HCM City has reported to the Ministry of Planning and Investment that it has withdrawn the licence it issued to a company for developing the US$1.2 billion Thu Thiem Software Park in District 2.
TA Associates Viet Nam Ltd Co (TA) had been making tardy progress and not fulfilling its commitments, the report sent by deputy chairman of the city People's Committee Le Manh Ha said.
The Investment Law vests in HCM City authorities the power to revoke the licence issued two years ago.
In the past three years the city created favourable conditions for TA to proceed with the project but no progress was made, the report added. The Thu Thiem Urban Area management said TA, a 20:80 joint venture between the Saigon Telecommunication and Technologies Corp (SaigonTel) and Singapore's TA Associates International – an affiliate of Taiwan's Teco Group – had sought "adjustments" to its licence terms.
They included a reduction in land rental and more time to pay it and an increase in the ratio of residential land in the project to 26 per cent from the original 10 per cent, it said.
It also wanted to be allowed to sell residential land to the public rather than just the technology experts employed there.
But authorities rejected the demands, saying they were "unreasonable".
A stalemate followed and for more than three years after groundbreaking in July 2008, the land allotted for the park remained unused.
Speaking at a press conference last November, planning head for the Thu Thiem Urban Area Duong Cong Luan said: "The investor has to pay rent of at least US$1 million for the land."
The contract required payment of 50 per cent of the rent 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, but TA was yet to pay any rent or fine, he said.
The software park was to have stretched over 15.9 ha along the East-West Highway in District 2's An Loi Dong Ward.
Seven 20-storeyed buildings with a total floor space of 650,000sqm were planned.
Of this, some 487,500sq.m was meant for hi-tech, software, chip-design companies, banks, and others, 97,500sq.m for commercial and retail establishments, and 65,000sq.m for residential space for experts.
It was to have partially opened by the end of this year and completed in the next seven and a half years.
TA has said the park would create 70,000 jobs and achieve annual revenue of $6.5 billion.
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