Opportunity for billion dollar Vung Tau Paradise complex still open

Opportunity for billion dollar Vung Tau Paradise complex still open

One year after the province of Ba Ria-Vung Tau published criteria to choose a new investor for the large-scale Paradise tourism complex in the coastal city of Vung Tau, no investor subscribed for the shares, even though many have shown interest.

According to Le Hoang Hai, director of the Ba Ria-Vung Tau Department of Planning and Investment, many domestic and international investors have come in search for an opportunity to invest in the Vung Tau Paradise project.

Just last week, Korea Infrastructure Co., Ltd. met with the provincial People’s Committee to display its plan to invest a sum of $3.2 billion into the Paradise complex and Bau Trung New Urban Area.

“Paradise has become a magnet attracting foreign and domestic investors ever since its former investor—Paradise Development and Investment from Taiwan—was forced to withdraw after its 25-year licence expired in 2016, before any significant headway was made,” Hai said.

The South Korean investors, Hai added, are still in the initial phase, meaning the door remains open for investors.

Prior to Korea Infrastructure’s involvement, several domestic and international companies planned to get involved in the project, but none were reported to be successful.

They include Singaporean firm Sebrina Holdings Pte., Ltd., which has more than 20 years of experience in the energy, property, and logistics sectors, Hanoi General Export Import JSC, and Housing Development and Trading JSC.

Other potential investors included leading investment management and real estate development firm VinaCapital Investment Management and leading domestic real estate groups Novaland and Vingroup.

“Having learned from the case of the previous investor, local authorities have set criteria for new investors in order to avoid winding up with investors that do not have the capabilities,” Hai said.

The project will be developed under the format of a tourism complex with resort and entertainment functions. It will also combine a water palace, coastal performance centre, water park, 27-hole golf course, shopping centre, five-star convention centre, hotel, and public spaces. The required total investment capital for the project, excluding compensation, ground clearance, and land rent, is upwards $2 billion.

Investors will have to demonstrate equity of at least 25 per cent of that sum ($500 million), and provide evidence of the ability to mobilise capital from credit institutions and bankers. Investors will also have to pay a one-time land rent.

The province has also requested that the new investor honour the completion date of three years from the time of takeover.

Licensed in 1991, Vung Tau Paradise is located on a 220ha piece of land and was originally invested by a joint venture between Vietnam’s Vung Tau Intourco Resort JSC and Taiwan’s Paradise Development and Investment. After decades of poor progress, the resort’s 25-year licence expired in April 2016 and was not renewed.

In the years since the licence was issued, only the 27-hole golf course, a 38-room hotel, and a water sports area have been constructed. This constitutes only one-tenth of the total scope of work. Construction on the remaining stages has yet to be implemented.

According to the Ba Ria-Vung Tau Department of Construction, the province is now home to 128 tourism projects, 19 of which are foreign-invested. The coastal province is now offering a high volume of more than 10,000 hotel and condotel rooms to the market.

In 2017, more than 2.79 million visitors came to the province, an increase of 11.3 per cent compared to 2016.

Related news