Giants cut down to size

Winvest Investment Vietnam Company’s $4.1 billion Saigon Atlantic Hotel project

A source from the provincial Department of Planning and Investment’s Economic Development and Investment Division said Winvest Investment Vietnam Company’s $4.1 billion Saigon Atlantic Hotel project, Good Choice company’s $1.3 billion World Theme Park project and Skybridge Dragon Sea company’s $902 million Dragon Sea resort project were up in the air due to site problems.

“Site clearance for these projects is too slow and complicated,” the source said.

Licensed in 2006, the Saigon Atlantis Hotel project, a multifunction recreation centre tourism project using 307 hectares on the mainland and 610ha near the sea, has only received 100ha.

“The slowness is partly due to people’s refusal to relocate. However it is largely due to changes in the government’s land policies which have pushed project costs up,” the source said, referring to Decree 69/2009/ND-CP, effective from October 1, 2009.

Under the decree, which provides additional regulations on land use zoning, land price, land recovery, compensation and resettlement, authorities or enterprises using farm land must compensate farmers 1.5-5 times higher than previous years.

The total site clearance cost for this project is estimated to be over VND600 billion ($30 million), while the local budget could offer only about one-sixth of that. The provincial authorities were still working with the investors to ask them to pay the compensation cost in advance. They will then be refunded in kind of tax reduction after the project becomes operational.

The source said that site clearance work for the other two projects had yet to begin.

Licenced in 2009, the 155ha World Theme Park includes high-end hotels, exhibition and conventional centres, a modern entertainment area, a water palace and a cluster of Viet miniature landscapes.

Meanwhile, Dragon Sea, licenced in February last year, is a 45ha mixed-use seaside cosmopolitan resort encompassing 15 high-rise towers, a convention centre and areas for retail and entertainment, amphitheater, high-end hotels, apartments and villas.

“In order to make site clearance and boost the construction of these three projects, I think that local authorities must closely collaborate. Some different opinions remain [about these projects],” the source said.

According to the source, like the Saigon Atlantic Hotel project, the province was now encouraging investors to pay compensation funds in advance and be refunded in  tax reduction later.

The source said the investors had yet to think about quitting these three projects. “They have a long-term view on doing business here. Their confidence is high,” the source said.