Saigon Water Park Villas in HOT water

There is an ongoing investigation and lots of bad press circling around the Saigon Water Park project of late.

The attempt to change land zoned for park use into residential use has apparently become a major political and zoning hot potato.

Vietnam News ran this story in Business Beat on Monday.

Sai Gon Water Park dries up

Equipment and machinery from Sai Gon Water Park – the first entertainment facility of its kind in Viet Nam – can no longer be seen at the construction site at Kha Van Can Street in HCM City’s Thu Duc District, leaving surrounding residents and passers by wondering about the progress of the massive project.

Speaking about the park’s closure in mid-2006, the management of the Sai Gon Water Park Co said the park was suspended for "maintenance service and replacement of worn-out equipment."

However, after one year and a half, no equipment and facilities have appeared on the site.

The HCM City Department of Natural Resources and Environment said it would begin an inspection of the company, which had filled the grounds and encroached onto the banks of the Sai Gon River and Go Dua Canal, according to Sai Gon Tiep Thi (Sai Gon Marketing) newspaper.

The deputy chairman of HCM City People’s Committee, Nguyen Huu Tin, has signed a document to establish an inspection team to work on the company’s project in Linh Trung Ward.

Sai Gon Water Park has invested more than VND10 billion (US$630,000) to fill the grounds and build an embankment, aiming to turn the site into a residential area with 50 luxury villas for sale and lease. Sai Gon Marketing also said the company signed a contract with the construction consulting company Meinhardt Viet Nam.

Meinhardt was responsible for changing the purpose of the land-use certificate – granted to the five-ha area under Sai Gon Water Park – from a leisure facility to a housing structure.

All this was done when the company had not been allowed to develop a residential area on the former water park. The city authority said it had not allowed any change in the purpose of the land use of the entertainment facility.

The HCM City Department of Planning and Investment said Sai Gon Water Park sought permission to build high-end villas at the park in hopes of making the company turn around as it had incurred big losses in entertainment activities.

The company, a joint venture between Pegasus Leisure Ltd of British Virgin Islands and Viet Nam’s Thien Tuyen Housing Trading and Investment Consulting Co Ltd, began operation in 1998 with more than $11million in investment capital. The joint-venture’s operation in the first two years was quite successful because it was the only such service at the time.

But since that time, the park had faced fierce competition in HCM City from newcomers such as Suoi Tien Water Park, District 5 Water Park, Dam Sen Water Park and Sai Gon Water World.

The park operator faced difficulties in catching up with other rivals in the leisure market, and as such, has accumulated losses of VND207billion, or nearly $13 million, as of April 2006.

Confronted with the prolonged situation of losses, in mid-2006, the joint venture asked the city government to allow it to shift part of its business to housing.

However, HCM City leaders said that the company must await the master zoning plan of the city. In addition, the change must receive approval from the Government and the Ministry of Planning and Investment.

http://vietnamnews.vnagency.com.vn/showarticle.php?num=01BUS250208

So who is behind this project, anyway?

Could it be VinaCapital's Vietnam Opportunity Fund?

While none of the recent press reports seem to have made this connection, the project named Saigon Water Park Villas or Vista Villas was proudly listed on the company's web site until quite recently. When all mention of it disappeared...

However you can still access the information as it appeared on VinaCapital's site via Yahoo's cache where you can read this:

Saigon Water Park Villas

On behalf of the Vietnam Opportunity Fund we have assisted in the purchase of the Joint Venture Company of the current Saigon Water Park. The park which sits on a site of almost 50,000 sqm's on the banks of the Saigon River was identified as an ideal investment for the fund for its redevelopment value on change from leisure to residential use. Prior to entering into negotiations with the foreign and local joint venture partners we undertook detailed enquiries with the local planning authority to ascertain the likelihood of being granted a change of use and prepared development appraisals detailing the investment returns such a change would generate.

We are currently preparing detailed conceptual designs which provide for a gated residential villa development of 50 villas for submission to the authorities for approval and are in the process of selling the water parks equipment.

Development partners for the project have been identified to provide additional development financing and construction is due to commence during the third quarter 2005. Our involvement will continue until such time as the development is completed and sold.

Project Value: US$ 20 million

OOOOPS!

Guess those are the perils of property development in Vietnam...

[HINT: To see for yourself, just go to Yahoo and search for vinacapital saigon water park. Click on Cached under the first result to get the original unedited version.]