Vietnam has had enough of hundred-billion dollar projects

Vietnam has had enough of hundred-billion dollar projects

Vietnam, having been burned several times with “super projects”, now casts a suspicious eye on proposals for mammoth, multi-billion dollar projects.

The three projects include a trade – finance – hotel – apartment blocks – international convention complex in Ba Son and Tan Cang in HCM City, capitalized at $32 billion; the Ho Tram International Ecotourism Site and the project on expanding the Phuoc Buu town in Xuyen Moc district in the southern province of Ba Ria – Vung Tau, capitalized at $18 billion. The third one is the $18 billion Bo Y Border Gate Economic Zone with an estimated investment capital of $50 billion.

Shortly after the news appeared in local newspapers, analysts raised their doubts about the huge projected cost of $100 billion.

“This is utopian,” said Dr Nguyen Mai, an experienced expert in foreign direct investment (FDI). “No investor would pour such a big sum of money into a country whose total GDP is higher than the investment capital by only a few tens of billions of dollars”.

“Vietnam will not be able to absorb such huge capital,” he added.

Also according to Mai, it is quite a surprise that the investor intends to inject $50 billion in the Bo Y Border Economic Zone, where the state’s own heavy investment has not brought the desired efficiency.

“When will the investor be able to make a profit, once it spends such a huge sum of money? No one would be foolish enough to make investments now with the hope that the profits would be enjoyed by the future generations,” commented Robert Tran, an investment strategy consultant.

When asked what advice he would give to enterprises, he said there is nothing to say, because the project cannot exist in the real world.

The promised $100 billion sounds suspicious not only to experts, but to the average man-on-the-street as well. However, the problem is that this is not the first time such pie-in-the-sky projects have been introduced in Vietnam.

In early February 2013, a major player from Dubai, Global Sphere, announced its intention to develop a super project, the Hanoi Wall Street, with expected investment capital of $30 billion.

The Hanoi Wall Street would comprise 70 apartment blocks at heights ranging from 40 to 70 stories. There would be a 102 story central tower in the middle of the apartment block. The project was expected to accommodate some 300,000-400,000.

It was quite striking that the Hanoi Planning and Investment Department, with which all investors must register their capital projects, told the press at that moment that it had not even heard about the project.

In 2007, the US Eminence Group announced its plan to develop the $30 billion Nghi Son Economic Zone in Thanh Hoa province. However, soon after a workshop in which the group made an enthusiastic presentation on the project, the investor was “gone with the wind”.

vietnamnet