Lazy projects get the axe

Foreign direct investment projects failing to come up to scratch are being shown the exit door.

Ba Ria-Vung Tau People’s Committee, which governs one of the country’s biggest foreign direct investment (FDI) localities, has underscored the new trend by revoking the investment licence of 100 per cent Korean-owned AJ VietStar Construction and Development Limited Company’s $200 million AJ Vietstar project. The project was licenced in January, 2009 to be located on the province’s gateway Highway No 51.

 Le Kim Huong, director of the province’s Department of Investment and Planning (DPI), said: “The decision was made upon the developer’s withdrawn proposal due to financial difficulties.”

The DPI also put an end to five other FDI projects with total investment capital of $19.2 million over the last eight months. The revoked projects were under the registration of Ajung Technology and Construction Limited Company ($300,000), V-Can Limited Company ($500,000), Con Dao Pearl Limited Company ($500,000), Imac Vietnam Limited Company ($15.7 million) and Maxco Limited Company ($2.2 million).

“We are also working on a series of other ailing projects, which are likely to stop,” Huong said.

In the first seven months of 2010, registered FDI in Ba Ria-Vung Tau increased 35 per cent against the province’s whole-year target with 27 newly-registered projects worth $2.3 billion. FDI disbursement stood at $620 million or some 57 per cent of the whole-year target. The disbursed capital was mainly seen at large-scale projects such as PSP-PSA International, Cai Mep International, Saigon-Vietnam International and Tan Cang-Cai Mep ports.

Ba Ria- Vung Tau’s aggregate disbursed FDI is $5 billion, equivalent to 18.5 per cent of its total registered capital of $27.1 billion.

Huong said: “Most of registered projects in 2008, 2009 and 2010 are still in a preparation process. This is the main reason for the province’s poor FDI disbursement with Saigon Atlantis Hotel, Dragon Sea International Exhibition Centre, Southern Petrochemistry Complex, China Steel, Posco SS-Vina Steel, Toc Tien New urban area and Cai Mep-Gemadept Port as examples.”

Meanwhile, Ho Chi Minh City is also getting tough with indolent projects under the city’s Export Processing and Industrial Zone Authority (Hepza).

In late July, Hepza sent warnings to projects developed by Scissors Vietnam Limited Company, CP-Chemquest Joint Stock Company, Kingvic International Limited Company, Asia Poly TecLimited Company, Southern Saigon Cement Joint Stock Company, Dai Thang Limited Company, A Chau-Phuc Tuong Motorbike Supply Industry Limited Company and Kao Chi Development Limited Company. Seven of the projects are FDI-sourced and have seen little progress since being licenced during 1996 to 2003.

Hepza deputy chairman Nguyen Tan Phuoc said that the investment licences of all the projects would be revoked if developers failed to contact Hepza for timeline extensions within 30 days of the announcement. The projects have the total investment capital of $23.62 million and cover nearly 8 hectares.

“Hepza is also working on 90 projects to better assist their developers. We [Hepza] have revoked licences of 182 projects worth $454 million so far. Of these, 95 were FDI projects worth $357 million,” said Phuoc.

“We now have to better evaluate developers’ financial capabilities before granting them investment licences,” he added.