Investors keen on more golf courses

Le Hung Vong

Two years after the national master plan for golf course development was approved by Prime Minister Nguyen Tan Dung, many localities have asked the Government to include new projects in it.

According to the Ministry of Planning and Investment (MPI), under the master plan, 90 golf courses would be built in the country by 2020. Of these, 24 are operational, 25 under construction, while 39 others have been licensed or approved in principle by relevant authorities.

The total number of courses was reduced to 85 after five of them were cancelled.

The MPI has since found 27 golf course development projects in 13 provinces that are neither included in the national plan nor match the land use plans approved by the Government for these localities.

It said only 21 projects under the national golf course development plan were exclusively golf courses. The other 69 include major property and tourism development segments.

The Tam Nong Golf Course project covers up to 2,000ha in Phu Tho Province, but the golf course itself would take up 170 ha, or less than 10 per cent of the land that the project needs.

Similarly, the Tan Vien Golf Course-Tourism covers more than 1,200ha but only 220ha have been earmarked for the golf course.

The 90 projects are located in 34 provinces and cities nationwide. Of these, nine golf course projects are yet to submit the needed environmental impact assessments (EIAs).

More worryingly, owners of 42 per cent of these golf course projects have obtained permission to discharge waste water (from their golf courses) directly into the water sources in the localities they are located.

Meanwhile, the amount of money investors had actually poured into these golf course projects was far below expectations, the ministry found.

The total registered capital for these golf course projects is US$24.5 billion, including $20.5 billion from foreign direct investment sources.

However, most of the project licences have been granted to investors without strong financial capacities. What these investors have done is to obtain the licences and then delay implementation for one reason or another.

HCM City has granted investment licences to five golf course projects, but four of them have not been implemented. Of these licensed projects, only the 300ha Lam Vien golf course in District 9 has been put into operation.

Nguyen Van Hong, deputy director of the HCM City Department of Natural Resources and Environment, said: "If the investor cannot guarantee progress of the projects as outlined in their licences, then the licences will be revoked."

But these do not include the 159ha Tan Son Nhat Airport Golf Course project, a blueprint of which was approved by the HCM City's Tan Binh District People's Committee earlier in June.

The $300 million project will include a 111ha golf course, a five-star hotel, 54 villas and 1,000 apartments, all located within the Tan Son Nhat International Airport which is managed by the Defence Ministry.

To address the demand for adding more projects to the 2009 national plan for golf course development, Hoang Ngoc Phong, deputy head of the ministry's Development Strategy Institute, said the MPI saw three options.

He told Tuoi Tre (Youth) newspaper that the 2009 plan for 90 golf courses would stay unchanged; more courses would be added to the 2009 plan, raising the total number of golf course projects to 96 by 2020; or the Prime Minister could propose a new plan, fixing once and for all the number of golf courses to be built from now until 2020.

The ministry would opt for the third solution that would add 33 projects, raising the total number of golf courses to be built by 2020 to 118. However, the final decision would be made by the Government, said Phong.

BMW shifts into high gear

Viet Nam is one of the fastest growing markets in Southeast Asia for BMW cars, according to a senior official.

The managing director of BMW Asia, Neil Florentinos, said at the launch of a luxury model in HCM City in early June that in the first five months this year, BMW saw an overall growth of 40 per cent in Southeast Asia, with 46 per cent growth in Viet Nam, 30 per cent in the Philippines, and 14 per cent in Indonesia.

Horst Herdtle, general director of BMW Euro Auto Corp, said 25 Vietnamese customers were on the waiting list to buy the new imported BMW X3.

They would have to wait at least six months to get the the car which will cost VND2.32 billion (over $110,000).

Besides the BMW X3, other luxury cars are also being imported at a time when Viet Nam is struggling with a high trade deficit, analysts have said.

According to the General Statistics Office (GSO), the trade deficit for the first half of the year is estimated at $6.65 billion. The January-June trade gap accounted for 15.7 per cent of the country's total export value during the period, it said.

Automobile imports during the first six months rose 16 per cent over the same period last year to almost $1.55 billion. Of these, imports of CBUs (complete built units) reached $593 million, an increase of 45.9 per cent compared with the same period last year, the GSO said.

Gold exports slow

More than 12 tonnes of gold were exported from Viet Nam in June for a turnover of $630 million, or 8 per cent of the country's total export over the same period.

June's gold exports was higher than total export value of the precious metal for the first five months of the year. The market had been tight then as the Government's policies took effect earlier this year.

Since the Government announced plans to restrict the gold market in February, gold had been traded at levels even lower than global prices in the local market.

The lower prices in the local market offered a golden opportunity for traders to buy the precious metal for export.

GSO figures show that export turnover of gold and gemstones from Viet Nam rose from $86 million in April to $242 million in May and $643 million in June.

These figures bring total gold export volume in the first half of the year to nearly 20 tonnes and their value to $1.027 billion.

But these figures are much lower than in previous years.

Switzerland's import of gold jewellery from Viet Nam dropped by nearly 96 per cent in one year, from 21 tonnes in May 2010 to just 813 kilogrammes in May of this year, the London-based Financial Times newspaper reported.

Last year Viet Nam shipped nearly 61 tonnes of gold jewellery worth SFr2.6 billion ($2.8 billion) to Switzerland, according to the Swiss Federal Customs Administration.

"But this year discounts in the local gold prices have been far smaller, meaning there is far less incentive to sell gold offshore," the Financial Times report said.

Deputy chairman of the Viet Nam Gold Traders Association Nguyen Thanh Truc told Viet Nam Television that total export turnover of gold jewellery from Viet Nam in the last two years exceeded $4.5 billion.

Truc said gold export had helped the country narrow the trade deficit.

The trade deficit in the first six months of the year has been estimated at 15.7 per cent of the country's total export value, lower than the Government's target of 16 per cent set for the whole year. According to GSO figures, the trade deficit would make up 18.1 per cent if the value of gold exports was excluded during that period.

But gold had also been smuggled into the country when its prices in the local market were higher than in the global market.

Statistics from the World Gold Council, a mining industry lobby group, suggest a net inflow of $2 billion – $3 billion per year, according to Scott Robertson, founding partner of Asia Markets Group, an advisory firm.

"If such an inflow takes place this year, it would be a disaster for the country's economy, as it has been suffering a big trade gap in the first half of 2011," said a trader who declined to be named. — VNS