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2017 update on foreign mega investment projects in Vietnam

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VIR updates on all the new developments at the billion dollar projects licensed between 2006 and 2016 that were valid as of February 2016. Projects that were finished and have seen no new developments are omitted.

 

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1) $1.1 billion Posco project in Ba Ria-Vung Tau

Licensed in 2006, the project aimed to build a steel plant on an area of 130 hectares. The plant is going to operate for 48 years, producing cold and hot rolled, as well as galvanized steel items. The first phase of the plant was completed in 2009 at a cost of $340 million and now has a total capacity of 700,000 tonnes per year.

In September 2016, the Government Inspectorate requested the Chairman of Ba Ria-Vung Tau People’s Committee to review the licenses for four steel projects in the province because they are not included in the government’s master plan on steel development.

The Posco project is one of these, besides the ones by Fuco Steel Corporation Ltd., Vina Kyoei Steel Co., Ltd., and China Steel Sumikin Vietnam Joint Stock Company.

2) $1 billion Intel project in Ho Chi Minh City

Intel Corp first announced its $300-million investment for an assembly and test plant in Vietnam in 2006. The firm’s total registered investment was raised to $1 billion during the following year.

The $1 billion plant in Ho Chi Minh City went into operation in 2010. In November 2014, the company expanded the plant with an additional CPU production line.

At the beginning of 2016, there were some rumours that Intel Corporation’s operation in Ho Chi Minh City will be stopped. Instantly, the representative of Intel rejected this rumour. Nevertheless, Intel confirmed its plan of sharply cutting the number of staff from October 2016.

3) $6.2 billion Nghi Son Refinery in Thanh Hoa

Invested by four companies, namely PetroVietnam, Kuwait Petroleum International, and Japanese companies Idemitsu Kosan and Mitsui Chemicals, the refinery was licensed in 2008. With an area of 400 hectares, the refinery produces LPG, Ron 92 and 95 fuels, diesel, fuel oil, jet fuel, polypropylene, para-xylene, benzene, and sulphur.

The investors raised the capital by $2.8 billion in 2013 to make the refinery the biggest oil refinery and petrochemical project ever licensed in the country. It is scheduled to become operational in 2017 and reach its maximum annual capacity of 9.62 million cubic metres of petroleum products by 2018.

At the end of 2016, the project was 94.4 per cent complete, behind schedule because the contractor had not achieved the deadline as specified in the EPC contract. 

Besides, Nghi Son Refinery may not be eligible for the preferential selling price negotiated with PetroVietnam. The reason is that its products do not meet the Euro 4 standards and the water supply is neither clean nor enough.

4) $4.3 billion New City in Phu Yen

The project, licensed in 2008, is an investment of the Brunei-based New City Properties Development. Occupying an area of 560 hectares, the project was supposed to include a resort, hotel, villas, bungalows, a cruise port, and various sea entertainment facilities. However, the project was coming along rather slowly.

In September 2014, the People’s Committee of Phu Yen allowed the investor to reduce the project area to 357 hectares and the investment capital to $1 billion.

Sun Rise Vietnam, a joint venture between South Korean companies Hyundai Telecom and Hwa Pyung Holding, now holds 70 per cent of the project. The remaining stakes are held by companies from China, the US, and Australia.

In June 2015, New City Vietnam Ltd. held the project’s ground breaking ceremony. Local authorities expect the project to become a highlight of the province and a major tourist attraction.

In the first quarter of 2017, the project is still being constructed, however, due to unfavourable weather conditions, it is behind schedule.

5) $4.2 billion Ho Tram project in Ba Ria-Vung Tau

The Grand Ho Tram Strip Hotel was licensed in 2008 and is developed by Ho Tram Project Co., Ltd., majority owned by US fund Harbinger Capital Partners. The first phase of the five-star fully integrated resort opened in July 2013. This is the first resort in Vietnam with permission to operate a casino on its premises.

In December 2015, Ho Tram Project Co., Ltd. signed an agreement with Vietnamese company CotecCons to erect condo towers on a 164-hectare area of the project site.

In July 2016, the developer proposed the plan of a specialised airport to transport tourists to the complex and the Ba Ria-Vung Tau People’s Committee has agreed in principle to the construction of the airport in Loc An Commune.

However, according to the 2020-2030 air transportation development plan approved by the Prime Minister, Ba Ria-Vung Tau will only have two airports (in Vung Tau and Con Dao), so the project will need to secure approval from the Ministry of Defence and the Ministry of Transportation before the company can request the government to adjust this plan. (See more at: duannhadatmoi.com)

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