Registered FDI capital big, but implemented capital small

CA - The southern city of Vung Tau is considered as the location with the highest number of “pending investments,” or projects that have been registered but have not been implemented. To date, the city has attracted 94 foreign direct investment (FDI) projects, but implemented capital has just accounted for three percent of the registered capital.

The pending projects

The “Marvelous World” culture park project by Good Choice USA Vietnam, which is expected to cover an area of 130 hectares and has the expected investment capital of $1.299 billion, got the investment license in 2008. However, to date, the implemented capital of the project remains zero.

The project on multi-functional entertainment complex Saigon Atlantis Hotel in Vung Tau by the American Winvest Investment has planned investment capital of $4.1 billion. The project is expected to cover an area of 307 hectares, of which 80 hectares of “clean land” have been allocated to the investor. However, to date, Winvest Investment has just poured the modest sum of $6 million into the project.

Xuyen Moc District in Ba Ria-Vung Tau province has been well known for massive registered investment projects. However, investors in huge projects have made nothing after they got investment licenses, except building fences. Ironically, local authorities even do not know the faces of the representatives of investors.

According to Mai Van Dung, Deputy Chairman of Xuan Moc District’s People’s Committee, the total implemented capital of FDI projects in Xuyen Moc Districts has accounted for only 1.6 percent of the registered capital by June 2010.

Dung went on to say that in some cases, projects’ investors have not made any move over the last five or six years. Binh Chau Tourism and Resort Company, for example, registered to invest in the Satafi zoo project or wild animals in Xuyen Moc District with the registered capital of $500 million. However, to date, no dong has been injected in the project.

According to analysts, it always happens the way that investors try to register investment projects in order to occupy land plots in advantageous positions. After getting land plots, they try to transfer to other people to make profit.

A Canadian investor registered to take the Ho Tram tourism complex project in Xuyen Moc district which has the investment capital of up to $4.2 billion. However, to date, only $70 million have been injected in the project.

Right after getting licenses, the investor organized a solemn ground breaking ceremony and since has done nothing. Meanwhile, many advertisement pieces on selling land in the area have appeared on websites www.thantainhadat.com, www.nhadat24h.com.vn.

Local authorities need to improve project assessment

Analysts have warned about the phenomenon that investors only try to register investment projects in order to get land. After getting land, they try to transfer the projects to others for profit.

A lot of participants who attended the Ba Ria-Vung Tau People’s Council in July urged to settle the existing problem. The Ba Ria-Vung Tau Planning and Investment Department proposed to take inspection and make definitive decisions for the projects registered just to get land fund.

The leaders of the province’s people’s committee has asked districts’ people’s committees to check investment projects and list the projects which have been slow in implementation. Local authorities will have the right to propose to the province’s authorities to revoke investment licenses granted to projects and take back the land allocated to investors.

However, according to some deputies of the province’s People’s Council, revoking investment licenses should be seen as the last choice when there is no other better choice. They said it would be better for local authorities to improve their capability in assessing projects before licensing them. Only when having good capability, will local authorities be able to avoid “virtual” FDI investment projects.