Billion-dollar projects sitting idle in Saigon south

17:49 | 16/10/2018
After impressive announcements, several mega real estate projects with investment values ranging from several hundred to billions of dollars in Ho Chi Minh City’s southern part remain empty after long years.
billion dollar projects sitting idle in saigon south
The road to the billion-dollar Saigon Pennisula project is seriously dilapidated

High initial expectations

The Mui Den Do theme park and modern urban development complex called Saigon Peninsula in Phu Nhuan taking up 117ha in Ho Chi Minh City’s District 7 and worth $6 billion in total investment value, evoked great hopes among city residents at its ground-breaking ceremony.

According to the developer Saigon Peninsula Group JSC and the broker, Saigon Peninsula will ensure harmony between urban space and natural setting, and acting as the “green lung” of Ho Chi Minh City.

Simultaneously, it will function as a multi-purpose urban development and provide ideal space to meet every need for housing, commercial office area, as well as modern and upscale entertainment in Ho Chi Minh City’s southern part.

Besides, the complex also features a 600m international marina with an estimated scale reaching 4.6ha. Once completed and put into use, the marina could receive large vessels up to 200,000 gross register tonnage (GRT), the largest of its kind in Vietnam.

According to the developer Saigon Peninsula Group JSC and the broker, Saigon Peninsula will ensure harmony between urban space and natural setting, and acting as the “green lung” of Ho Chi Minh City.

In mid-2016, a partner of Saigon Peninsula, Van Thinh Phat Group, announced signing an agreement with a foreign consortium of Pavilion Group and Genting Group to develop the super project.

Accordingly, Pavilion Group will play a leading role in the master planning and deployment of core components, including a shopping mall, five-star hotel, premium apartments, and Grade A office complexes, whereas Genting Group will engage in building a world-standard marina.

The city’s southern part is also home to the Phuoc Kien residential area project, located in Nha Be District, of privately-held developer Quoc Cuong Gia Lai JSC, which was once expected to bring more than VND12 trillion ($521 million) in annual revenue to the company.

The project, planned to cover 93ha space just one kilometer west to the famous Phu My Hung new urban area, is expected to become an integrated development consisting of trade, administrative and healthcare facilities, as well as penthouse and terraced house suites and residential blocks.

The plan on developing complete infrastructure and find a joint venture partner to implement the first phase was jumpstarted in 2011. At the time, the company’s leaders were confident in reaching VND12.2 trillion ($530 million) in revenue and VND7.4 trillion ($321 million) in profit from the project during 2011-2016.

The disappointing reality

With these mega urban development projects in the development pipeline, Ho Chi Minh City’s urban face was once expected to undergo a turnaround with city dwellers living and working in modern metropolises as well as using premier facilities. The reality, however, was more despairing.

At the Saigon Peninsula project, the developer initially wanted to get the investment proposal approved in the fourth quarter of 2016, completing land acquisition in the first quarter of 2017, and building the project technical infrastructure by the second quarter of 2017, and then social infrastructure from the fourth quarter of 2017 to the first quarter of 2018.

In reality, after a showy ground-breaking ceremony, the project remains mostly empty space till now. Currently, there were a few guards near the gate and leading to the project site whose charge is to keep people’s cattle from wandering into the project site.

In one side of the project, a jetty remains half-done, whereas the road heading to the billion-dollar project is full of pitfalls and is extremely muddy after each rain.

A resident living near the project site recently told VIR that since late 2016 there has been no sign building materials being transported to the project site, and land brokers, who previously crowded the area have stopped coming.

At the Phuoc Kieu residential area project of Quoc Cuong Gia Lai JSC, after optimistic announcements a decade ago, the project has yet to complete site clearance and compensation.

The project site is now a wild grass field and to reach the site, one must travel a tiny winding road and pass through a seriously degraded bridge.

Ms Huong, who lives at the project site, unveiled that state officials have repeatedly came to the area to measure the land and discuss land acquisition and compensation—there have been no results though.

“I am living in such bad conditions, without water and electricity, within polluted surroundings and muddy roads, without knowing when we could leave,” Huong said.

Huong and other residents shared that they expected receiving compensation early to be able to move, but after years, the project developer and the residents have yet to come to a mutually agreeable rate of compensation.

Tien, having a house and land in the project site, said that his family wants the developer to pay them a compensation of VND15-17 million ($650-740) per sq.m for their 200sq.m-plus land area, the developer, however, is only willing to pay about VND10 million ($435) per sq.m.

While late last year, developer Quoc Cuong Gia Lai JSC reported that a business partner injected money into the project, the project has seen no further progress since then.

By Viet Dung

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