Vietnam - Golf course projects face growing criticism

Two senior officials from the Ministry of Planning and Investment (MPI) have made several media appearances in the past couple of weeks, trying to defend golf courses blamed for enroaching on rice fields and creating social and environment problems.

In an online dialogue on March 16, Minister Bui Quang Vinh said golf courses themselves were not guilty of encroaching upon rice fields, forest areas and preventive forests.

Vinh said people had their reasons to protest the development of golf courses. However, the Government has made a decision to stop the development of the "problematic" golf courses.

"Golf courses will be only allowed to develop on sandy or fallow land, barren hills and in places that have really great potentials to develop tourism," said Vinh.

"Golf courses are blamed for taking arable land, making farmers jobless, and threatening national food security... However, the current situation is something different," said Hoang Ngoc Phong, deputy head of the MPI's Institute for Development Strategies.

Phong said in the master plan for development of golf courses by 2020, Viet Nam would have 90 golf courses located in 34 cities and provinces, each covering an average of 71 ha, mainly on infertile land.

According to MPI's figures, the total land area reserved for the 90 golf courses reaches 6,300ha, including 2 per cent of rice fields. No land that grows two-crops of rice a year has been set aside for golf courses, it claims.

In another online dialogue with the public on March 22, the Minister of Agriculture and Rural Development, Cao Duc Phat, affirmed that land for agricultural production had been lost to projects like golf courses and industrial parks.

"Bad programming is to blame," said Vinh.

The problem is that the golf course developers have attempted to use the land area allocated for the golf course projects for doing real estate business. As such, the idea of developing a new kind of sports to satisfy the demand of tourists and foreign investors has been exploited for real estate trading.

Vinh said that in the time to come, relevant agencies would not only check the licensed golf courses, but also take tough measures against golf course projects that had been converted to real estate projects.

He believed that with the new strict regulations, golf course projects would be "cleaner" and in due course of time, "vindicated".

What all this means is still not very clear, because provincial authorities have been sending repeated requests to the Government for setting up more golf courses in their localities. According to the MPI, documents on 28 golf course projects have been sent to the ministry.

"There can be no common answer to all suggested golf course projects. The Government will consider every project before making a decision, while the MPI will take responsibility for examining the projects' feasibility," said Vinh.

"Golf courses are not guilty themselves. If they are set up in the right positions, they would be able to bring many benefits to people, because they can help attract tourists, create jobs and upgrade the living standards of people."

Phong said the number of programmed golf courses in Viet Nam was not too high compared with other countries in the region.

"Golf is a game for everybody, regardless of age. At present there are 7,000 to 8,000 Vietnamese golf players in the country," Phong told the Vietnam Investment Review.

The recent dialogues failed to address social and environmental problems caused by golf courses, including the use of fertilisers and pesticides and the contamination of groundwater resources, in any detail.

Provinces weigh industrial parks

City and provincial authorities are not sure exactly what Directive No 07 on enhancing the management and operational efficiency of economic zones and IPs issued by the Prime Minister on March 2, 2012 implies, because it contains a request to halt establishment of the new IPs.

Authorities in Long An Province are now worried about how to deal with unlicensed IP projects. According to the Long An IP Authority, the Government has approved the province's master plan to develop 30 IPs in the province, and so far the province has licensed 21.

Now the authorities are uncertain about licensing the remaining nine IPs while investors of the these projects wait for them.

Meanwhile, the Viet Nam-Singapore Industrial Park JV (VSIP) is still pursuing the project on developing a 1,000ha urban area, IP and service area in Quang Ngai Province, because, they argue, the project had been approved in principle as part of the Dung Quat EZ, and should not be considered a "œnew" IP project.

At a recent working session with the Quang Ngai provincial administration, the VSIP informed the latter that the IP project would start in the third quarter of 2012.

At the same time, the HCM City EPZ and IP Authority (HEPZA) has said it would license more IP projects located in areas reserved for the IP development programme approved by the Government earlier.

The Government has agreed to reserve 6,000 ha for IP development.

Meanwhile, to date, licensed projects cover 4,000 ha, meaning an area of 2,000 ha can still be used to establish more IPs.

HCM City now has three export processing zones (EPZs) and 12 IPs covering an area of 3,500 ha, and expects to set up seven more IPs, raising the total number of IPs in the city to 22.

Tougher measures

At least three provinces in Viet Nam announced in March tougher measures than usual, including revoking of licences, for delayed foreign-invested projects.

The latest announcement about these "strong measures" was made last week by Bac Giang Province.

"We will urge Foxconn to implement the project for infrastructure development of the Van Trung Industrial Park. If the investor further delays the implementation of the project, the licence granted to it will be revoked," said the director of the Bac Giang Department of Planning and Investment, Trinh Huu Thang.

On March 20, the Department of Planning and Investment in Hai Phong was urged by the city leadership to strengthen management of foreign-invested projects and to take stronger measures against delayed foreign-invested projects.

Earlier in March, Binh Dinh Province urged its departments to conduct an inspection of the foreign-invested projects, especially those that had been delayed.

"Binh Dinh is determined to revoke (licences for) delayed foreign-invested projects and transfer them to other investors who are more financially capable," said Deputy Director of the Binh Dinh Department of Planning and Investment Nguyen Van Dung.

These announcements followed similar measures taken by southern provinces in the first two months of 2012.

In February, Deputy Chairman of Ba Ria-Vung Tau Province People's Committee Ho Van Nien said the province would provide support to help speed up foreign-invested projects while revoking licences granted to investors unable to implement registered projects.

Director of the Long An Department of Planning and Investment Nguyen Minh Ha affirmed that the local authorities would remove unfeasible projects in order to give opportunities to capable investors.

The Central Highlands province of Lam Dong has also announced that they will eliminate projects not implemented. Provincial authorities have said they were considering revoking licences of another 40 projects, most of them small- and medium-scale hydropower plants, tourism and agro – forestry project.

In HCM City, despite efforts undertaken by the Vietnamese partner in the joint venture licensed for the Thu Thiem Software Park Project in District 2 to retain the investment licence, the city's authorities have decided to revoke the licence of the US$1.2 billion project to give opportunities to others.

The provinces of Binh Thuan and Bac Ninh and Da Nang City have also said they are considering ways to eliminate unfeasible projects.

These efforts follow a Prime Ministerial directive in September 2011 on tightening foreign direct investment management and addressing other related issues.

However, decisions to revoke delayed foreign-invested projects have been made by several provinces even before the PM's directive.

The past couples of years have seen the revoking of licences granted to multi-billion projects like the $9.8 billion steel project in Ninh Thuan; the $4 billion Dragon Beach project in Quang Nam; and the $11.4 billion Creativeness City project in Phu Yen.

In 2011, the provinces of Lam Dong, Ba Ria – Vung Tau and Long An made decisions to revoke licences they had provided for 45, 24 and 22 delayed projects, respectively.

The northern border province of Cao Bang, which has so far licensed only nine foreign-invested projects with a total investment of $28 million, last year revoked licences of three projects with a combined capital of $7 million.

Granting licences to multi-billion projects promoted by financially incapable investors was "unacceptable", said Nguyen Mai, former deputy chairman of the State Committee for Co-operation and Investment.

VNS

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