Firm seeks partner for software park
by Le Hung Vong
Sai Gon Telecommunication and Technologies Corp(SaigonTel), the local partner of the US$1.2 billion Thu Thiem Software Park, has asked for permission from HCM City authorities to find a new foreign partner to replace TA Associates International Pte Ltd in the joint-venture.
"We'd like to ask for permission to seek another partner to join us to carry out the [Thu Thiem Software Park] project, for the development of the HCM City and Viet Nam as well," said the letter sent to the HCM City People's Committee by SaigonTel General Director Hoang Sy Hoa last week.
The proposal was made after TA Associates Viet Nam Ltd Co (TA) – a 20:80 joint venture between SaigonTel and Singapore's TA Associates International, an affiliate of Taiwan's Teco Group – lost the licence for the District 2-based park project after making tardy progress and "unreasonable requests."
SaigonTel said it had incurred huge losses due to the foreign partner's withdrawal from the project.
It previously proposed paying 100 per cent of land rentals on behalf of its partner but the proposal was turned down by the city authorities and the Investment and Construction Authority for Thu Thiem New Urban Area (Thu Thiem ICA).
In response to SaigonTel's proposals, an official from Thu Thiem ICA said: "SaigonTel has the authority to make any proposal. But these are just their own proposals. We are awaiting for the decision from the HCM City People's Committee."
Earlier, at a press conference on November 10, Thu Thiem ICA explained that TA had sought "adjustments" to its licence terms only five days after it received the licence for the software park project.
The proposed adjustments included a reduction in land rental, more time to pay and an increase in the ratio of residential land in the project to 26 per cent from the original 10 per cent.
It also wanted to be allowed to sell residential land to the public rather than just the technology experts employed by the park.
But authorities rejected the demands, saying they were unreasonable.
A stalemate followed and for more than three years after the groundbreaking ceremony in July 2008, the land allotted for the park remained unused.
The head of planning division at the Thu Thiem Urban Area management board, Duong Cong Luan, said: "The investor has to pay rent of at least US$1 million for the land."
The contract terms required payment of 50 per cent of the rent (for 50 years of operation) within 60 days from the issue of the licence, and the rest within 30 days from the date the land lease contract was signed, he explained.
The investors also had to pay a fine of 0.05 per cent per day for late payment, he said, adding TA was yet to pay either the rent of the fine.
Leech business doesn't suck
Many residents in HCM City's suburban districts of Hoc Mon and Go Vap are living in fear of leeches after a firm, which had set up shops in the area to buy the bloodsuckers at a good price, disappeared without any warning.
Now several fields are full of leeches.
Thanh, a resident of Chanh 1 Hamlet in Hoc Mon's Tan Xuan Commune, said a woman named Kim Anh, wife of a Chinese trader, started a business buying leeches in the hamlet nearly a year ago. Leeches are used in traditional medicines to treat a variety of ailments.
She bought leeches collected from other provinces, especially from Tay Ninh. The creatures were bought for VND80,000 to VND150,000 per kilogramme.
Thanh said the agency used to buy several bags of leeches per day from collectors who carried them on motorbikes, mainly at night, to the buyer.
Finding a new opportunity to make money, several farmers built leech-breeding ponds in their houses.
It is from the house at 42/4D in Chanh 1 Hamlet that leeches escaped from their bags and made their way to a nearby 3.000sq.m field where they grew very quickly.
But the buyer disappeared very suddenly, leaving the 3,000sq.m field full of leeches.
"No one dare to wade across the field now," said Thanh.He said the owners of Kim Anh Agency, the buyer of leeches in Chanh 1 Hamlet, suspended their business over a month ago and moved to an unknown place.
According to Nguyen Thanh Tu, deputy chairman of Tan Xuan Commune People's Committee, commune authorities were informed of the leech purchasing business only a few months after it had started.
The commune authority told the owner of the leech-purchasing agency to suspend their business. Tu said the Hoc Mon District authority had also discussed solutions to issues relating to the spread of leeches in the area.
But the leeches have continued to reproduce, unhindered.
Two weeks ago, a man brought a bag of leeches to the agency. When hearing the buyer had gone, the man threw the bag into the nearby field, said Thanh.
In addition to HCM City and Tay Ninh, leech purchasing has been reported in many other localities, especially in northern provinces.
Steelmakers feel heat
The slump in steel prices, coupled with the recession in the construction market earlier in 2011, has pushed many local steel manufacturers and businesses to the edge of bankruptcy. According to figures released by the Viet Nam Steel Association (VSA), steel consumption in the local market has continually dropped in the past few months, from 480,000 tonnes in August to 326,000 tonnes in October this year.
The slump in consumption means an increase in stockpiles. The volume of unsold steel currently stockpiled at plants is estimated at 500,000 tonnes.
To avoid further losses, steel enterprises have had to sell their products at lower prices.
The VSA said cost price of a tonne of construction steel was about VND15.7 million to VND16 million per tonne if a steel plant operated at full capacity. Steel is being sold for VND15 million per tonne but steel plants are operating at 40 per cent of their capacity, so the losses incurred by steel makers are much bigger.
The association also said that steel ingot prices had dropped in the world market, from $470 to $480 per tonne in September 2001 to $400-420 per tonne at present. Under such critical circumstances, enterprises that have large volumes of stockpiles will face even greater difficulties, and possibly go bankrupt.
"News about the sales of Van Loi and Dinh Vu steel plants in Hai Phong is "the tip of an iceberg," said the director of a steel enterprise in HCM City who declined to be named. He added 30 per cent of steel enterprises can no longer pay their debts, and could be recognised as "going bankrupt".
However, VSA Chairman Pham Chi Cuong said it was not easy at all for steel enterprises which incurred losses to sell their production lines and withdraw from the market under the current critical situation.
The use of outdated technologies is now the biggest difficulty facing many local steel enterprises. Their weak financial capacity was the major reason that forced them to buy cheap facilities for their steel production lines, said Do Duy Thai, director of the Viet Steel Co.
The weak financial capacity and high interest rates in the local market may also see local steel enterprises lose the local market to overseas steel manufacturers as well as plants with foreign direct investment (FDI).
Chairman Cuong affirmed that most steel producers currently facing big challenges were local enterprises.
He explained that FDI enterprises, with stronger financial capacity plus loans with much lower interest rates (provided by overseas banks) could easily overcome the current difficulties and wait for the situation to improve. This is a luxury that locally-invested plants do not have. — VNS