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The Japanese investors behind a $250 million hotel in Hanoi have been given permission to back out.

The investors of the Lotus hotel have received permission from the Hanoi People’s Committee to withdraw from the project, claiming difficulties in raising financial resources to develop it, according to a company source. The Lotus hotel was given an investment certificate two years ago to be opened in 2010 to cerebrate the 1,000-year anniversary of Thang Long-Hanoi.

The project has been delayed due to difficulties in land clearance and compensation, since the Hanoi People’s Committee could not give “fresh land” to the investors. After large efforts from city authorities, the land was transferred to the investors last year, after more than a year’s delay.

However the investors in turn faced difficulties in raising capital to develop the project. Moreover, the investors also said that they could not meet the city’s deadline to open the hotel in 2010, and they decided to withdraw, at a loss of millions of dollars. Speaking with the Vietnam Investment Review at the beginning of the project, Tamiro Ohama, vice chairman of the Riviera Corporation, expressed his wish to create a big venue to serve the Japanese community living in Vietnam.

“The Nikko hotel is quite small compared to the large Japanese community in Vietnam, which requires a larger and more advanced facility,” Ohama said. With total investment capital at $250 million, the hotel was designed to have 769 rooms in a 15-storey building on 4.6 hectares. It was also designed with a banquet centre to serve from 1,000 to 3,000 guests, which was expected to be used for some 1,000-year anniversary celebrations.

Japanese investors had to pay a land-lease taxation for the whole 50-year lifespan of the project as well as a non-refundable $2.5 million to the committee’s budget. A source from the investors said that this $2.5 million would be refunded by the committee. Without disclosing details, however, this source said that many Vietnamese companies were keen to replace the Japanese investors to develop this project.

Located in the Southwestern Sport Culture Park in Tu Liem district’s Me Tri commune, next to the National Convention Hall, the project site is one of the most valuable venues in the capital.

The first and only one 100 per cent, Japanese-invested hotel so far in Hanoi is the Nikko hotel, which opened 12 years ago.

Source: VIR

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