VietNamNet Bridge – Foreign investors have recently announced the development of surprisingly highly capitalized projects. However, analysts warn that Vietnam needs to remain cautious about these “super-projects”.

The decision by Intel to invest $1 billion in its factory in Vietnam some years ago stirred up the public because of its huge investment capital. But since then, projects capitalized at several billions of dollars have become more commonplace.

Vietnam is considering a number of huge projects valued at dozens of billions of dollars.

In 2013, the Thai PTT Group said it would invest $27 billion in the Nhon Hoi petrochemistry oil refinery in Binh Dinh province.

The investor received strong support from the Ministry of Finance for the project, which agreed to offer the highest possible corporate income tax rate of 10 percent to PTT for 30 years, though at first it was doubtful about the efficiency of the project and planned a 15 percent corporate income tax.

Vietnam has been promised another huge project, capitalized at $20 billion. The US-based Exxonmobil plans to set up a power plant with the capacity of 4,000-5,000MW, the biggest one in Vietnam.

Professor Nguyen Mai, former Chair of the State Council for Foreign Direct Investment, said Samsung, the South Korean electronics giant, has set up a plan to invest $13 billion into Vietnam in the future, or twice as much as its current investments.

All three of these companies are “big fish”, famous for their prestige and financial capability.

Samsung, which makes $60 billion in profit worldwide, will have to look for a place to “spend money”, Mai said.

In addition, PetroVietnam hopes that Exxon Mobil, the oil and gas giant, will be its partner.

As for PTT, the Binh Dinh provincial authorities have said the company’s assets are big enough to be listed in the world’s top 10.

In March 2014, local newspapers shocked the public with information about the promised investment capital of $100 billion, equal to two-thirds of Vietnam’s GDP, promised by Hong Kong-based Dragon Best International reportedly for three projects in Vietnam.

These include a $50 billion project in the Bo Y Border Gate Economic Zone, a $32 billion finance and trade complex in HCM City, and an $18 billion Ho Tram eco-tourism project.

However, the $100 billion investment, a record in Vietnam, was later succeeded in value by a project in Phu Yen with promised capital of $250 billion, or 1.5 times of Vietnam’s GDP. The figure is even higher than the total foreign direct investment that Vietnam has attracted over the last 27 years.

The Phu Yen Special Economic Zone, which is expected to account for 60 percent of the province’s total area, was initiated by Sama Dubai. The super-project has been officially submitted to the government.

Earlier last year, real estate developers heard about another mammoth project – Wall Street Hanoi – with 70 apartment blocks. The project, with capital of $30 billion, was reportedly initiated by Global Sphere, a company from Dubai.

Pham Huyen