Vietnam tourism project backers seek license amid viability doubts
03-OCT-2008 Intellasia | Dow Jones
Oct 3, 2008 - 7:00:00 AM
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Two US-based companies backing a massive tourism development proposed for Vietnam's central coast have applied for an investment license despite doubts about the viability of the US$8 billion project.
Private equity firm Tano Capital LLC and Global C&D Inc. are proposing a five-star tourism development on 300 hectares near Dien Duong Beach in Quang Nam province some 820 kilometres south of Hanoi.
"The companies have completed necessary documents and we are waiting for advice from the government and relevant ministries before granting them an investment license," said Tran Van Tri, head of the province's Planning and Investment Department.
If licensed, work on the project's first phase worth US$2.5 billion would start in 2010, according to the official. The plans don't include a casino or golf course, he said.
But there is skepticism in Vietnam about whether the project can be realised.
Little is known about Global C&D Inc, which was founded with registered capital of US$100,000, according to state media. Tano Capital, founded in 2003 by former Franklin Templeton chief executive Charles Johnson, had US$200 million under management in 2007, according to its Web site.
Tano's Mumbai office referred questions to the Shanghai office, which didn't answer calls. A phone number listed on Tano's Web site for its office in Quang Nam province is no longer in service.
A flood of foreign direct investment has helped Vietnam achieve record economic growth rates in the past decade but some of the grander investment plans have fallen flat.
Last year a US$30 billion steel project in Thanh Hoa province fell through after it became clear the development's backer lacked the financial muscle to get it off the ground.
A director of private equity firm that invests in the region said an investment of US$8 billion is a "vast amount and seems unlikely to ever get funded in the next 10 years unless the money is all coming from the Middle East."
"Even then I bet the actual investment plan is a small fraction of that, and US$8 billion is the implied resale value if every imagined unit is sold at full price," he said.
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