projects in the Bai Dai beach area at the end of last year. Eight investment certificates have already been withdrawn, including one foreign invested project - the $80 million Swiss Attixs,  and the province would continue checking nearly 30 delayed tourism projects worth VND19.3 trillion ($900 million) including two large scale foreign invested projects this year.

The first foreign invested project is the five-star Manna Luxury Holiday Resort, which is a joint venture between Israel’s Rafaeli Group and a domestic developer, Golden Beach. The developers received an investment certificate in July 2010 to develop the resort with the total investment capital of VND355 billion ($17 million). But they have so far failed to meet any of their commitments. 

Similarly, the five-star Mirax Cam Ranh Resort, a VND2.1 trillion ($100 million) joint venture in which Russia’s Gerrad Investors Holdings Limited has a 70 per cent stake, has failed to begin construction having become embroiled in a land clearing compensation dispute with local residents. The project was granted an investment certificate in August 2008, and scheduled to be completed by 2011, but it has yet to break ground.

Klim Akhmetkereev, technology director of Mirax Cam Ranh Resort told the local media that the project had not yet started due to slow process in land clearance and compensation for local residents, and because the Northern Cam Ranh Peninsula Tourist Area had still not installed a waste water processing system.

However Dung claimed the key problem was that the developers lacked the finances to conclude the project. If these projects were to materialise, many predict the beach front to become Cam Ranh city’s most attractive tourism destination, capable of making a remarkable contribution to the local economy.

 Services and tourism industries presently account for more than 45.6 per cent of the province’s economy, according to figures from the Khanh Hoa Provincial Department of Planning and Investment.

According to the Khanh Hoa Provincial People’s Committee,  the prevalence of delayed projects was because developers lacked the financial ability to complete them or were land speculation investments, rather than the result of the slow process of land clearance by provincial authorities.

In an aim to reduce the number of delayed and stalled projects to an absolute minimum, this year the province will demand developers pay a deposit of VND100 billion ($4.7 million) as a guarantee of their commitment to completing their projects.