Oct 23, 2012

Vietnam - Tourism projects fail to see the sun

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Many tourism projects in southern Ba Ria-Vung Tau province face a dilemma.

Land procedures and rental rates were a hot topic on the agenda of a recent mid-October meeting co-hosted by provincial Department of Planning and Investment, Ba Ria-Vung Tau Tourism Association with representatives from diverse state agencies, about 40 travel businesses and investors attending.

Firms voiced their great concern over constantly increased land lease rates, which were adjusted, based on market prices, significantly driving up their investment costs.

For example, according to US-based Skybridge Intercontinental Development Corporation - developer of Dragon Sea international tourism and exhibition-convention centre project in Vung Tau city’s Chi Linh-Cua Lap area, the project was licenced in February, 2010 to cover 43 hectares worth over $900 million.

The project had completed terrain and topographic surveys, environmental impact assessment reports and is awaiting approval for its detailed planning scale1/500. However, it faces hardships due to constantly revised land lease rates which were significantly higher year-on-year.

A representative from Binh An Tourism, developer of top-notch Binh Chau-Phuoc Buu resort project in Xuyen Moc district, said the company was handed 8ha coastal land costing more than VND30 billion ($1.4 million) in land rental, averaging VND400,000 ($19) per square metre.

The company argued the land value set pursuant to Decree 69/2009/ND-CP was unreasonable since the project area is now under management of Binh Chau-Phuoc Buu nature reserve and did not incur land use rights hand-over so the land value should not be subject to constant changes.

Decree 69 additionally provides for land use planning, land prices, land recovery, compensation, support and resettlement.

Surveys by provincial Economic and Budget Committee also mirrored land procedures as key reason behind delays of a number of tourist projects.

Ho Tram O Cap Resort in Xuyen Moc district’s Ho Tram site developed by O Cap Dai Duong is a typical example.

This 2.8ha project had its investment proposal approved by provincial management in June 2011 and reached an agreement on investment location in July 2011. Shortly after that, the developer completed site clearance and associated financial obligations.
However, in March 2012 the project record was suspended by the Department of Natural Resources and Environment upon hand-over by the developer because the province’s land use planning for 2011-2016 had yet to be approved.

The department said the project needed to wait for approval of the province’s land use planning for 2011-2020. When such planning will be ratified remains unknown at present.

Many other projects got stuck due to land procedure dilemma. This practice requires the southern province to ramp up efforts sourcing breakthrough remedies to tackle investors’ land woes.

Gia Han | vir.com.vn

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