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$4 billion mammoth project raises doubts about its feasibility
Another mammoth foreign invested project has been licensed. However, people seem to keep cautious this time, because they heard about the collapse of many mammoth projects in the past.
Le Phuoc Thanh, Head of the Chu Lai Open Economic Zone, who has taken office as the Chair of Quang Nam Province’s People’s Committee, has confirmed that he has approved the $4 billion Nam Hoi An resort project, and the investment license was granted to the investor some days ago.
A question was raised that if Nam Hoi An has been licensed to replace the Bai Bien Rong project, capitalized at $4.15 billion, whose license was revoked by the Quang Nam province’s authorities in November because the investor did not pay a deposit. However, Thanh has affirmed that these are two completely different projects.
Dau tu newspaper has quoted its sources reporting that right in mid 2007, the Quang Nam People’s Committee and VinaCapital signed the initial agreement on the project. In early January 2009, the province’s Communist Party and the authorities sent a dispatch to consult the Communist Party’s Standing Committee about the project invested by Genting VinaCapital joint venture which would follow the investment model of Ho Tram project in Ba Ria – Vung Tam, also a mammoth project.
In early February 2009, the Prime Minister released a positive decision on the investment principle of the project. In late July 2010, the Ministry of Natural Resources and the Environment approved the report on the project’s possible environmental impacts. The construction plan was also approved by Quang Nam’s authorities in mid September 2010. And finally, the project obtained the investment license.
When asked if the local authorities will require the investors to make a deposit in order to avoid another Bai Bien Rong project, Thanh affirmed that a deposit of one million dollar was paid two years ago, and the investor wil have to continue to pay more. The total sum of deposit money would be about five million dollar.
“We have requested the investor to strictly follow the procedures. If they don’t, we will not allow the implemention of the project. If the investor is too slow, we will consider revoking the investment license,” Thanh said. However, Thanh believes the project is feasible, because both Genting and VinaCapital are the two financially capable investors.
As planned, the Nam Hoi An project will be located in the coastal area in Quang Nam province, covering 1500 hectares. This will be a big resort complex with many hotels, resorts, villas and other items.
Le Minh Anh, who was the Chair of Quang Nam province and who had once worked on the project, agreed that the capital contribution would be carried out in four phases. In the first phase, the investor would contribute $236 million, while the figures would be 190 million, 160 million and 214 million in the next stages
Besides the most important investment items, such as resorts and the areas for foreigners, the Quang Nam’s province has allowed Genting VinaCapital to build less than 2500 houses in the project, and allowed the investor to cooperate with other investors or transfer parts of the project to secondary investors.
The investment plan seems perfect. However, the Vietnamese do not leaped for joy. It is because a lot of mammoth projects were canceled in the past, because the investors could not prove their financial capability. Therefore, the best thing they can do now is to keep the wait-and-see attitude.
vietnamnet, Dau tu
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