Authorities crack down on delayed FDI projects

Vietnamese local authorities are purging moribund foreign-invested projects

The Bac Ninh Provincial People’s Committee has annulled the investment certificates of five projects. They are Viet Han Electronics Company, Shining Vietnam, Ocular Vietnam Technologies, Blue Ocean Tech Vietnam and Baxter.

The investment certificates were withdrawn due to consistent and prolonged delays in the projects or the ceasing of operations. For example, Blue Ocean Tech Vietnam ceased its production and business at its registered head office in November 2012, while Baxter stopped operating in June 2012.

Other cities and provinces are also bolstering efforts to scrutinise deadlocked foreign invested projects. The Binh Dinh Provincial People’s Committee in a written document last week also warned of the possibility of taking back the Vinh Hoi resort project developed by the US-backed Viet My Hotel and Tourism Company.

Licensed back in 2007 with $250 million in the total committed investment capital for the first phase, the project is expected to cover 235 hectares in the central province’s Nhon Hoi Economic Zone. The project, which envisaged building a premier resort, consisted of an international convention centre, a five-star hotel, an 18-hole golf course, and high-end villas.

The project’s developer intended to begin construction from mid-2011, and put the whole complex into operation around mid-2014.

Man Ngoc Ly, head of the Binh Dinh Provincial Economic Zone Management Authority, said that “Taking back a project isn’t that easy as it relates to investment procedures. The Vinh Hoi resort developer has built a bypass and worked on part of site clearance at the project.”

“Its fate is pending the provincial management’s decision. We need to make a careful calculation of Viet My’s disbursed investment capital in the project to decide if the project was taken back or not,” Ly added.

Binh Dinh also houses a $1 billion bus assembly and spare parts production complex invested in by Russia-based Buscenter Met Company, which was licensed in early 2013.

Late last year, the provincial management considered withdrawing the project’s investment certificate due to long delays, but the project developer has pledged to transfer capital into Vietnam for project implementation. However, since then no progress has been recorded.

Similarly, the central province of Ninh Thuan is reportedly considering taking measures to cancel the VND528 billion ($25 million) 407ha Du Long Industrial Park (IP). This project, despite having kicked off construction back in 2008, still remains unfinished.

Late last month, Ninh Thuan cancelled the $450 million Mui Dinh resort project because the US-based Cedar Point International had neither paid the deposit nor had it taken any action to begin work.