Billion-dollar FDI projects become quite scarce in the first five months of this year, while a number of mammoth ones licensed earlier have been revoked because of financial incapacity on the part of the investors, according to the Ministry of Planning and Investment’s Foreign Investment Agency (FIA).

The location of Ca Na steel complex

Provincial authorities said that it was very difficult to attract foreign direct investment projects worth billions of dollars each like it was two to three years ago and the trend is continuing in the context of the world’s sagging economy.

Le Van Dung, deputy director of Quang Ngai Province’s Dung Quat Economic Zone Authority, confirmed that it was very difficult to attract big investors. Dung Quat Economic Zone used to lure big-ticket projects in the past.

According to the FIA, First Solar Vietnam Manufacturing Co. Ltd. was the biggest project licensed in the first five months of this year. Other projects are very small. For example, Gamuda Land Vietnam comes after First Solar Vietnam Manufacturing Co. Ltd’s project in terms of investment capital at more than USD322 million.

In the year to date, 313 new foreign-invested projects with capital totaling USD3.52 billion have been licensed into the country, a decrease of 57.3% year on year, according to the agency.

However, authorities of cities and provinces noted that although the sizes of these projects were smaller, owners of the projects have deployed their projects more quickly.

Despite global economic difficulties, foreign investors have remained optimistic about Vietnam’s investment climate and deployed their projects, experts said.

The global financial crisis since the end of 2008 has also dealt a heavy blow to many multi-billion dollar projects that were licensed two to three years ago, with several of them having been revoked because investors have delayed their projects for long, or are financially incapable.

Ninh Thuan Province authorities are doing formalities to revoke the investment certificate of the Ca Na steel complex project worth USD9.8 billion because the investors of the project have failed to realize their commitments for developing the project in line with the investment certificate. This is a joint venture between Malaysia’s Lion Group and Vietnam’s Vinashin.

Since its ground-breaking ceremony on November 23, 2008, no progress has been made in its construction, except for part of the site clearance job.

Meanwhile, authorities of the central province of Phu Yen in March also revoked the investment certificate of an USD11.4-billion project involving Galileo Investment Group Inc. The Nam Tuy Hoa Creative City had its license withdrawn for the investor’s failure to place a deposit despite a deadline extension.

The revoking of the projects has left many farming families in limbo, unable to work their land while awaiting compensation for being forced off their properties.

In 2009, the Ministry of Planning and Investment announced that Vietnam attracted USD21.48 billion in FDI in the year. However, with the Nam Tuy Hoa project’s license revoked, the figure would drop dramatically, changing many other economic statistics.

A question has been raised whether Vietnam should continue applying the calculation method which considers the registered capital as an important component. Meanwhile, elsewhere in the world attention is paid to the disbursed capital.