Vietnam - Thu Thiem not a walk in the park

Ho Chi Minh City authorities are now on the hunt for new investors to get a prolonged $1.2 billion software park project off the ground.

The authorities are at their wit’s ends with the current investors given delays in executing the city’s 15.9 hectare Thu Thiem Software Park project despite series of warnings from the authorities.

Ho Chi Minh City People’s Committee chairman Le Hoang Quan last week asked relevant municipal authorities to look at scrapping the investment licence of investor TA Associates Vietnam.

TA Associates Vietnam is a joint venture between SaigonTel, a subsidiary of Vietnam’s Saigon Invest Group, and TA Associates International, a member of Taiwan-based Teco Group. The chairman tasked the Thu Thiem Township Authority, the management body of the Thu Thiem Township which houses the project, to find new, “experienced and financially competent” investors to kick-start the project “at the earliest”.

Thu Thiem Software Park project, which authorities touted as the biggest software park in South East Asia, has seen no construction since its ground-breaking ceremony way back in 2008. Since then, the Thu Thiem Township Authority has repeatedly asked the investor to get the project up and running and cough up cash for land rental and interest fines.

According to the authorities, as TA Associates Vietnam committed, within 60 days since obtaining the investment certificate the developer would pay 50 per cent of land rental while the rest would be paid after signing land rental contract. Additionally, the investors had to bear a 0.05 per cent interest fine per day for late rental payment. But the investors refused to settle the fines, citing that the global economic crisis had taken its toll on the project.

According to a source close to the joint venture, who declined to be named, being impacted by the global financial crisis was an exemption condition as specified under Vietnam’s Law on Enterprises. “Hence, the authorities cannot punish us for delaying land rental payments,” he said.

The source claimed the developers were very tired of continuous arguments with Ho Chi Minh City authorities over the issue of paying the fines and that if the issue was not addressed, the investor would ask for court intervention.

One year ago when authorities threatened to withdraw the joint venture’s investment certificate, the investors asked if they could be abated land rental, adjust some functions on the project and stretch paying land rental. All these proposals were rejected.

Minh Thien | vir.com.vn

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