Long Bien JSC (Lobico) is ready to transfer back the land the golf course is currently situated on at the government’s request, so long as it receives compensation for the huge investment earmarked for the project, company deputy chairman Tran Van Tinh has said.
Tinh currently owns a 48.5% stake in Lobico, the owner of the 36-hole Tan Son Nhat Golf Course.
The facility is said to occupy a huge space that should otherwise have been allocated to the overloaded Tan Son Nhat International Airport which is to be expanded. The airport currently receives 32 million passengers per annum, compared to its design capacity of 25 million.
“If the government wants to revoke [our] project to serve eco-social development or national defense, any business should comply to the request, and we will do the same with the Tan Son Nhat Golf Course,” Tinh told Tuoi Tre (Youth) newspaper.
Even though Lobico has channeled investment worth trillions of dong into the project, Tinh said that he would not be upset if the golf course was withdrawn. (VND1 trillion = US$44.05 million)
“I do not feel anything abnormal,” he said.
“Businesses have to be ready to take risks, especially policy risks, on every investment and this is the case here.”
Tinh added that some of the Lobico shareholders may be sad, “but things will be alright.”
The Lobico deputy chairman claimed that he had nothing to worry about as the golf course has been developed in accordance with the law.
“The project was approved by the government before implementation, so it is certain that [we] will be properly compensated if it is revoked,” he said.
Tinh said the compensation may not cover ‘immeasurable damages,' such as the time spent on developing the golf course and its opportunity costs, but the company would have to accept it, because “the interest of society must be ahead of the investor.”
Tinh rejected rumors that the company had insisted that the government compensate them by offering another piece of land to relocate the golf course to.
“We will never make such a request,” he underlined.
“The compensation will proceed as per the law.
“The government shall decide the form of compensation, but in any case, the rights and interests of the developer must be ensured.”
No group interests
The golf course sits on an enormous 157-hectare piece of military land, with one side separated by a single row of trees from one of Tan Son Nhat’s runways.
Tinh denied allegations that there were group interests in the development of the golf course.
“In 2005, some defense ministry officials realized during their overseas business trips that in countries such as Singapore, Thailand and India, there are golf courses next to local airports, which attracted many tourists,” he recalled.
“At that time, there was unused land next to the airport, so the defense ministry decided to make use of that space to host a golf course for multiple purposes: not wasting the land, but creating a new source of revenue and attracting foreign tourists.”
Tinh said the golf course project was initially developed by a military-run company, the Truong An Development and Investment construction JSC.
“However, the company later proved to be financially incapable of continuing the project, prompting the defense ministry to call for private shareholders,” Tinh said, explaining how Lobico became the main developer of the golf course.
He said Lobico had invested more than VND3 trillion (US$132.16 million) in the project, which is now operating at a loss.
“The golf course is only crowded at weekends, and used mostly by foreign players,” he said, adding that accumulated losses are estimated at more than VND400 billion (US$17.62 million).