Barriers have been torn down to open the way to greater investment opportunities in the province.

Barriers have been torn down to open the way to greater investment opportunities in the province. Unlike many other provinces, Phu Yen is moving ahead amid the tough economic climate. Two or three years ago foreign investors flocked to Vietnam seeking investment opportunities, but the inflow of foreign direct investment (FDI) is shrinking this year as the global financial crisis sweeps the world.

However, while many provinces in the country are witnessing a slowdown in foreign investment, central Phu Yen province and the US-based Galileo International Group are rushing to promote a creative city project, capitalised at around $1.6 billion for the first phase.

Galileo International Group announced the project would cover about 7,000 hectares and consist of a high-tech city, a university area, a commercial area and a studio. Bui Duc Hung, vice head of the Phu Yen Planning and Investment Department, said Galileo International Group would develop this project through 2035 with an estimated total investment capital of up $10 billion.

In the meantime, Tradco Global Engineering & Construction SA is also pursuing a property project in the province. This Swiss company plans to build a $1.5 billion luxury villa area on the coast, along with apartments, shopping malls, a golf course and a five star resort. The two investors both pledged to break ground on these projects within this year if they could get investment certificates.

Galileo International Group and Tradco Global Engineering & Construction SA are not alone in the rush to seek investment opportunities in Phu Yen, which borders Binh Dinh Province in the north and Khanh Hoa Province, home of well-known Nha Trang Bay, in the south.

According to the Phu Yen Department of Planning and Investment, 21 foreign investors sought investment opportunities in the province last year. From January to April this year, Phu Yen received requests for investment certificates from seven foreign investors, despite the worsening economic recession.

Nguyen Ba Loc, vice chairman of the Phu Yen People’s Committee, said the increase in investors coming to the province was a positive sign proving Phu Yen’s attractiveness. “We are attracting more and more investors to the province that is emerging as a new hot spot for investment projects in Vietnam,” said Loc.

Since 2006, Phu Yen has granted investment certificates to 17 foreign investment projects, raising the total registered capital from $273 million at the end 2005 to roughly $6.303 billion in May, 2009.

With the appearance of billion-dollar projects, Phu Yen now has one of the highest levels of FDI in Vietnam.

The most interesting sector for investment in Phu Yen is tourism. Phu Yen has a number of picturesque areas, including the O Loan Lagoon, Cau River coconut ranges, Da Bia and Nhan mountains and Ro Bay and Long Thuy beaches.

Last year, the province licenced Brunei’s New City Vietnam project to build a high-grade tourism complex with an investment capital of $4.3 billion. The project features a luxury resort, 4,300 five-star and 8,900 four-star hotel rooms, 160 high-grade villas and a 36-hole golf course. The province also has a $30 million VietStar Resort-Spa project consisting of villas, a resort and a cable system linking Doi Thom and Bai Xep. La Perla International Living Vietnam Company is also building an $80 million Bai Tram Hideaway Resort in the province.

Rudy Van Bork, general director of La Perla International Living Vietnam Company, said the potential for tourism investment in Phu Yen was huge.

He said Phu Yen is located in a favourable position, near the economic hub of southern Vietnam, which is why his company decided to raise its investment capital from $10 million to $80 million.

Vo Thi Thanh, general director of Thuan Thao Trade and Transport Service Company, said tourism would be the fastest developing sector in Phu Yen. Her company has just opened a resort and a five star hotel in Tuy Hoa city. “The increase of foreign industrial investors in Phu Yen and neighbouring provinces, in addition to the increase of tourists visiting the country, will bring a huge number of potential tourists to Phu Yen,” said Thanh.

Another emerging sector in the province is oil refinery. In 2007, UK-based Technostar Management Ltd and Russian Telloil Company gained investment certificates to develop a $1.7 billion Vung Ro oil refinery. The province is now also calling for investment in the Hoa Tam oil refinery and petrochemcial park.

“We believe that the development of oil projects will attract other investors, which would be a driving force of Phu Yen’s socio-economic growth,” said Loc.

Loc pointed out that the reason for the recent boom of FDI in Phu Yen was a change in provincial investment incentive policies. Over the past three years, the Phu Yen People’s Committee has issued a series of legal documents guiding investment procedures and removing barriers like site clearance and complicated administrative procedures.

“We tried our best to create favourable conditions for investors in order to make our province the best place for investment in Vietnam,” Loc said.

Huynh Thi Kim Huong, director of the Sao Viet Tourism Company, said the change in provincial policies made her feel better about investing in VietStar Resort-Spa project.

The province will also focus on improving its transport infrastructure in order to meet the requirement of investors in the near future, said Loc. Last year, the government also allowed an upgrade of Tuy Hoa airport to meet the rising demand for air transport to the province. Phu Yen is also developing a South Phu Yen Economic Zone, which will offer a good infrastructure system to investors.

Although the province is appearing more and more on the radar of investors, provincial leaders understand that there are still many difficulties ahead. One of the disadvantages is that Phu Yen’s economy is mainly based on the agricultural sector. In addition, the quality of local human resources fails to meet the requirements of investors. Transport infrastructure is also underdeveloped.

According to the Phu Yen Department of Planning and Investment, the province is steering investors towards infrastructure projects including road, seaport, and water supply and treatment projects. What’s more, a plan for investing and upgrading universities and vocational schools has been drawn up.

Loc said the province was setting a focus on improving the quality of local human resources in order to promote the province’s key economic sectors like high- tech industry, oil refinery and tourism, which were also the province’s priority in terms of attracting investment.

“We are looking forward to seeing that in the next few years, Phu Yen will become a hub for tourism and industry, especially oil refinery, in Vietnam,” he said.