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Vietnam province pulls plug on defense-sensitive Chinese-invested resort project

Vietnam province pulls plug on defense-sensitive Chinese-invested resort project

Thursday, November 27, 2014, 13:37 GMT+7

The administration of the central province of Thua Thien-Hue has decided to stop implementing a Chinese-developed resort project at a location deemed sensitive to national defense, the provincial chairman confirmed Wednesday.

Thua Thien-Hue has come under criticism after it licensed World Shine Hong Kong Co. Ltd., whose representatives are Chinese businesspeople, to develop the World Shine – Hue international resort on Cua Khem Cape, where Hai Van Mountain meets the East Vietnam Sea.

The cape is also a border area between the province and the central hub of Da Nang.

World Shine Hong Kong Co. Ltd., through its Vietnam unit The Dieu Co., obtained an investment license for a 50-year term from Thua Thien-Hue authorities in October of last year.

After its decision to green-light the US$250 million project became controversial, the provincial administration reviewed the resort location and found it “has national defense problems,” chairman Nguyen Van Cao said in a statement, which has also been sent to the project’s developer.

“Thua Thien-Hue thus decided to stop the project and accepts any demand for compensation from the developer,” the document reads.

The decision came after the province’s administration worked with relevant agencies and departments, including the provincial military commander, on the issue.

The management board of the Chan May – Lang Co economic zone is now tasked with settling the issue with the project’s developer.

The Thua Thien-Hue administration also met representatives from The Dieu Co. on Wednesday, and the developer agreed to the decision to stop implementing the project, according to a source with knowledge of the meeting.

But the developer has yet to mention any compensation requests.

“Technically speaking, the province’s administration has to recompense the project’s developer,” Nguyen Van Hau, deputy chairman of the Ho Chi Minh City Bar Association, said.

The developer can also sue the province for revoking their license, and the latter is likely to lose the suit, Hau said, adding the compensation, if any, “will not be as small as we may think.”

Hau said in order to avoid similar cases, localities should seek feedback from the Prime Minister and the ministries of finance, investment and national defense before licensing such sensitive projects.

Colonel General Nguyen Van Rinh, former deputy national defense minister, said Hai Van Mountain Pass is “a crucial area that holds significant value in terms of national defense, especially as a defensive posture for Da Nang and Hue.”

“The implementation of a project at a sensitive location like this normally requires consultancy from the national defense ministry,” Rinh told Tuoi Tre (Youth) newspaper on the sidelines of the law-making National Assembly session in Hanoi last week.

Rinh was concerned that the resort project would open doors for many people of different nationalities to the area.

“There are many other locations out there across the country for projects like that,” he added.

The 200-hectare retreat complex is designed to include a 450-room five-star hotel, a 2,000-seat international convention center, a five-story block of 200 deluxe apartments and 350 villas, according to the investment certificate.

Total capital for the project is around $250 million. Its first phase, estimated to cost $115 million, will see construction of the villas and hotel, the document says.

The Thua Thien-Hue administration invested VND50 billion ($2.35 million) in building a 5-km road leading to Cua Khem Cape to facilitate the development of the complex.

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