In 2008, when reporting about the Vietnam Financial Center (VFC) project licensed by HCMC authorities, local newspapers called it a ‘super project’. It was expected to include three high-rise 48-storey buildings for offices, shopping malls and 5-star international hotels.
However, the project remains on paper. In 2014, Berjaya, the investor, asked for the municipal authorities’ permission to scale down the project by half.
Nguyen Hoai Nam, CEO of Berjaya Vietnam, said the company has been meeting difficulties following administrative procedures. However, involved parties have met and discussed the provisions in the land auction contract. Nam said he hopes the project will kick off early next year.
In another case, an urban area and international university complex, expected to become the most modern in Vietnam, was drawn up 10 years ago. However, the land plot reserved for the project in Hoc Mon district remains deserted land.
The investor of the Splendora new urban area promised to start implementing the second stage of the project in mid-2012. However, it has made no headway since then because of disagreements between Vinaconex and Posco E&C.
|The ‘super projects’ registered by foreign investors with huge investment capital of billions of dollars are still on paper.|
Do Trong Quynh, CEO of Vinaconex, said it plans to adjust the 1/500 planning this year to be able to implement the second phase with apartment, villa, house and central park items.
In Hanoi, Booyuong Mo Lao and Deawoo Cleve in Ha Dong district are famous for huge registered investment capital and tardiness in implementation.
Meanwhile, the $4.3 billion New City project in Phu Yen province changed hands two years ago because of financial problems, while the capital has been cut to $1 billion.
Analysts attributed the delays in project implementation to unfavorable conditions of the real estate market which appeared after the US financial crisis in 2007-2009 and the government’s efforts to curb inflation in 2011.
The investors were seriously affected by the crisis and they could not arrange capital to implement many projects at the same time.
However, more importantly, investors thought the Vietnamese real estate market was hot when demand was actually exaggerated in 2008.
An analyst said that the demand in Vietnam was high, but integrated urban area complexes were unsuitable for the income of most Vietnamese.
Nguyen Mai, chair of the Vietnam Association of Foreign Invested Enterprises (VAFIE), has urged local authorities to revoke licenses granted to the investors in the projects.
“Local authorities should not be casual about approving investors’ plans to adjust investments. It would be better to take back the projects and give them to investors with more potential,” he said.