VNECONOMY, 02/10/2006
Vung Tau – Paradise, which was once believed to be the biggest tourism project in the southern sea city of Vung Tau, is on the verge of bankruptcy.
Vung Tau – Paradise was one of the first five foreign invested projects in Ba Ria – Vung Tau. It was granted a licence in 1991. It is a joint venture between Vietnam’s Vung Tau Intourco and Taiwan’s Paradise Development and Investment Company.
The investors planned to build a three-star 1,500-room hotel, an area for underwater sports, swimming pool, entertainment park, a Vietnamese traditional music centre, park for children, and a 27-hole international golf course.
The total investment capital of the project was estimated at $97mil, toward which the Vietnamese side would contribute $15.5mil (in land).
It has now been 15 years since the licence was issued, and only several items of the project have been completed.
The problem may be that the foreign partner in the joint venture has not contributed as much capital as it had committed. In fact, it is written down in the joint venture’s books that the foreign partner has contributed only $25.4mil in cash and equipment, materials.
However, the joint venture’s management board has not acknowledged this figure as its capital contribution, saying that there were not regular vouchers made.
The joint venture has been experiencing heavy losses since its establishment with the accumulated loss sum of VND74,397bil ($4,649mil) reported at the end of 2005. Moreover, the joint venture owed VND2.1bil ($0.13mil) in tax duties.
