The ambitious plans for Vietnam's Phu Quoc island, a US$5 billion project aimed at transforming it into a premier conference and exhibition hub for Southeast Asia, are facing significant challenges just 18 months before the 2027 APEC summit. This massive undertaking, which includes an airport overhaul, a light-rail line, luxury hotel clusters, and a new sewerage system, is being funded by one of Vietnam's largest conglomerates in exchange for land, operating concessions, and the prestige of constructing national landmarks. However, the project is encountering multiple hurdles that threaten its timely completion.
One of the primary issues is the shortage of workers, building materials, and diesel on construction sites. This shortage is exacerbated by the region-wide energy crisis triggered by the Strait of Hormuz's closure during the Iran war. The 18km boulevard connecting the airport to the summit complex is unfinished, and not a single new hotel room has been built, indicating a significant delay in key infrastructure projects.
This situation raises questions about the sustainability and effectiveness of Vietnam's development model, which heavily relies on private conglomerates to finance megaprojects in exchange for land and credit. This model, as envisioned by Vietnamese leader To Lam, is seen as the secret sauce for a "new era" of growth. However, the current challenges suggest that this approach may be facing unforeseen obstacles.
The project's delays and the energy crisis have broader implications for Vietnam's economic and political landscape. The successful completion of this project is crucial for Vietnam's international standing and its ability to attract foreign investment. The country's leadership must address these challenges promptly to ensure that the island's transformation is realized and that the APEC summit proceeds without significant disruptions.
In my opinion, the Phu Quoc project exemplifies the risks associated with relying heavily on private conglomerates for large-scale infrastructure development. While such partnerships can bring significant benefits, they also introduce complexities and dependencies that can hinder progress. It is essential for Vietnam to carefully manage these partnerships and address the current challenges to ensure a successful outcome for the island's transformation and the country's overall development goals.
