Hanoi will request the State audit to assess a loss of nearly $80 million reported by SAS Hotel investor due to the suspended construction of its hotel at Thong Nhat Park.
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| The construction site is a part of Thong Nhat Park |
SIH Investment Limited submitted a report on March 10, 2010, to the Hanoi People’s Committee stating that Grant Thornton Audit Company was reviewing the above mentioned data.
However, on March 31, 2010 Nguyen The Thao, Chairman of the committee, believed that it’s just an assessment from one party.
The city will request the state audit to cross check the losses because compensation for it will come from the State budget.
As part of the document, SIH Investment Limited Company said that last August, Hanoi’s Department of Planning & Investment suggested they invest in developing 2 areas of Hanoi’s Alcohol Factory at 94 Lo Duc Street which has 7,657 square metres in total. One area was to be used for building a hotel and the other for an apartment building.
However, the land at 94 Lo Duc Street is smaller than the one at 295 Le Duan Street (which has 10,133 square meters). Moreover, SIH needs to pay VND96 billion ($4.9 million) for site clearance compensation at 94 Lo Duc Street.
“After studying the feasibility of the projects and SIH’s losses, we would like to request the committee allow us to develop another site with 24,000 square meters on Pham Hung Road on which it’s planned to build the Thang Long Theatre,” said SIH in the document.
They also suggested the committee allow a possibility that investment of SIH in SAS Hanoi Royal Hotel could account for land leasing fees of the two projects for 50 years.
SAS Hanoi Royal Hotel occupied 9,000 square meters of Thong Nhat Park. The hotel construction is a concern for many architects and the public because it can negatively impact the park. The Ministry of Construction also sent the Prime Minister a document requesting that he suspend the project.
Last April, the Prime Minister had decided to stop the construction and requested Hanoi to recommend another site for the investor.
According to the investor, they already spent $14.5 million on the project by the time they received notice of suspension.
