The billion-dollar nascent projects of Nghe An

Kobe Steel is one of the immobile billion-dollar projects in Nghe An

Immobile billion-dollar projects

Kobe Steel Co., Ltd.’s project to build a direct reduced iron factory with the capacity of two million tonnes of products per year and a total of $1 billion of registered investment in Quynh Lap commune (Southeast Nghe An Economic Zone) was kicked off in 2010 but has not completed clearance compensation yet.

Ho Ngoc Bao, deputy head of the Southeast Nghe An Economic Zone Management Board, stated that the project has not been deployed and the investor’s representatives were absent and did not cooperate with the inspection team, failing to report on the implementation as stipulated by the documents provided by the inspection team.

“The project has been delayed for eight years. Due to the project’s large scale, the Southeast Nghe An Economic Zone Management Board will send a proposal to the People’s Committee to find a solution,” said Bao.

The second large-scale project is the Quynh Lap 1 thermal power station (Quynh Lap commune, Hoang Mai town), invested by Vietnam National Coal And Mineral Industries Holding Corporation Limited (TKV) with the total registered investment estimated at $2.2 billion with an area of 150ha. According to the plan, the station will begin to generate electricity in 2020 and annually provide about 6.6 billion KWh to the national electricity grid. However, until now the area remains vacant, with even the project poster peeling off the billboard.

Nguyen Minh Bay, a Quynh Lap citizen, gave voice to his frustration by saying: “The projects had ostentatious beginnings, promising to give jobs to local citizens, but it has been ten years without any progress.”

According to Le Ba Van, chairman of the People's Committee of Quynh Lap Commune, the project badly effected locals’ lives, as nearly 1,000 people live in the area planned for the project. In addition, three resettlement areas are still unfinished and messy.

The Management Board of Southeast Nghe An Economic Zone also said that in this economic zone, many large-scale projects started years ago but have not been finished yet.

Delayed land clearance

After eight years of construction, Nam Dan Plaza remains a deserted plot. The investor is OceanBank Commerce Joint Stock (OceanBank), who received the investment licence on October 10, 2010. The licence was first amended on October 10, 2014. The investor carried out construction works without a construction permit or having been allocated land.

This prompted the Nam Dan People's Committee repeatedly requested the Nghe An People's Committee to revoke the project, but time and again the owner requested an extension, therefore, the “golden land” in the centre of this district has been left undeveloped.

Vo Duy Viet, director of the Nghe An Department of Natural Resources and Environment, told VIR that it has been eight years since the project began, but the Nghe An People’s Committee has not allocated land for Nam Dan Plaza.

Three floors of Nam Dan Plaza have been built without a construction permit to be then abandoned for eight years, frustrating the officials and residents in the district.

Under the orders of the chairman of the Nghe An People's Committee, in early June this year, the Southeast Nghe An Economic Zone Management Board has set up an interdisciplinary inspection to handle 17 stagnant projects in the area which were granted an investment certificate after 2007. Although the inspection results had to be reported to the People's Committee before August 30, the inspection team has not received opinions from departments and agencies to submit to the People's Committee to terminate (or revoke) these projects.

According to the Nghe An Department of Planning and Investment, 80 per cent of the projects were delayed due to land clearance. Nguyen Van Do, director of the Department of Planning and Investment said that the reasons include unreliable mechanisms and policies on land clearance and compensation, the contents of which do not match reality and are ambiguous, making application difficult. As policies change rapidly, there is always a measure of uncertainty and unwillingness to process compensation procedures.

“In addition, market fluctuations also make investors review their investment and trade strategies to better suit reality, with many moving on to other projects without finishing the one they started,” said Do.

In order to limit delays, in 2018 the Nghe An People's Committee set up an interdisciplinary team to inspect 72 projects in the province. The inspection team is following the approved plan, as 21 projects of the first phase have been inspected by the Department of Planning and Investment and 32 projects of the second phase have been inspected by the Department of Natural Resources and Environment and 17 projects in the Southeast Economic Zone and industrial zones.