In a meeting with the HCMC People’s Council on Wednesday (22 July 2009), the Board for Investment and Construction Management of Thu Thiem New Urban Area cited many reasons to suggest the city government to terminate the project. The proposal has been submitted to the municipal government.

In its proposal, the board says the project is progressing too slowly, while TA Associates Vietnam Limited as the project owner has also asked for changes to the project, according to Tuoi Tre.

The board says that TA Associates Vietnam Limited, a 20:80 joint venture between Saigon Telecommunication and Technologies Corp (SaigonTel) of Vietnam and Singapore’s TA Associates International, has not respected its commitments when applying for the license by asking for unfavorable changes. These include a reduction of land lease fee, extension of the land rent payment schedule, and expansion of residential land within the project to 26% of the total area instead of 10% as licensed.

TA Associates Vietnam Limited commenced work on the software park in Thu Thiem New Urban Area in July last year, only a month after it had received an investment certificate. Construction on Southeast Asia’s biggest software park, however, has ground to a halt now, reportedly due to the global financial crisis hitting TA Associates International.

The investor has poured some US$10 million into the project including the cost for administrative procedures and the project’s design.

The Thu Thiem Software Park will cover nearly 16 hectares along the East-West Highway in the new town. Besides office spaces for lease, there will be a training center, commercial retail spaces and business facilities inside the park.

The project was aimed to develop seven 20-story buildings having total floor space of 650,000 square meters, with some 487,500 square meters for hi-tech, software and chip design companies, banks and others; 97,500 square meters for commercial and retail purposes and 65,000 square meters as residential space for experts. However, sources said the investor wanted to more than double the land area for residential development and sought to sell properties to everybody rather than to experts only.

As planned, the park would be completed within seven years and a half, but part of the project should be partially commissioned in end-2012, and will create 40,000 new jobs in the construction process and 70,000 other jobs for IT specialists and engineers thereafter.

However, in its latest document sent to authorities of HCMC, the project owner proposed the total duration for development of the project be 10 years. It said that the global financial crisis has posed higher risks and a serious threat to the survival of the project.

TA Associates Vietnam Limited said new incentives if approved by the city government would help the investor survive the challenging time, according to the document.

This is the second IT project licensed in Thu Thiem new urban area. The first worth US$610 million is Vija Brain Park of Japan’s Vija PowerSource Corp. (Vija Power).