Despite revoking the concession licence granted to a local company for the development of the Nongpaen area in Vientiane’s Hadxaifong district in July last year, the authorities have not yet given permission to another company to develop the site.

The licence was revoked after the Lao Asia Trading International Company (LATIC) contravened agreements signed with authorities in 2014 to develop the Nongpaen area into an international standard tourist attraction.

The company also failed to pay compensation to villagers affected by the project and failed to pay debts owed to sub-contractors hired by LATIC to carry out construction.

Vientiane Planning and Investment Department Director Mr Phoukhong Bannavong told Vientiane Times on Wednesday We are calculating the total amount owed by LATIC to the villagers and sub-contractors.

Hopefully our taskforce committee will finish the calculations within the next two or three months. We will then submit a report to higher authorities, who will address the issue.

Mr Phoukhong said LATIC did not have the financial capacity to repay its debts but he was unable to say whether a new developer would be responsible for the debts incurred by LATIC since billions of kip had been spent on the project.

Several companies have expressed interest in developing the Nongpaen site but they don’t want to be dragged into any trouble. Since these problems arose the future of the project is in doubt, he said.

LATIC owes about 4 to 5 billion kip to villagers in the area. But the amount owed to sub-contractors is not easy to determine, because, let’s say it sub-contracted four companies and those four companies in turn sub-contracted the work to other companies. The situation is complicated which is why it will take time to calculate the full amount of the debt, Mr Phoukhong said.

LATIC was given permission by Vientiane authorities to transform the Nongpaen area, which is near the Xiengkhuan Buddha Park, into one of the largest international standard tourist attractions in South East Asia.

Plans for the US$50-million project included a five-star hotel, golf course, amusement park, artificial lake, and a shopping mall. Construction was expected to start in 2015 with the site to open to the public in 2020.

Under a 70-year concession agreement, the development would cover 150 hectares. LATIC would first develop 73 hectares which would include draining the marsh, treating the water, and clearing the land ahead of construction.

After LATIC failed to comply with the agreements signed with authorities and failed to pay the money owed to sub-contractors and local residents, Vientiane Mayor Dr Sinlavong Khoutphaythoune issued a notice in July last year revoking the concession licence granted to the company.

Mr Phoukhong said the company also did not pay the required guarantee fee after signing the concession agreement but instead gave a US$30,000 cheque which bounced.

By Vientianetimes – Somsack Pongkhao
(Latest Update January 13, 2017)