Vietnam pulls plug on 2 public projects costing $1.55 bln

TN News

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 The site of the scrapped Van Phong International Transshipment Port in the central province of Khanh Hoa. The developer of the VND6.18-trillion project lacked the funds to go ahead with it.

Two publicly funded projects that would have cost nearly VND33 trillion (US$1.55 billion) in the central province of Khanh Hoa have been scrapped due to a shortage of funding.

Hoang Dinh Phi, deputy manager of Van Phong Economic Zone, told Thanh Nien that a license issued to the Vietnam National Shipping Lines (Vinalines) for building an international transshipment seaport in the zone has been withdrawn due to unseemly delays.

Work began on Van Phong Port in October 2009 two years after it was approved, but after construction progressed for more than a year, it stalled due to changes in design and lack of funds.

Work on the port was expected to resume in July last year.

But in September the government decided to postpone it since Vinalines did not have the wherewithal to continue.

The project, which was expected to help Vietnam become a trade hub like Hong Kong and Singapore, had been originally budgeted to cost VND3.13 trillion, but had ballooned to double that amount.

In fact, the government released a report in May last year saying Vinalines had defaulted on loans worth $1.1 billion.

The other scrapped project, an oil and gas services base planned by Sao Mai Ben Dinh Petroleum Investment Joint-stock Company -- a subsidiary of the Vietnam National Oil and Gas Group (PetroVietnam) -- has also been called off after the company sought permission for it citing lack of funds.

The base, also planned in the Van Phong economic zone, was licensed at a cost of VND26 trillion ($1.22 billion), and slated for completion in 2017.

Van Phong, established in 2008, houses 126 projects with a total investment of $12.5 billion.

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