Thu Thiem dream’s rude awakening

The planned $1.2 billion Thu Thiem software park in Ho Chi Minh City faces having its licence revoked next year because of continuing delays.

The project, a joint venture between local firm SaigonTel and Singapore’s TA Associates International - an affiliate of Taiwan’s Teco Group, has been on hold for nearly three years. SaigonTel holds a 20 per cent stake and has no involvement in the project’s execution. Meanwhile, TA Associates International closed its office in Vietnam on July 5 last year and will only receive dossiers at its Taiwanese headquarters.

“The foreign partner is still dealing directly with the authorities on this project and local partner has no rights to update the status quo of the project,” said Dang Thanh Tam, chairman of SaigonTel.

The company early this year suggested it cut the original project size, land and committed investment capital all by two-thirds.

Ho Chi Minh City People’s Committee in March gave two options for the developers. The first option is that Teco maintains the original project scale, and they are allowed to pay in advance 60 per cent of the land rental while the remainer can be paid within the following three years. The second option is the committee accepts the adjustment proposal, but Teco would be allocated another land site.

Nguyen Le Dung, deputy director of Thu Thiem Urban Zone Steering Committee, said Teco had not responded to the authority’s proposal or paid any rent since it received the investment licence in June 1, 2008.

 The project is located in District 2’s Thu Thiem new urban area. The first stage was scheduled for completion in 2011 and the 15.9 hectare software park would be finished by 2016. Some 75 per cent of the park would cater for hi-tech and software firms, 15 per cent for trade centres and the remainder for housing.

The project broke ground in July, 2008 and the developers hoped to create 25,000 jobs in 2011 and 70,000 by 2016. The annual software export revenue was forecast at around $6 billion.

An estimated 1,200 companies would base themselves in the centre contributing around $4.3 billion in taxes to Vietnam. The investors also expected that 80 per cent of their labour need would be met thanks to company training networks and cooperation with local training bases, Teco and recruiting companies.

Meanwhile, its software park neighbour, the $610.3 million wholly Japan-owned Vietnam-Japan Human Resource Development Joint Stock Co, accepted new allocated land and is completing project development.