SBIC investment certificate for South Cam Ranh IZ to be revoked?

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Khanh Hoa’s relentless pleas to revoke

According to a source of VIR, the Ministry of Planning and Investment (MPI) recently submitted to the Government Office document No.3541/BKHDT-QLKKT about revoking SBIC’s investment certificate for infrastructure construction in South Cam Ranh Industrial Zone.

In particular, MPI agreed to the Khanh Hoa People’s Committee’s earlier proposal, and requested the prime minister (PM) to allow the Van Phong Economic Zone Management Board, under the directions of Khanh Hoa, to revoke the project’s investment certificate based on investment and investment-related regulations.

“The arising problems (if any) will be solved by the Khanh Hoa People’s Committee through cooperation with the Ministry of Transport (MoT) and SBIC,” the official letter stated.

In addition, in March 2017, PM Nguyen Xuan Phuc agreed in principle on revoking the project’s licence and assigned MPI to team up with MoT to implement the associated tasks.

Since 2011, the Khanh Hoa People’s Committee has four times proposed the PM to revoke the investment certificate of Nha Trang Shipbuilding Co., Ltd. (a subsidiary of SBIC), the firm responsible for the project in South Cam Ranh Industrial Zone, and to find another developer with sufficient experience and financial capacity.

In 2009, the 203-hectare land lying beside Cam Ranh Bay was assigned to Vinashin (restructured and renamed as SBIC in 2013) to construct infrastructure for a mixed industrial zone designed to house projects in the shipbuilding and ship repair industry, machinery, and the electrical and electronic assembly industry. However, the project has been left in stasis till now.

The Khanh Hoa People’s Committee said that SBIC has stopped financing the South Cam Ranh project due to financial difficulties. Up till now, the developer has not undertaken investment procedures to carry out the project according to the timeline stipulated in the investment certificate.

In accordance with the agreement between Vinashin and Khanh Hoa Province, the project should have been constructed by 2011. South Cam Ranh Industrial Zone was planned to welcome investors and be put into operation by the end of 2011.

Opportunities for new developers

SBIC is well aware of the advantages lying in holding this land plot and has been reluctant to give up the project. At the end of July 2016, SBIC proposed the MoT to request the government and the Khanh Hoa People’s Committee not to revoke its license, so that it can negotiate with HC Global Investment and Technology Joint Stock Company (HCG) to implement a solar power complex in place of the IZ.

As HCG introduced claimed, it is headquartered in Hanoi and is specialised in supplying solar power solutions in Vietnam and some other countries. This enterprise has provided over 1,000 solar power systems of varying capacity for many solar power plants in Vietnam, Cambodia, Mozambique, and Tanzania, among others.

On February 23, 2017, in Document No. 1785/BGTVT-QLDA the MoT also proposed to change the target and scale of the South Cam Ranh project and turn it into a solar power complex. This adjustment aims to facilitate SBIC’s restructuring.

Nevertheless, the proposal was declined by the MPI. By quoting Vinashin’s restructuring plan, which was approved by the PM in 2010, the MPI pointed out that SBIC should focus on its core businesses.

“SBIC’s proposal of building a solar power plant complex in South Cam Ranh is not suitable with its restructuring orientations,” the MPI representative said.

Besides, according to some of Khanh Hoa’s leaders, since receiving the investment certificate, SBIC has left this project abandoned.

“The extremely long delay in implementing this project has violated the Law on Investment and the Law on Land and restricts the development of the whole Cam Ranh area in general,” a provincial leader said.

In case the PM agrees to revoke the investment certificate, the MPI will propose the Khanh Hoa People’s Committee to invest in the infrastructure of South Cam Ranh Industrial Zone as specified in the approved plan. At the same time, provincial authorities should focus on luring in firms with enough experience and capacity to take over this project.