» » Oman invests $20m in Cat Ba tourism


Oman's State General Reserve Fund (SGRF)has made a commitment to pour US$20 million into Vinaconex Investment and Tourism Joint Stock Company (Vinaconex-ITC) and become its main strategic shareholder. The company's general director Tran Ngoc Quang spoke to Viet Nam News reporter Van Nga about finding foreign investors despite the gloomy domestic market.

Can you reveal some projects Vinaconex-ITC is calling for investment in?

Vinaconex-ITC now is setting up an urban and tourism project with a total investment capital of $600 million on a 172ha plot of land in Cai Gia-Cat Ba island, off the coast of Hai Phong. Designed by Group 70/PACMAR Inc of the US, the project comprises of three to five-star hotels, resorts, villas, a sports and entertainment complex, an international conference centre, a riverside trade centre and many other facilities.

The project is scheduled to be completed by 2010, with 70ha having been cleared so far. We are now calling for secondary investors to build 102 villas, the Tung Thu hotel, the sports and leisure complex and beaches for domestic tourists.

What difficulties has your company faced in calling for such large investments in the midst of the current economic slowdown?

The local property market is definitely encountering some difficulties, but the sector has never witnessed such an opportune time in terms of foreign investors interested in billion-dollar projects, with the majority focusing on sea tourism.

Besides, Viet Nam's tourism industry is expected to receive 6-6.5 million foreign tourists per annum by 2010, and the number of locals with an annual income reaching $3,000-5,000 is anticipated to increase remarkably in the next five years. These should be considered very favourable conditions for the initial development of the local tourism-property market.

Our Cai Gia-Cat Ba project has sparked a lot of investors' interest due to its economy of scale, feasibility, strategic location and the island's clear-cut advantages in sea tourism. In fact, Vinaconex-ITC just signed a memorandum of understanding with Oman's SGRF, witnessed by both Vietnam's Deputy Prime Minister Nguyen Sinh Hung and Oman's Economic Minister Ahmed Macki. Under the memorandum, SGRF commits to invest some $20 million to become our main strategic investor.

Furthermore, the company's three founding shareholders - Vietnam Construction and Import-Export Corporation (Vinaconex), Vietnam Export Import bank (Eximbank) and Vietnam Agriculture and Rural Development Securities Co (Agriseco) - are among the capital market leaders and boast strong financial abilities and rich project-appraisal experience. These two professional institutions will therefore play a great role in our project and also provide financial support to clients wishing to invest in our properties.

What experiences did you draw on in calling for foreign investors in this difficult time?

After a period of herd mentality when investors were rushing for gold, foreign currencies, property speculation and so on, it is now time for them to turn their attention to less risky, longer-term investments which promise more stable profits and can take advantage of the potential growth of the country.

Investors are, therefore, seeking reliable partners with feasible projects to put their money into. For foreign investors specifically, the local partners' clear vision and business strategy, strong financial capacity and distinguished projects are crucial factors in building their confidence. Regarding the Cai Gia-Cat Ba project in particular, besides the island's attractiveness, beauty and convenient sea and air transport, we have created some other distinguishing features. Under the advice of our American designer, we've mapped out a very low density of construction works to ensure a natural environment for tourists.

Fortunately, the project is supported by key infrastructure development being undertaken by the government. They include the new Highway 5, connecting Ha Noi and Hai Phong, and the bridge linking Dinh Vu and Cat Hai. At the same time, investors are enjoying a series of incentive policies on land rental and investment procedures being applicable to the area.

What do you suggest developers like Vinaconex-ITC do to overcome these hardships when the local property market is considered to be facing one of its most challenging periods?

The existing difficulties are certainly resulting in tougher competition between property developers, especially those involved in foreign investment. As a consequence, only developers having clear development strategies, adequate human resources and particularly strong financial abilities can survive the competition.

Vinaconex-ITC plans to increase its chartered capital from the current VND300 billion ($18.2 million) by calling for more investors to share in our potential investment opportunities.

Source: Vietnam News

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