Some provinces, including Quang Ngai, have complained that their economic growth plans are unattainable because of abandoned multibillion-dollar foreign direct investment (FDI) projects. Investors registered to develop projects, got land allocated, but have not implemented plans. 

According to Phan Huu Thang, an FDI expert, there has been no official report about unimplemented projects. However, he estimates that the ‘investment capital lying dead for many years in abandoned projects’ may be up to hundreds of billions of dollars. This is a big waste of resources which affects the development of the national economy.

“Local authorities wasted big money to clear land to allocate to investors. However, investors have not developed projects on land, while locals cannot use the land for cultivation,” he explained.

“Meanwhile, the state budget is scanty, while production lacks capital,” he added.

Dan Viet newspaper cited a report of the Vietnam Foreign Invested Enterprises’ Association (VAFIE), in 2006-2010, the FDI in the steel sector alone totaled $40 billion. These included five mammoth projects capitalized at over $30 billion. Local authorities considered these as great achievements in attracting FDI.

Who is to blame for the pending projects? Thang believes that state management agencies have to take responsibility for this. 

“Local authorities did not do well in evaluating the projects before licensing,” he said, adding that in many cases, there exist big gaps between registered and implemented capital. This could be seen in the abandoned projects in Quang Ngai, Vinh Phuc and Khanh Hoa provinces.

Thang also thinks that the problem lies in the unfavorable investment environment in Vietnam. The delays in site clearance and complicated procedures discourage investors.

In some cases, investors had to scale down their investment projects because the conditions in Vietnam were below their expectations.

In other cases, investors decided to give up projects because of their own problems, including financial capability and changes in investment strategies.

“All these can happen. What Vietnam needs to do is to minimize the risks,” Thang said in an interview with Dat Viet.

“The situation is really serious as hundreds of billions of dollars worth of capital cannot be used. If just 50 percent of the capital can be brought into life, the face of the national economy would be different,” he noted.

Dat Viet