Cash-poor province stalls projects
According to investment laws, the provincial authorities are responsible for site clearance compensation and for removal of houses to be affected by these projects before the "clean" land is handed over to investors. But, the authorities have not been able to mobilise sufficient capital for land compensation.
The Ba Ria-Vung Tau Department of Planning and Investment says the province needs VND3,445 billion (US$203 million) for compensating people for land needed for the 27 projects licensed this year, while the 50-year land rentals from these projects totals only VND1,127 billion ($66 million).
In addition, the province requires an investment of VND12.2 trillion ($720 million), including VND5.3 trillion for the next two years, for developing infrastructure facilities outside the locations of these projects. The department admits that, so far, the province has not yet gained access to this capital.
As a result, investors will have to wait until the province can get enough money for land compensation.
The US’ Winvest Investment Group, which received a license for the Sai Gon Atlantis entertainment park in Vung Tau City in April 2006, has not been able to carry out its project, because it is still waiting to receive the land.
Local firm Thai Duong Co Ltd, which got a license for its $4.3 million Thai Duong Shopping Centre in 2006, has disbursed just $150,000 for the project, because site clearance for the 1.5ha has not been completed.
Delayed compensation also impacts resettlement and employment generation plans for people affected by the investment projects.
Seeking solutions, the provincial authorities are considering several measures, including an increase in land rentals or asking investors to fund all land site compensation and infrastructure development inside and outside their properties.
According to figures from the Ba Ria-Vung Tau Department of Planning and Investment, this year the province has licensed 55 foreign-invested projects, capitalised at nearly $11.9 billion, a nine-fold increase over last year.
Among the huge projects licensed this year are the $4.2 billion Ho Tram Resort and the $3.77 billion Southern Petro-Chemical Complex.
The province has also licensed 48 projects invested in by local investors with a total capital of VND30.5 billion, a third of the total domestic investment in the province over the past two decades.
Lower bonuses this year?
Workers and employees at many local enterprises are worried about possible cuts in bonuses this year as their bosses encounter difficulties and challenges due to the global economic recession.
Many companies in the finance, banking, insurance and property sectors, which took the lead in offering high year-end bonuses for their staff last year, have warned of lower bonuses this year due to poorer business achievements.
Le Thanh Tam, director of the HCM City Department of Labour and Social Affairs, says many companies have revealed that bonuses offered to their staff is only a third to half of what they could give in 2007.
However, the bonus offered by well-known garment companies like Viet Tien, Sai Gon Garment, and Nha Be Garment will remain high, up to two months’ revenues of an employee, from VND5 to 6 million.
The Taiwanese-invested Pou Yuen Co in Tan Binh Industrial Park, has promised their 70,000 workers the bonus of a month’s salary, while the Youth Volunteer Public Services Co has offered their staff bonuses of VND1.5 million to VND3 million.
Vo Van Tan, chairman of the Labour Federation in Cu Chi District, says despite difficulties, most enterprises in the district have pledged to give a month’s salary as bonus to their staff.
Fifty-seven enterprises in Tan Binh District have reported one-month-salary bonuses to their staff, according to the deputy chairwoman of the Tan Binh Federation of Labour, Tran Thi Thieu Lien.
The deputy chairman of District 5 Labour Federation Thai Bich Chau, says 248 of 323 enterprises in the district have sent their report on bonuses to the Labour Federation. The highest bonuses are given by State-owned enterprises, with an average of VND19 million per employee, more than ten times higher than the average bonus at foreign-invested companies – VND1.8 million. The lowest is offered by private and joint-stock companies and cooperatives at only VND1.4 million per person.
