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NEWS UPDATES 10 May 2010

Vietnam: Slow-moving investment projects asked to withdraw

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Bac Ninh Province’s recent decision to withdraw the investment licence of South Korean-invested IGS Vietnam Co is the latest demonstration of Vietnam's ongoing efforts to crack down on slow-moving foreign-invested projects, reported the VNS news.

The investor was licensed two years ago to develop an industrial and residential complex on a site of 630ha at a cost of US$240 million but failed to obtain financing for the project.

The central province of Khanh Hoa planned to withdraw the licence of a $500 million shipyard project licensed and allocated land in 2006, said the director of the province's Department of Planning and Investment, Vo Tan Thai. The province would go ahead after receiving the Government's approval, said Thai, adding that it would invite the PetroVietnam Group to pick up the project.

The People's Committee of Ninh Thuan Province has also warned Malaysia's Lion Group that it would lose its licence to build a $9.8 billion steel complex if it did not carry out the project on schedule. The groundbreaking ceremony was carried out in late 2008 but no further construction followed.

Many foreign investors have encountered difficulties in raising capital to develop their projects due to the global economic downturn, the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment has confirmed.

As a consequence, FIA re-evaluated all domestic- and foreign-invested projects in the first quarter of this year as an aggressive move to deal with suspended and slow-moving projects, the agency said.

Some localities have also misjudged the availability of land prior to granting investment licences, resulting in land clearance delays and a large number of sluggish projects, said FIA's former director Phan Huu Thang.

For instance, the central province of Ha Tinh was attempting to hasten land clearance efforts to facilitate the implementation of the Taiwan-invested Son Duong port and steel complex, with a first-phase budget of $7.9 billion. Construction on the project kicked off early last year.


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