Bac Ninh Province authorities are making procedures to cancel out the IGS Nam Son - Hap Linh industrial park and residential complex project worth $1.5 billion as the Korean investor IGS is financially incapable, an official said.
Vu Duc Quyet, director of the Bac Ninh Industrial Zones Authority, told Daily on the phone yesterday that Korean IGS Capital Group was in financial trouble and could not pursue the joint venture project.
After breaking ground for the mammoth project in October 2008, the investors - Korean IGS Capital Group and Vietnam's Nam Hong Co. Ltd - have not made any further move on the construction project, whose site had been cleared at the provincial government's expense.
The Korean investor has recently sent a document admitting its financial trouble, Quyet said.
"The group has recently sent a document to the authority to end the operation of the project;' he said, adding that "IGS Capital Group clarified that they could not continue to develop the project:'
Korean IGS Capital Group had joined hands with Nam Hong Co. to set up a joint venture on a 70-30 footing with an aim to invest $240 million into the project in Nam Son-Hap Linh Commune, Tien Du District.
Under the project, the two partners will develop factories and showrooms on 400 hectares, and an urban town, including a commercial centre, a school, a clinic, a park and a golf course, on 200 hectares.
The investor has also promised to call for other investors, especially from Korea, to join the project.
At the ground-breaking ceremony in October 2008, the joint venture announced the industrial park would draw about $2 billion of investment from Korean companies and create more than 50,000 local jobs.
However, IGS Capital Group has struggled since the economic crisis and Bac Ninh authorities have asked the Korean company many times whether it would continue investment in the project.
Quyet said that the province would give this investment opportunity to other investors wanting to replace IGS Capital Group. The new investor will cooperate with Nam Hong in establishing a new joint venture.
Quyet said that the province would appraise the financial ability and experience of any investor before deciding whether they could develop the project.
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