Vietnam - Mammoth amusement park projects just make-believe cake drawn on paper

VietNamNet Bridge – A lot of foreign investors arrived in Vietnam and contrived mammoth amusement park projects. Later, only when the investors left, did local authorities realize that the investors just promised the earth.

One stone can kill two birds

“Real estate and entertainment industry – two sectors, one destination” was the theme of the 2012 VIREC exhibition. At the workshop held on the sideline of the event, participants affirmed that it is a growing tendency for investors to develop international amusement parks which is the combination of real estate and tourism investment.

The Dam Sen Culture Park and Suoi Tien Tourism Complex in HCM City, and Vinpearl Land complex have been cited to prove the growing tendency and the success story of the investment model. In 2011, Suoi Tien was listed as one of the 12 most favorite amusement parks in the world.

Experts believe that Vietnam has great potentials to develop the modern entertainment industry, when it possesses a lot of beautiful landscapes and the wonderful traditional culture.

The tourism development strategy by 2020 compiled by the Vietnam National Administration of Tourism (VNAT) says that in order to successfully develop amusement park projects, the investors need to create the products that satisfy the market demand.

Therefore, Pham Trung Luong, Deputy Head of the Tourism Research and Development Institute, believes that the modern amusement park model would serve as the “stone that can kill two birds.” Modern amusement parks certainly would be able to help develop Vietnam’s tourism.

A lot of big projects in the field have been announced. These include the 2 billion dollar project called Happy Land in Long An province, which one of the investors was Joe Jackson, the father of the pop singer Michael Jackson.

These also include the Ho Tram project in Vung Tau City, which is believed to bear the “Vietnamese Las Vegas style.”

Most recently, people heard about the Dong Nam amusement park project in Da Nang City which has the estimated investment capital of 200 million dollars.

Projects exist on paper, investors leave

The information about Happy Land and the well-known investor was overshadowed by the latest news that the investor has decided to quit the project. The decision of the investor has raised worries about the feasibility of the ambitious plan.

Recently, the Tan Tao Group (ITA), after four years (2007-2011) of developing a film studio project – Vina Universal – with the estimated investment capital of 50 million dollars, has admitted that it still cannot arrange capital.

Hoang Kieu, a big businessman, whose name has been associated with the 2010 Miss World pageant, once promised a mammoth project – a new land of Thoi Son with an underwater sports complex, craft villages and eco-tourism.

However, later, since Thoi Son was not chosen to be the place for the pageant, the promise was broken.

The lack of capital cannot turn projects into reality

Tong Van Nga, Deputy Chair of the Vietnam Real Estate Association, though keeping optimistic about the investment model, believes that such projects would meet big difficulties in Vietnam due to the lack of capital.

As such with the capital shortage, the advice for all investors is that they should “cut their coat according to their clothes.”

There are three most popular modes of investment.

First, the investors themselves develop projects, mostly the ones capitalized at less than 50 million dollars. Second, the PPP mode can be applied for modern amusement parks. And third, the concession.

In Vietnam, investors have been advised to follow the first and third modes, i.e. investors would design the whole project and then call for capital from other investors to implement projects.

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