VietNamNet Bridge – The Vietnam National Shipping Lines (Vinalines) has had its investment license revoked. PetroVietnam has also decided to quit a project in the Van Phong Economic Zone.

The incomplete Van Phong Port project.

The two projects are both the huge ones which were once hoped to help change the face of the economic zone in the central province of Khanh Hoa.

Hoang Dinh Phi, Deputy Head of the Van Phong Economic Zone’s Board of Management, has confirmed that the board has sent a dispatch to Vinalines, informing that it will have the license revoked, because the investor failed to implement the project as initially scheduled.

Vinalines, which has been facing big difficulties with its business performance, is now liquidating the assets on the land site and the relevant bidding packages. After the problems are settled, the management board would make a final decision to stop the Vinaline’s implementation of the project on the Van Phong port project.

In 2007, the Van Phong port project was approved with the investment capital of VND3.126 trillion. Two years ago, Vinalines raised the investment capital to VND6.177 trillion. In October 2009, the port project was kicked off. However, just only after one year of implementation, the project has been in stagnation.

The first phase of the project was initially expected to get completed by October 2011. However, by that time, only 10 percent of the volume of works had been completed. The lack of capital was the main reason that forced the investor to suspend the project, then planning to resume the project implementation in July 2012.

However, in July 2012, the government investor released the decision to stop the project because of the limited financial capability of the investor.

The second huge suspended project is the one on the oil and gas industry service base developed by the Sao Mai – Ben Dinh Investment Company, a subsidiary of PetroVietnam.

In May 2011, the Van Phong Economic Zone’s Board of Management granted the investment license to the investor who planned to develop the project with the capital of VND26 trillion, or $1.4 billion in Nin Hoa town.

The project was initially planned to become operational by 2017. However, the investor has run away.

Another project, the one on a shipbuilding yard by South Korean STX Group, capitalized at $500 million has been refused by the Khanh Hoa provincial authorities, also because of the lack of capital.

The Van Phong Economic Zone, covering an area of 150,000 hectares, was approved by the government in 2008, which was believed to serve as the driving force to help encourage the development of the local central region’s economy.

However, most of the projects planned to be developed in the economic zone just remain on… paper.

To date, 126 projects with the total investment capital of $12.5 billion have been registered to be developed in Van Phong. However, after the first five years of operation, only $584 million worth of capital has been implemented, or five percent of the registered capital. However, analysts have noted that the implemented projects were registered before the opening of the economic zone, which are all the tiny projects, if compared with the important projects needed for the Van Phong development.

Meanwhile, Van Phong is believed to need 10,055 billion in capital in 2006-2015 to develop its infrastructure. To date, only VND761 billion has been poured to the infrastructure items over the last six years.

Phuoc Ha