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KBC replaces Korea’s IGS in major property project
Authorities of the northern province of Bac Ninh have given approval to Kinh Bac City Development Shareholding Corporation (KBC) to replace South Korea’s IGS Capital Group to develop an industrial and residential complex in the province.
KBC under Saigon Invest Group will replace the foreign investor in developing the Nam Son-Hap Linh Industrial and Residential Complex.
The provincial government has officially terminated IGS as developer of the Nam Son-Hap Linh industrial park and residential area worth a combined US$1.5 billion due to its slow implementation, according to provincial authorities.
Vu Duc Quyet, Director of the Bac Ninh Industrial Zones Authority, told the Daily on the phone on Monday, that Korean IGS Capital Group was in financial distress and could not pursue the project.
The project was granted an investment certificate two years ago. After breaking ground in October 2008, Korean IGS Capital Group has not made any further move on construction; even though a site was cleared at the provincial government’s expense.
The group recently sent a document to the authorities to end its operation of the project, clarifying that it could no longer develop it.
At the launching ceremony in October 2008, the investor announced the industrial park would draw about US$1.5 billion to US$2 billion in investment from Korean companies and would create more than 50,000 local jobs.
The investment for the project is US$240 million and the total area is 602.5 hectares, in which 402.5 hectares is reserved for the industrial zone. The remaining land is for the modern urban area, the industrial zone’s management center, the exhibition house and the transportation center and factory. Under IGS Capital Group’s initial plan, the industrial zone’s infrastructure would be completed in the third quarter of 2010, but the project is yet to begin.
The investor has also promised to call for other investors, especially from Korea, to join the project.
When, IGS retreated, the province gave the investment opportunity to other investors wanting to replace IGS Capital Group. Many companies signed up to take over IGS’s role; however, the provincial authorities decided to choose KBC because of its reputation as a leader in industrial investment and development.
The Nam Son-Hap Tinh Industrial Zone in Nam Son-Hap Linh commune, situated next to Que Vo Industrial Zone also invested and managed by KBC, has first-phase funding of US$80 million and covers a total of 430 hectares.
The strategic location offers Nam Son-Hap Tinh industrial zone access to Hanoi, which is only 32 kilometers away, and Noi Bai Airport, which has many advantages to attract foreign investors, according to KBC.
The project already has 100 hectares available for rent, and with its tremendous networking, KBC is ready to bring investors to the industry complex. The company expects to generate profits immediately within the same year. The project is anticipated to bring great profits for KBC with 3 years saved in legal procedures, according to the company.
Late last year, Hanoi City authorities also allowed KBC to replace a Japanese investor in an upscale hotel project worth some US$500 million in the capital city. KBC has replaced Japan’s Riviera Corporation in developing the Lotus Hotel project southwest of Me Tri Commune at a prime location on Pham Hung Road near the landmark National Convention Center.
Under Riviera’s initial plan, construction on the project was scheduled for completion early next year, but the project remains on paper. When Riviera announced its withdrawal from the project a few months ago, a host of domestic investors expressed their readiness to develop the project. KBC was chosen among many big domestic companies including the Vietnam Construction and Import-Export Corporation (Vinaconex), Hoang Thanh Investment and Infrastructure Development Corporation, and Thien Thanh Production Trade and Construction.
KBC said that it would develop the project as a landmark in Hanoi, pledging to start work on the project this year. The first-phase development will be carried out within two years.
Saigon Invest Group specializes in developing real estate, industrial parks, resorts and deluxe residences.
VietNamNet, SGT
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