Binh Dinh Invest

FDI splutters in global downturn

09/06/2009

In Jan-May, Winvest Investment Ltd Co increased by USD3.8 billion in Saigon Atlantis Hotel multi-functional resort in Ba Ria Vung Tau and other FDI projects were added few tens of million of US dollar.

Also, the Saigon shipbuilding and repairing factory project was increased in capital size with $20 million, Khai De Vietnam Ltd Co with an additional capital of USD25 million and Mabuchi Motor Da Nang Ltd Co with a plus of USD12 million in investment capital.

Among these, some foreign investors focused on hiking capital for manufacturing industry and processing projects, construction, retailing, repairing and logistic projects.

The projects increased in capital size mainly gathered in HCM City. Traditional partners of Vietnam, such as Korea, Singapore, and Japan still are leading countries in terms of capital increase rate.

Martin Rama, chief economist of World Bank in Vietnam saw some good signals from the aforementioned information despite the number of newly registered FDI projects in Jan-May slumped severely.

Existing foreign investors are taking full advantages of falling prices of materials (especially construction materials), according to the economist, the move will cause certain impacts on Vietnam's market.

Citing the latest survey of Central Institute of Economic Management (CIEM), the sectors posting a strong recovery in Q2 were construction, wholesale and transportation, which are receiving extra capital from foreign investors. These are also the enterprise group helping the disbursed FDI reach USD2.8 billion in the difficult time.

Instead of the previously estimated USD8-9 billion, many economists expected that the actualised FDI of 2009 could be USD11.5 billion.

Phan Huu Thang, head of Ministry of Planning and Investment's Foreign Investment Department forecasted that if working out measures to support investors through cutting down complex administrative procedures, the actualised FDI of last seven months could reach USD9 billion.

However, before the pressure of land, administrative procedures that FDI projects are stuck in, he admitted, the release of FDI disbursement depends much on actions of local governments instead of investors' capacity.

As announced, although Winvest Investment Vietnam Co advanced the land rental of 98 billion dong and pledged to give additional money for supporting ground clearance and compensation, the foreign investor to date has not received the assigned land as previous committed.

Peter Luu, chair of Winvest Investment Vietnam confirmed, work on Saigon Atlantis Hotel multi-functional resort will start right after they receive land from Ba Ria Vung Tau provincial governance.

Factually, the province is managed six trillion dong for ground clearance that will be supplied to FDI projects. Ba Ria Vung Tau called for support from Ministry of Finance.

According to the survey of CIEM, the speed of considering the granting of investment certificates to new FDI projects stands still. Many local governments changed priorities for new projects to pay more attention to requirements for ensuring the quick FDI disbursement.

Source: VNBusinessNews.com