The development of the International Exchange City in Hanoi has been cast into doubt after relevant government bodies questioned the financial ability of the consortium of investors. Slow progress finally resulted in last week’s commissioning of an investigative team from the government Inspectorate Department.
Led by Nguyen Duc Hanh, acting director of the Inspectorate Department Area 1 under the government Office, the team will conduct an inspect 45-day inspection from December 28.
The Exchange City was initiated in 1996 as a joint venture between the Vietnam International Construction Co and Switzerland’s La Cite Des Exchange.
The project, with US$500 million in capital, was designed to turn 100 hectares of land in Hanoi’s Tu Liem district into a modern international city.
Five years after being granted the land, the Swiss partners eventually withdrew from the project through a lack of capital, being replaced by VIGEBA International Construction and Investment Joint Stock Co.
Nguyen Tien Dung, director of VIGEBA, told Vietnam Investment Review that the project would go ahead despite the many years of delays.
New partners also meant a new plan, resulting in a reduction in the total investment capital to five trillion dong.
The Exchange City project now consists of Cuba’s Vietnam Investment and Construction Co 40%, General Import and Export Co 30% and the Vietnam Insurance Corp 30%.
VIGEBA has since made clearance compensation for 52 hectares of the development and forked out 150 billion dong on land clearance costs.
However, the Hanoi Financial Department claims that the company has failed to live up to its financial commitment and has in turn slowed down progress.
More than three-years after being granted the land, the project site is still a barren patch of grass, which just keeps accumulating rubbish.
Land acquired for the project is considered one of the last pieces of prime real estate in Hanoi, taking up 400 metres of frontage along Pham Van Dong road which leads to Thang Long bridge.
Once completed, the project will feature numerous high-rise buildings comprising of nine to 30 storey structures, as well as villas, commercial centres, a hospital, schools and an entertainment centre. The Hanoi People’s Committee and investors have been ordered to report to the Inspection Team prior to January 4, upon which a thorough investigation will commence.