The Vung Ang Economic Zone – Ha Tinh: A Tale of Forgotten Billion-Dollar Ventures

“The Visionary and the Abandoned”

In June 2007, the Van Loi Integrated Steel Mill project was granted an investment certificate by the Ha Tinh Economic Zone Management Board with a total announced capital of over VND 1,700 billion. In addition to the investor, Ha Tinh Steel Joint Stock Company, the project also had two major shareholders: Van Loi Company and Hop Thanh Mineral Investment Company (both headquartered in Hanoi). The goal was that by August 2010, the factory would export the first commercial steel ingots and promised a steel industry in Ha Tinh. With an annual revenue of about VND 5,000 billion, Ha Tinh Steel Joint Stock Company would contribute VND 250 billion to the local budget, contributing to the economic restructuring of Ha Tinh.

The project was favored to be built on an area of 26ha in Ky Thinh ward (Kỳ Anh town) – a place with convenient road transport and close to the sea port area. However, the entire project just formed and “died prematurely” in a very confusing way, not as investors envisioned and expected from the locality. In the period of 2007-2010, when the project was under construction, some items were stagnant; infrastructure and machinery were “forgotten”. The investor gave the reason of lack of capital. The enterprise implementing the project then worked with three banks with branches in Ha Tinh to be preferred and borrowed more than VND 700 billion to “save”. It was thought that the difficulties would gradually end and the steel mill would soon be completed and put into operation, but the project still did not progress. By May 2015, when the project had been “inactive” for many years and could not continue, Ha Tinh province decided to revoke the investment certificate for the project.

As the investor was unable to repay the debt of hundreds of billions of VND borrowed from three banks, in late 2018, the local civil judgment enforcement agency and related units forcibly enforced, and inventoried all assets and works serving the construction of the steel mill to sell them off and return the money to the banks. The authorities then signed a contract with a unit to appraise the total assets of the steel mill at nearly VND 109 billion, including equipment and machinery imported to serve the construction of the steel complex and assets of works attached to the land use right.

However, six years since the successful auction, the project on the land next to the Vung Ang intersection is still “closed”; machinery and equipment are rusty, only the frame remains. “It was once expected to help local people have more jobs when the factory operates, but everything collapsed. Now, this area is overgrown with grass and trees, and the machinery has not been relocated, which is very wasteful. The locality also hopes to soon clear the machinery and return the clean land, attracting new investors,” said a local leader.

“Red-eyed… waiting for the eagle”

Not far from the Van Loi Integrated Steel Mill project is the project for Investment in Construction and Business of Technical Infrastructure of Phu Vinh Industrial Park (abbreviated as Phu Vinh Industrial Park) with Phu Vinh Infrastructure Construction Investment Joint Stock Company as the investor. In October 2010, the project was granted an investment certificate by the Vung Ang Economic Zone Management Board (Ha Tinh Economic Zone Management Board) with a capital of $23 million (nearly VND 440 billion). The project is implemented in Ky Long, Ky Lien and Ky Phuong wards, Ky Anh town (Ha Tinh). According to the approval, within 3 years from the date of being granted the investment certificate and land handover, the investor must complete the items and call for secondary investors to fill the project. However, it was not until the end of 2017 that the investor started construction.

Up to now, this industrial park has only completed the infrastructure system (transport, high-voltage power, lighting, water supply and drainage systems); attracted 7 secondary investors, of which only 2 projects have been put into operation; many items have not been constructed, including commercial and service land. Due to slow progress, the competent authority of Ha Tinh once made minutes and administratively sanctioned this investor…

Right next to it is the Phu Vinh Urban Area project with an investment of over $68 million (equivalent to nearly VND 1,500 billion). The project has an area of 25 ha. Currently, the project has only completed a 12-storey building, which is not yet operational. Talking to Tien Phong Newspaper, Mr. Phan Thanh Bien – Chairman of Ky Anh Town People’s Committee said that Vung Ang Economic Zone has full advantages in terms of nature, infrastructure and all types of transport from road, sea and soon high-speed rail. According to the resolution of the Ha Tinh Provincial Party Committee, the planning and development of this economic zone is based on 4 functions and pillars: Processing and manufacturing industry (steel production, post-steel, high-tech content industry); Power and energy production (Vung Ang I and II Thermal Power Plants or wind power farms…); Logistics and seaports; Trade, tourism and services. According to the Chairman of Ky Anh Town People’s Committee, under the direction of Ha Tinh Provincial People’s Committee, the locality has coordinated with the Provincial Economic Zone Management Board to review investment projects in the area. From there, it will consider and classify projects that are slow in progress, projects that are sluggish, ineffective or difficult, and then come up with solutions for each project.

“Vung Ang Economic Zone has full advantages for development, but the investment results are not yet commensurate with expectations. The fact that there are projects that commit to invest but are sluggish, not implemented or ineffective has made the local economy scale gradually narrowed. Labor, income and jobs have also declined, greatly affecting the development process. Amidst new waves of investment, sluggish projects have become a ‘low note’ for the ‘heart of the economy’ in southern Ha Tinh,” said Mr. Phan Thanh Bien, Chairman of Ky Anh Town People’s Committee.

For projects that are still difficult and problematic, they will be recommended and proposed to find solutions and remove difficulties, creating a business investment environment. As for sluggish projects that are not implemented according to the progress, they will be resolutely revoked as directed by the province. As a locality striving to become a city in the south of Ha Tinh province, Ky Anh town always expects investment projects in the area in general and in the Vung Ang Economic Zone in particular to be implemented and put into operation. This will help effectively implement the project, creating jobs for local people. From there, people’s lives, economy and income will increase, commensurate with the available conditions.

“After many years of being greatly affected by the marine environmental incident and the COVID-19 pandemic, which caused many investors to leave, up to now, Vung Ang Economic Zone is gradually rebuilding its position, transport infrastructure has been significantly upgraded, and the wave of investment is also rising. Many billion-dollar projects have been and are being built and operated to remove the ‘low notes’ in suspended projects,” added the leader of Ky Anh Town People’s Committee.