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The corollary of the race to attract investment
Experts believe that the registration of “virtual” investment projects in localities are the result of the “achievement disease” of local authorities, when localities try to attract as many projects as possible.
Besides the mammoth projects in the real estate sector, multi-billion dollar projects have also been registered in other business fields such as tourism or steel. However, many of the projects, which use the huge land areas of hundreds of hectares, have not been implemented yet, even though the investors got the investment license 3-4 years ago. In many cases, the projects’ investors cannot develop projects due to the financial capability problems. In other cases, the investors have left quietly without any notification.
Ba Ria-Vung Tau province has become famous with a lot of big scale investment projects in the tourism sector. It has also become famous because the registered projects have not been going very slowly or have not kicked off, even though the investors got the investment licenses many years ago.
The project on Wonderful World Park, capitalized at 1.3 billion dollars, registered by Good Choice USA-Vietnam Company, was once hoped to create a new face to the Vung Tau City. However, four years after the licensing day, the provincial authorities have decided to add the project into the black list of the projects whose licenses would be revoked by the local authorities.
Covering an area of 130 hectares in Bau Trung area of Vung Tau City, the project is designed to have a five star hotel with 2500 rooms, four 4-star hotel complexes with 4000 rooms, an international conference center and entertainment area.
However, the biggest tourism-entertainment complex in the province has still been… on paper since it got the license in early 2008. The land area allocated to the project has been left idle, or has been cultivated temporarily. Currently, the provincial authorities cannot find the representative of the investor in Vietnam.
The Ninh Thuan provincial authorities have decided to revoke the investment license granted before to the Ca Na steel complex. This was once considered a mammoth project as it had the huge registered capital of 9.8 billion dollars, while the local authorities decided to allocated 1650 hectares of land to the project’s investor Vinashion-Lion Company Ltd.
More and more multi-billion dollar virtual projects have been added into the list of projects that have investment licenses revoked recently. The thing proves to come contrary to the recent local authorities’ policy on “laying the red carpet” to welcome investors and attracting foreign investment at any costs.
The corollary of the race for attracting investment
Experts believe that the registration of “virtual” investment projects in localities is the result of the “achievement disease” of local authorities, when localities try to attract as many projects as possible. They have also blamed this on the decentralization mechanism in granting projects.
Local authorities try to attract as much investment as possible, because they believe that big projects would help develop the local economies strongly and rapidly. Therefore, a race for scrambling for investment projects has been kicked off among local authorities.
The existence of virtual projects has led to a lot of consequences. They have caused the waste of land, take away the opportunities for other investors, change the development program of localities and badly affect the lives of the people in the project areas when their land are taken away for the projects.
In principle, when investors break the commitments, they will see the investment licenses revoked. However, in fact, local authorities are hesitant to do that, and they always have to think carefully before making decision.
In many other cases, though local authorities want to revoke investment licenses, they cannot do this easily. The investors try to blame the tardiness in project implementation on the uncooperative attitude of the involved parties, or the lack of “clean land”. Besides, they also can adjust some items of the projects to persuade the local authorities to extend the time for project implementation.
Vietnam feels happy with the huge foreign investment capital of 70 billion dollars registered in the last few years. However, it has been warned that the registered capital does not have much significance, while it is more important to increase the disbursement and the implementation of the registered projects.
vietnamnet, TBKTSG
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