Future of VTV Tower in Hanoi's West Lake area in doubt following withdrawal of investors.

Photo for illustration

The VTV Tower project, which was expected to be the world’s tallest tower, is likely to be scrapped after the two major investors - Vietnam Television (VTV) and the State Capital Investment Corporation (SCIC) - withdrew from the project.

In a document sent to the Office of the Government, the Ministry of Finance (MoF) said the national broadcaster had been asked to pest all or the majority of capital from the project because it needed to focus on investing in producing television programs and developing its television business.

VTV said that SCIC is also planning to withdraw from the VTV Tower JSC because the project was not included on the list that need to be controlled by or have a capital contribution from the State.

MoF asked VTV and SCIC to hold a shareholders meeting for the VTV Tower JSC to identify the necessity and objectives of the project before informing Prime Minister Nguyen Xuan Phuc.

Significantly, the project has yet to receive the PM’s approval, even though in 2015, then-PM Nguyen Tan Dung agreed in principle to a VTV and SCIC plan for research and co-investment, under which VTV Tower would be built on 14 ha in the new urban center of Hanoi’s West Lake.

At the time, the BRG Group became the third investor of the project after PM Dung allowed VTV to select a partner.

“If VTV and SCIC do not take part in the project, the State will not provide capital for VTV Tower,” the MoF’s report noted.

The tower was designed to be 636 meters in height, 2 meters higher than Japan’s Tokyo Skytree, 36 meters higher than China’s Guangzhou television tower, and the tallest tower in the world.

Out of the VTV Tower JSC’s registered capital of VND600 billion ($26.4 million), the three investors have only contributed VND150 billion ($6.6 billion) to date, or a quarter of the necessary capital, according to the report.

The project was also to have apartment buildings, office blocks, and service and entertainment facilities, with luxury apartments buildings to account for 30-50 per cent of the total area.

The national broadcaster asked the government to grant special incentives in terms of capital that are normally only available for projects in disadvantaged areas and also sought preferences such as corporate income tax exemptions in the first four years, a 50 per cent reduction for the next nine years, and a rate of 10 per cent in subsequent years, as well as exemptions from import taxes on materials, equipment, and components.

With an approximate fund for the project ranging from $1.3 to $1.5 billion, of which $900 million would be just for the tower, “a project that is not for the TV industry and not for development purposes, but simply for showing off is unnecessary in the current situation where State budget funds are tight,” said Professor Pham Ngoc Dang, Chairman of the Vietnam Construction Environment Association. “That amount of money should be used to build schools, hospitals, and transport works.”

Dr. Pham Sy Liem, Deputy Chairman of the Vietnam Construction Association and former Deputy Minister of Construction said the project is solely for profit as it does not benefit the economy or the community./.

VNF/Vneconomictimes