US firms’ high-profile standoff

Wonderful Theme Park project - illustration photo

A Department of Planning and Investment (DPI) source said authorities were struggling to come up with the funds for site clearance for the giant projects.

These include the $1.3 billion Wonderful Theme Park project developed by Good Choice Limited and Winvest Investment LLC’s $4.1 billion Saigon Atlantic.

The two are among the largest tourism projects in Vietnam and their four- and five-star hotels, convention centres, entertainment centres, shopping malls, restaurants and office space are expected to give big lift to Ba Ria-Vung Rau province’s tourism.

However, if the clearance cost issue is not sorted out soon, development of these projects could stall.

Ba Ria-Vung Tau cannot afford all the site clearance costs for projects in question and had tried to push the process forward by asking developers to advance some of the costs. In exchange, the developers would receive tax and land rental exemptions.

But, developers turned up their noses at the province’s offer.

“The costs are too large compared with the provincial budget. We will try to persuade developers to help us advance the costs. There is no other way to deal with this issue,” a provincial official said.

Under government regulations, local authorities must compensate residents for the reclamation of land and site clearance. However, most local authorities ask investors to clear site in advance. Investors then recoup the costs through tax and land rental exemption.

The DPI calculates site clearance costs at Saigon Atlantic project to be nearly $30 million. The people’s committee already spent $4.8 million while Winvest Investment advanced $4.73 million for site clearance.

But, the DPI source said the developer had refused to advance the outstanding cost of site clearance.

Winvest Investment LLC has received 100 hectares out of 300ha to date for this project, according to the DPI.

Meanwhile, land has yet to be handed over to Good Choice Limited. Site clearance costs for Wonderful Theme Park project are tipped to be $72.4 million.

In a different situation, Ba Ria-Vung Tau’s People’s Committee and Skybridge Dragon Sea Limited, the American investor behind the $902 million Skybridge Dragon Sea tourism project, last week reached an initial agreement whereby the latter would advance site clearance payment.  

However, the DPI source said a final agreement could only come after site clearance cost estimation was available.