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Multi-billion dollar projects stagnate, authorities concerned
Two years after a well-publicized ground-breaking ceremony, the Thu Thiem software park project in HCM City developed by Saigontel, a member of the Saigon Investment Group (SGI) and Taiwanese Teco Group, capitalised at $1.2 billion, remains an empty plot of land.
The Saigon-Tan Ky Cement Industrial Zone project, developed by Kinh Bac Urban Development Corporation, also a member of SGI, is also stagnant.
In July 2008, construction of Thu Thiem Software Park, advertised to become the biggest software park in Southeast Asia, began. Yet only the ground-breaking ceremony has been completed.
One year later, the Thu Thiem new urban area’s management board contacted HCM City People’s Committee, asking authorities to revoke its license.
The project’s developer, a joint venture between Saigontel and Teco - TA Associates Vietnam Company Ltd, asked for the permission to change many items that did not correspond with their commitments in the investment license.
These changes were described by the HCM City people’s committee as “excessive claims” and they were rejected.
At that time, Dang Thanh Tam, Chair of Saigon Investment Group, the parent group of Saigontel, reassured the public that TA Associates Vietnam would no longer ask for land expansion, permission to sell houses and permission to lower land leasing fees.
Replying to doubts about the project developer’s financial capability, Tam stated that the developer would pay a 10 percent deposit immediately, or $9 million, and then 25 percent plus immediate implementation of the first phase of the project capitalised at $300 million. These remain just statements. Up to mid-September 2010, the land remains idle.
Saigontel also wanted to pay 1500 billion dong in land leasing fees for the project, but the HCM City authorities did not agree, because, as explained by General Director of Saigontel Hoang Sy Hoa “the city authorities said the payment should be the work of the joint-venture, not of Saigontel or Teco.” Hoa also admitted that many procedures have not been fulfilled.
Tien phong newspaper quoted sources as saying that, at the meeting with the HCM City’s leaders in July 2010, Teco Group, reasoning financial difficulties, asked for permission to lower investment capital from $1.2 billion to $300 million, called the “temporisation” of the project developer.
On May 19, 2010, Saigon-Tan Ky Cement Joint Stock Company organised a ground-breaking ceremony for Saigon-Tan Ky Cement Industrial Zone project. It was expected to be 600 hectares, including 400 for the industrial zone (IZ).
The cement IZ was anticipated to have production capacity of 14 million tons per annum and total investment capital of $1.5 billion. The project developer promised that, when operational, this would be the biggest cement producer in Vietnam. More importantly, the IZ would make great contribution to the development of the area’s economy.
Tan Ky residents have been eager for a big IZ on the poor land, but, to date, it remains a grassy field.
“We hoped that after the ground-breaking ceremony, a lot of machines will arrive for site clearance. However, nothing has been done so far,” an old farmer told Tien Phong.
Meanwhile, Tan Ky District’s People’s Committee Chair Nguyen Duy Thuy reported that authorities are impatient.
“One month ago, we had a working session with the leaders of Saigon-Tan Ky Cement Company. The investor explained that the Japanese partner said it is necessary to re-assess the reserves and quality of the mines to provide suitable machines and production lines. Moreover, it seems that investor has limited capital and must now work with its banks,” he complained
“Tan Ky began site clearance right after the ground-breaking ceremony. We are now awaiting money from the Saigon-Tan Ky cement company, so that we can pay these people. However, we have not received a single dong,” Thuy revealed.
vietnamnet, Tien phong
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