Chinese-Vietnamese Tussle Delays Marsh Project

A Vietnamese company has entered negotiations to build a tourism and cultural site near the Lao capital.

thatluangmarsh-305.jpg That Luang Marsh, August 2010.

A controversial development project planned for the outskirts of the Lao capital has been delayed by a tussle between investors from China and Vietnam, according to a local Lao merchant.

The 365-hectare (900-acre) portion of the That Luang Marsh area near Vientiane was initially granted by the Lao government to a Chinese company, which planned to develop the site as a tourism and cultural center.

But a businesswoman from the area, who spoke to RFA’s Lao service on condition of anonymity, said that Vietnamese investors have now received a government allocation for a portion of the area and are stalling the project.

“The Chinese want to take the whole area. Now discussions are under way for them to take the right side of the boundary of That Luang Marsh, while Vietnamese investors take the left side,” the businesswoman said.

“There has been no agreement yet.”

She provided no details on which Vietnamese company planned to invest in the project.

The businesswoman said that Chinese investors have also requested land in addition to the original 365 hectares they were granted in December.

An official from the Department of Civil Work and Transportation told RFA he could not speak about the Vietnamese investment in That Luang Marsh.

Under the earlier agreement, China’s Wan Feng Shanghai real estate company would invest 12 trillion kip (U.S. $1.5 billion) in the development of the 365-hectare portion of the That Luang Marsh area—a move that had triggered resentment amongst residents who said they were given no voice in the government’s decision-making process.

Wan Feng had said it plans to create a large lagoon in the center of what will become a new urban area that will also include open spaces, a public park, a drainage site, several new roads, a sports center, and trade and service centers with five-star hotels, shopping centers, and entertainment venues.

The project, which is expected to take 15 to 20 years to complete from the beginning of construction in February, will also include a residential area. The first phase of the project will be built ahead of talks among leaders of the Asia-Europe Meeting (ASEM) forum to be hosted in November.

The developer said it will leave approximately 60 hectares (150 acres) of the 365 hectares undeveloped.

More SEZs to come

Vietnam is the largest investor in resource-starved Laos, which suffers from high rates of poverty and a lack of viable infrastructure.

But China is fast catching up with a variety of investments as Vientiane moves rapidly to draw investment from its neighbors.

Chinese firms operate concessions which include casinos in Luang Namtha province, on the border of China’s Yunnan province, and in northwestern Bokeo province on the border with Burma.

In January, Vietnam signed an agreement to turn a Vietnamese-backed Vientiane golf course and real estate project into an exclusive economic zone—the country’s first in Laos.

Residents of a village near the Long Thanh specific economic zone had complained about the compensation they were offered when Vietnamese developers were granted a concession to construct the zone’s golf course two years ago.

But Lao officials have said Vientiane has no plans to stop courting investment from its neighbors.

According to a report from the National Committee for Special and Specific Economic Zone Management Secretariat Office, the Lao government has listed 41 areas as special and specific economic zones, of which 25 will be built over the next 10 years.

The army has forced hundreds of Laotians off of their land to make room for foreign investment in specific economic zones.

Reported by RFA’s Lao service. Translated by Somnet Inthapannha. Written in English by Joshua Lipes.


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