Provincial authorities are revoking investment licenses granted to five tourism and real estate projects in the Danang City area after investors proved unable to mobilize promised funds, according to VietNamNet.
Already dead is the $4.15 billion Dragon Beach (Bai Bien Rong) Resort development licensed in September 2009. The project’s American developers, Tano Capital, LLC and Global C&D Inc., failed to meet the terms of an ‘ultimatum’ from Quang Nam province to put down a security deposit and complete other paperwork by 15 May.
Le Tri Thanh, head of the Investment Promotion and Business Support Agency in Quang Nam, said that four smaller projects ‘will meet the same fate’ as Bai Bien Rong. Totalling about $50 million in planned investment capital, the four include a sea ecological tourism project developed by the American ‘Pegasus Fund,’ and Que Viet tourism complex, the project of a Canadian investor. The other two tourism projects are promoted by Vietnam’s The Ky 21 Company and by Sai Thanh Real Estate Company
Explaining the province’s decision, Thanh said that though the four projects were licensed 3-4 years ago, and though the Quang Nam authorities have been creating highly favourable conditions for their implementation, including resettlement of 100 households, activity by the developers has been negligible.
Like Bai Bien Rong, Thanh explained, the investors of the four projects all have financial problems and they cannot raise the capital they promised.
According to Thanh, after revoking the investment licenses, the Quang Nam authorities will auction off the projects to investors who really want to make investment and have financial capability.
“In the past,” the official admitted, “the province focused on attracting as much foreign direct investment as possible, and it did not pay particular attention to the quality of projects or the financial capability of investors. We have learned from this experience will be cautious in future licensing”.
Thanh said that in the future, Quang Nam province will aim mostly to attract three to five-star tourism projects.
Commenting in Hanoi about the license revocations, newly-appointed Director of the Foreign Investment Agency Do Nhat Hoang said that the cases where local authorities revoked investment licenses were reasonable.
The Ministry of Planning and Investment (MPI) official added that “in some cases, foreign investors have faced difficulties in capital mobilization because foreign holding groups, suffering from the recent financial crisis, did not provide timely loans to the developers in Vietnam. Where appropriate, we have shared difficulties with investors by allow delays in the project implementation.”
“However,” Hoang emphasized, “we will revoke the licenses of the projects which have been slow in implementation without legitimate reasons.”
MPI staff are now taking inspection tours to verify the implementation of foreign-invested projects in the fields of real estate and reforestation.