VietNamNet Bridge – The investor and the rich Vietnamese once dreamed of
having a Vegas in Vietnam by developing the Ho Tram resort project. However, the
“Ho Tram dream” has been become far away as MGM has decided to quit the project.
MGM withdraws from $4 billion Ho Tram project
One day in January 2013, QNC, the director of a HCM City-based fashion company
and his husband, British nationality, had a wonderful relaxing day when they
were among the 600 guests at MGM Grand Ho Tram Beach in Ba Ria – Vung Tau
province.
“It’s quite like Las Vegas,” C said, adding that she may return there on the Tet
holiday, when the project would be inaugurated.
However, C could not fulfill her project. MGM Resorts International (MGM) just
announced its decision to withdraw from the project management contract some
days ago.
A Vegas in Vietnam?
The Ho Tram Strip project has the estimated total investment capital of $4.2
billion, planned to be implemented within 10 years. Covering an area of 164
hectares and 2 kilometers of coastline, this would be a gigantic entertainment
complex.
In the first phase of the project, capitalized at $500 million, there would be
two 5-star hotels, including the one with 1,100 rooms which have been delivered
by CotecCons, the contractor, to the investor, in December 2012, and the other
with 559 rooms. There would be also an 18-hole golf course which has been under
the construction.
In 2008, an agreement on the complex management services was signed by the
investor and MMH, or MGM MIRAGE Hospitality International Holdings Limited, a
subsidiary of the US MGM Resorts International. Under the agreement, MMJ would
be in charge of developing the brand, managing the complex and getting involved
in the marketing campaigns for MGM Grand Ho Tram – the first resort out of the
total five resorts of Ho Tram Strip.
The agreement, once again gave more reasons to people to believe in the success
of the project, because MGM Resorts International, the giant in the field,
proves to be a guarantor for all the projects.
Nevertheless, the Ho Tram dream has become far away when MGM released its
decision to quit the Ho Tram Strip in a short statement on ACDL’s (Asian Coast
Development Limited – the investor) website asiancoastdevelopment.asia. The
piece of news just says MGM will not manage the first resort without giving
detailed explanations.
Doanh Nhan Saigon reporters tried to contact Lloyd Nathan, Managing Director of
ACDL, but have not received the answers.
Meanwhile, calvinayre.com has reported that MGM has sent a notice to the US
Securities and Exchange Commission, stating that it will implement its right to
break the contract because the project could not obtain clear objectives.
It’s still unclear what the clear objectives mean. Local newspapers, quoting
some experts, have reported that the most important goal of the project –
putting the first resort into operation prior to March 1, 2013, did not come
true.
However, there might be some other reasons behind this. These include the
foreseeable unsatisfactory profitability of the Ho Tram Strip, or the unclear
situation about the possibility of obtaining a license for a casino.
The latter, experts believe is the main reason. The experts have commented that
ACDL has “made a gambling” when investing in Ho Tram Strip. It’s well known to
everyone that Vietnam now does not allow its citizens to go to casinos. The
current policy may change in the future, but no one can say for sure when.
It seems that ACDL does not intend to develop its project just with “hope.”
However, experts say, ACDL seems to “go ahead of the policies” in this case.
DNSG