Delayed projects lose licence rights

The Nhon Hoi Economic Zone Management Authority last week revoked Bus Industrial Centre’s investment certificate. The 50-hectare project, which was licensed in March 2013, was designed to produce agricultural tools, auto parts, buses, and cars, with 70 per cent of its products intended for export. Local optimism regarding the 3,000-5,000 jobs due to be created gave way to bitter disappointment as construction on the project had still not begun three years after its approval.

“The management authority urged the investor to implement the project. However, the investor said that they had failed to arrange the investment capital,” Nguyen Ngoc Toan, deputy director of the Nhon Hoi Economic Zone Management Authority, told VIR. “We always welcome and provide preferential conditions for investors but we must revoke long-delayed projects in order to create opportunities for other potential investors.”

Aside from the billion-dollar bus complex, other mega projects have also come under scrutiny recently. These include First Solar’s $1 billion photovoltaic panel manufacturing facility in Ho Chi Minh City and the $4.5-billion Guang Lian steel project in the central province of Quang Ngai. Both projects have failed to make any progress over several years, and so seem likely to be axed entirely.

The fate of the Guang Lian steel project, which was licensed in 2006, is still up in the air following the announcement by Taiwanese investor E-United Group that it would withdraw from Guang Lian in July 2015. Although one of Vietnam’s leading private steel makers Hoa Sen Group has shown an interest in carrying on the project as E-United Group’s replacement, approval has yet to be granted.

The project received a small ray of hope in the early days of April as the Taiwanese investor met with the local authorities to discuss reinvesting, as it has already poured significant capital into site clearance. However, detailed information about the capital arrangement plan has not been disclosed as yet.

Similarly, the US-based First Solar photovoltaic panel manufacturing facility in Ho Chi Minh City seems unlikely to ever reach fruition.

Licensed in 2011, First Solar’s plant was to be developed over two phases. However, eight months after breaking ground, the investor called a halt to construction work due to an imbalance in the global demand and supply of solar power panels. In 2014, the company was reported to have finished all legal procedures in selling its assets in Vietnam. Although two ownership transferral options have been proposed, with the first being a capital transfer to a partner, and the second being an asset transfer (sale of the facility as is), no decision has been made yet, according to Bui Thi Nu, a senior official of the Ho Chi Minh City Industrial and Export Processing Zones Management Authority.

Despite struggling with its own project in Ho Chi Minh City, last year First Solar signed a Memorandum of Understanding with Vietnam’s Thien Tan to provide solar panels to the group’s $41.2 million/19.2 megawatt solar power plant in the central province of Quang Ngai, the first of its kind in Vietnam. Construction started in August 2015, and the facility is expected to be plugged into the national grid later this year.

Between 2006 and 2015, Vietnam licensed 26 foreign-invested projects with the registered investment capital exceeding $1 billion each. These projects – worth nearly $76.5 billion in terms of registered capital – made up a major slice of Vietnam’s total registered foreign direct investment sum of nearly $281.9 billion by the end of last year.

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