Axe to fall on Paradise Resort project in Vung Tau
20/06/08 (GMT+7)
The project to build a luxury resort named Paradise in the southern coast city of Vung Tau will go off the list of entertainment areas there as the provincial government has just decided to put the foot-dragging property project to an end.
Le Kim Huong, director of the Department of Planning and Investment of Baria-Vung Tau Province, told the Daily on Monday that her agency was making a formal notice to the investor to this effect.
"After receiving approval from the provincial government last week, my department is drawing up a detailed notice to officially announce the decision" to revoke the license for Vung Tau-Paradise join venture, owner of the long-delayed project, she said.
"The province has made the decision after many times extending deadlines to the company to develop the project," she said, adding the notice will be issued upon approval from the Ministry of Planning and Investment (MPI).
In 1991, Vung Tau-Paradise, a joint venture between Vung Tau International Tourism Company and Taiwan's Paradise Development and Investment, received a 25-year license to develop the Paradise resort. The company had planned to spend US$97 million on the 220-hectare resort on Thuy Van beach of Vung Tau City.
The company has also planned to build many facilities such as a golf source, sea sport and entertainment areas, a hotel of 500 rooms and others.
However, after 17 years since receiving the license, the company has just built some preliminary facilities including the golf course, the sea sport area, and a hotel of 38 rooms, while other key components, especially a big hotel section of 500 rooms and an entertainment park still remained on paper.
Huong said the delay was due to financial difficulties on the part of the investor.
"The cash-strapped company could not afford the costly project. It has many times asked for extended deadlines to seek financially-capable partners for developing other remaining sections but the investors still failed new deadlines," Huong said.
The company had also asked the province to extend the licensed operational term to 50 years in line with Vietnam's new investment law, as the previous law dictated a period of 25 years only.
Huong said that the provincial government had many times discussed the project, especially since last year up till now. Together with new deadlines, the province had also given a leeway to the investor, telling it that Baria-Vung Tau could ask the MPI to extend the operational term to 50 years if the company proposes a suitable plan for the project development.
One of the new choices was that the joint venture could transfer the project to other strong investors to continue developing other remaining sessions, but such suggestions did not work, and therefore it is now revoked, she said.
Huong added that the MPI had agreed in principle to revoking the license.
She said that as the projects land would be taken back, the two sides of the joint venture should begin talk about the facilities on the land.
(Source: SGT, URL: http://english.vietnamnet.vn/travel/2008/06/789176/)
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