Dozens of FDI projects being abandoned in Dong Nai Province, causing concern about Vietnam's FDI project management capacity.
Dozens of FDI projects being abandoned in Dong Nai Province, causing concern about Vietnam's FDI project management capacity.
As of August, 26 FDI projects, nine of which belong to South Korean investors, six by Taiwanese investors and the remainder from other Asian investors, worth USD133m remained inactive. USD79m have been disbursed on 24 projects, six of which already have most of their money disbursed.
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| Many FDI projects withdrawn in Dong Nai |
Last year, Dong Nai Province also withdrew licences from 37 projects, most of which were abandoned for over five years.
The management board of Dong Nai Province's industrial zones is auditing suspended or abandoned projects and will publicly announce the list as soon as possible.
Too many abandoned projects have badly impacted the province's economic planning and tax revenues. The customs agencies and taxation departments are assessing the damage including tax arrears, unpaid wages and insurance for local workers. They will also assess the ground clearance costs for undisbursed projects.
A number of foreign companies have taken bank loans in Vietnam to invest in local projects. However, a lot of them were forced to dissolve almost immediately due to many difficulties or incompetence, leading to rising bad debts. Some investors only hoarded the land and didn't even begin construction.
Vietnam's FDI performance is criticised as inaccurate because it is mostly calculated based on the FDI commitments but in reality, actual disbursement rates are always much lower than the headline figures.
Phan Huu Thang, former head of the Foreign Investment Agency under the Ministry of Planning and Investment, said Vietnam had over USD100bn of undisbursed foreign investment a year. This money often belonged to stagnant or abandoned projects. However, those projects haven't had their licences withdrawn and are still used to calculate Vietnam's FDI performance.
Nguyen Mai, chairman of Vietnam Association of Foreign Invested Enterprises, blamed local authorities for hasty decisions, granting permits to too many projects without considering their quality or realism.
Since 2013, Vietnam has tightened the laws, especially with the investment laws issued in 2014, the quality of FDI projects have improved. However, the country is still facing with environmental problems, industrial planning and abandoned projects.
(Source:DTinews)
