Danang gets tough on tardy resort developers

May 30, 2006 | 18:32
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Beachfront resort developers are being told to start speeding up construction on their projects, or risk having their investment licences revoked, Danang authorities have announced.

The much trumpeted Vegas Club & Beach Resort is little more than a skeleton

A Danang Department of Planning and Investment source said the municipal authorities were looking to get tough on indolent resort projects marring the province’s beautiful beaches.
City authorities also asked for two developers, including Viet Collection, to advance payments on land leases to renew trust with authorities, and to set a specific timetable for construction.
In total, 41 tourism and resort projects have been registered in Danang, but the regional authorities are growing increasingly vexed by how little progress has been made on a number of large beachfront proposals along the Son Tra-Dien Ngoc coastal road.
Projects under review include the Redstar, Vegas Club & Beach Resort, P&I, and Eden developments, all of which were granted licences several years ago.
Vegas, one of the largest proposals, was licensed to the Magnum Investment Group in early 2003. The developers planned to build a 450-room, five-star hotel and a villa complex, at cost of $12 million.
To date, the company has only erected the frames of two sample villas, leaving the remainder of the 12 hectare beachfront property bare, with no further sign of construction on the site.
Another project under scrutiny is the Bai But Tourist Complex in Son Tra Peninsula. Developers Hai Duy Corporation declared their intent to open a four-star resort with 120 rooms and a water park and live music facility early last year. But to date the 20ha seaside block bears only a handful of finished houses.
Many of the projects dotted along the 30-kilometre road stretching from Danang’s Son Tra peninsula to Hoi An are in a similar state.
Consultants say many of the resorts are not financially viable. Each project costs tens of millions of dollars to build, and local developers simply lack the funds needed to carry out the plans.
A number of developers have announced schemes to sell villas to secondary investors, but buyers are showing little interest due to the stagnant domestic real estate market.
An industry insider said restricted access was the main reason for developers’ reluctance to get resorts up and running.
He said the number of international flights to the area was still small, meaning there was only a low number of guests are to fill the vast number of hotel rooms already available. Tiger Airways, Silk Air and PB Air currently provide nine flights a week from Singapore and Bangkok to Danang.
He added that the number of rooms in the area would increase with the proposed opening of the Nam Hai Hoi An and Swiss-belhotel Son Tra resorts within the next two years.
“The market is still small while the number of operators is growing,” he said.



No. 763/May 29-Jun 4, 2006

By Ngoc Son

vir.com.vn

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