Foreign investors and local authorities should co-operate with each other to push forward mega projects stalled by a shortage of funds for site clearance, a senior official has said.

Le Thanh Quan, deputy director of the Ministry of Planning and Investment’s Economic Zones Management Department, was cited in a recent report by the Dau tu (Investment Review) as saying many localities had succeeded in calling developers to advance funds for site clearance.

Quan’s statement was made in the context that several major foreign-invested projects were not making any progress as local authorities struggled to clear project sites.

The main difficulty faced in site clearance was capital for compensating people displaced by the giant projects, the newspaper reported.

The report noted that several projects in the southern coastal province of Ba Ria-Vung Tau were awaiting site clearance, including the Sai Gon Atlantic Hotel, the “Wonderful” theme park and Skybridge Dragon Sea complex.

Invested in by the US’s Winvest LLC Group, the US$4.1 billion Sai Gon Atlantic Hotel project is one of largest in the province, requiring an area of 307ha on the shore and 610ha of sea area.

However, only 100ha of land have been handed over to the investor so far although the investment certificate was granted more than two years ago.

Hoang Xuan Vinh, deputy head of the provincial Department of Planning and Investment’s Foreign Co-operation and Investment Division, said total site clearance costs for the project was estimated at more than VND600 billion ($28.6 million).

“It is too large compared with the provincial budget,” Vinh said.

The province has spent more than VND100 billion ($4.76 million) in compensation so far, but lacks funds to take this further. Provincial authorities have asked the developer to advance land rentals so that it has more cash to deal with site clearance.

Winvest had advanced VND98 billion ($4.6 million), he said, adding that developer planned to carry out some works this year. However, this would depend on progress made in handing over more land to the developer, he said.

Similarity, the $1.3 billion “Wonderful” theme park project developed by US firm Good Choice Limited had not received the 133ha that it needed in Vung Tau City.

Site clearance cost for this project was even higher than the first one since it was located in the city, meaning that besides compensation to reclaim land, the province must spend large sums of money in providing alternate accommodation for the displaced, Vinh said.

The $900 million Skybridge Dragon Sea project, which will build high-rise towers offering office space, a convention centre, hotels, retail space, entertainment facilities and restaurants, is also awaiting site clearance and handover.

Projects in other localities were also stuck in similar site-clearance difficulties, for instance, the $4.5 billion Guang Lian steel plant project in Quang Ngai Province, the report said.

Quan of the Planning and Investment Ministry reiterated the need for local authorities and developers to solve difficulties together, saying this would bring benefits for both sides.

The Formosa Steel project in Ha Tinh Province is an example, in which Taiwanese investor advanced $30 million to provincial authorities to reclaim land, he said.

Source: VNS