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$9.6mn for 12 suspended projects ‘impounded’ over policy instability in Vietnam

Thursday, January 22, 2015, 21:15 GMT+7
$9.6mn for 12 suspended projects ‘impounded’ over policy instability in Vietnam
Buildings and facilities of the Doi Phong Lan resort along Ke Ga Beach in the south-central province of Binh Thuan have been derelict since 2008.

Damages worth nearly VND200 billion (US$9.6 million) from the suspension of 12 resort projects along Ke Ga Beach in the south-central province of Binh Thuan have not been compensated for 15 years.

The loss was caused by the provincial government of Binh Thuan and the central government due to their policy instability.

Nguyen Thinh Phat, owner of the Thanh Dat project, one of the 12 suspended projects along Ke Ga, said, “I lost VND15 billion [$721,200] due to the suspension of my project but authorities said they agreed to pay just VND4 billion [$192,300].”

“Our business was growing well and you came to seize our land and cause damage. It is unacceptable to compensate like that,” he said angrily.

Suspended twice

In the 2000s, Binh Thuan authorities called upon investors to build luxury resorts at the then-promising Ke Ga Beach in Tan Thanh Commune of Ham Thuan Nam District.

The resort projects were lined up on a curving beachfront street.

In 2007, when some of the projects had opened and others were still under construction, the Ministry of Transport issued a decision to build Ke Ga Port in the area.

In April the following year, the Department of Planning and Investment of Binh Thuan officially informed investors that the area would be used for a port to transit bauxite from the Central Highlands for export.

The investment capital for the port was modified from $550 million to $1 billion and it was planned to cover an area of 366 hectares along 2.3 kilometers of Ke Ga Beach.

As many as 12 resort projects were ordered to be suspended to provide land for the national-level port project. The resorts have been left abandoned and downgraded ever since. Some parts were temporarily used to keep chickens and dry fruit.

The construction of Ke Ga Port was expected to start in late 2009 but was delayed several times.

In a meeting with the Binh Thuan authorities in February 2013, Prime Minister Nguyen Tan Dung said the construction of the port would not be effective and asked for it to be stopped.

The premier also ordered the authorities to pay appropriate compensation, but the investors have received nothing so far.

“The problem was mainly caused by the instability in policies, and investors have incurred great losses for that,” admitted Nguyen Van Khoa, head of the Binh Thuan travel association.

“The damage is uncountable because it is not only investment but also their effort, time, and business chances.”

He added that, “the Binh Thuan authorities have been active in compensating for the loss, but the difficulties are now from central agencies.”

Seeking solutions

Investors of the suspended resort projects have sent their reports of damages to the Binh Thuan authorities.

The Gioi Xanh said it lost VND64 billion ($3.1 million), Thanh Dat VND15 billion ($721,200), Duc Hanh over VND33 billion ($1.6 million), Doi Phong Lan over VND43 billion ($2.1 million), and the eight remaining projects from hundreds of millions of Vietnamese dong to nearly VND4 billion ($192,300) each.

The investors of the 12 projects claimed that they lost nearly VND200 billion ($9.6 million) in total.

Binh Thuan once formulated a plan to compensate for the projects based on the total sum invested, plus ten percent of the loss of business chances and banking interest for 80 months from 2007 to 2014.

The plan was submitted to the central government but was rejected. The Ministry of Industry and Trade explained that the compensation was too high so the 12 investors can now do nothing but wait.

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