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As Thu Thiem Stalls, City Rushes to Lure Investors

Development of Thu Thiem was supposed to be the crown jewel of Saigon’s urban expansion. Since 1996, plans have been in place to turn this green swath of land, directly across from District 1, into the city’s new center. Although the city has cleared most of the land, a faltering economy, lack of infrastructure and high leasing fees have stalled the project.

Thu Thiem hasn’t always been an open green space. The city started clearing the neighborhood’s 60,000 residents in the mid-90s at a cost (as of Jan. 2013) of US$830 million, not including massive relocation fees. 98% of the land has been cleared and while the remaining 150 holdouts are hindering the project, lack of infrastructure is a larger obstacle. According to Trang Bao Son, deputy chief of the management board:

“There are many reasons for the slow progress, but the biggest is the modest capital from the state budget that has been allocated [for infrastructure].”

Vo Sy Danh, a representative of Tien Phuoc Co., echoed this sentiment:

“The infrastructure that connects the Thu Thiem area with the city is very important, but we still do not have anything but the Thu Thiem bridge and tunnel.”

The HCMC Real Estate Association has said that land leasing fees for Thu Thiem are significantly higher than in neighboring countries, discouraging investors. City officials are aware of these criticisms and, on May 8, held a conference to address the lack of infrastructure which is stalling the project:

“The Thu Thiem New Urban Area management board to accelerate the investment in infrastructure, first of all four major roads and the Vong Cung Avenue to call for investment in business projects in the center and the northern residential area. In addition, city leaders also asked the board to concentrate on the project adjacent to the Saigon River (opposite side of districts 1, 4 and 7) including ecological zones in the south, the central square and waterfront parks, combined with low-rise housing projects and towers, office, commercial services along the East-West Highway.”

The city has much to do before investors regain confidence in the Thu Thiem Urban Area. And, considering how much public money has already invested in the 657 hectare mega-project, there’s no going back now.

[Tuoi Tre]