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When The Golden Land Turns Into “Gold”

Golden Land

Many land plots in Ho Chi Minh City have good locations such as “golden land” planned or implemented for project investment, but for many reasons they have been used incorrectly, which causes the great waste.

Even the golden land plots have been invested for a long time, but the investors have run, which makes the face of the largest city more sluggish.

Golden land … to keep the car

In some central districts such as District 1, District 3, there are many thousands of square meters of land left vacant for many years, even many unfinished construction projects have been degraded. Specifically, BIDV Tower is invested by the Bank for Investment and Development of Vietnam (BIDV), which owns a prime location at 117-119 Nguyen Hue Street, District 1 with an area of 2,724 sqm approved construction.

According to the plan, the building is 40 stories in height, but this project has been inactive for more than 8 years and now all of the land is being kept. According to the land price list of the city, if the coefficient K, Nguyen Hue Street is less than $9,100 / sqm, the land price has been transferred up to $45,500 / sqm.

Similarly, the land is located in front of Le Duan – Hai Ba Trung Street, the area belonging to the most expensive class in Ho Chi Minh City is used as parking lot. This land was formerly the headquarters of some agencies and enterprises of the Ministry of Industry and later recovered to invest in the Lavenue Crown Project, a joint venture between Kinh Do Joint Stock Company and Ho Chi Minh City Housing Management Co., Ltd and Mayflower Investment contributing capital investment. Currently, although outside has been enclosed with the majestic project images, inside there is no sign that the project has been deployed.

See more: Vietnam Real Estate News

Or 5,000 sqm of land at 27B Nguyen Dinh Chieu, District 1, is managed and operated by Vietnam Airlines Corporation (VNA). In 1994, VNA and S.M.I. Travel Co., Ltd (Thailand) established a Joint Venture Company of Vietnam Airlines Hotel to implement the project of 4-star hotel business meeting international standards. The project stagnated until 1998 stopped. By the end of 2000, S.M.I. Travel Company Limited had fled and transferred the capital contribution to VNA, ended the joint venture. After many years of being abandoned, now the land is rented by IMG to the ground floor, parking lot and coffee shops waiting to be rebuilt.

Golden Land
Great location of the project

Not only wasting the golden land, the “golden project” is also wasted. It is Saigon One Tower project at 7-9 Ton Duc Thang Street, District 1, which was started in 2009 and expected to be completed in 2011, but it has just completed the crude construction and stopped until now although it is located in a very beautiful position, opposite to Ba Son, which is now exploited by Vingroup. It is known that the project is invested by Saigon M&C Real Estate Joint Stock Company with a total investment of $256 million with 41 stories, offices and apartments for lease.

By the end of 2014, the Ho Chi Minh City People’s Committee has instructed the Department of Construction to coordinate with the Department of Planning and Architecture, the Department of Natural Resources and Environment and the City Inspectorate to work with the investor. The bridge will speed up the construction progress to put the construction into use by the end of 2015. But so far, the construction has been almost unmoving.

Loss of state budget

In the face of wastefulness, which results in large losses of state property in gold lands, the Ministry of Finance has proposed and the Government has approved the inspection of 60 cases of land in prime locations of state-owned enterprises, then moved to apartments and commercial centers. In Ho Chi Minh City, the Ministry of Finance has more than 10 projects.

For example, Southern Rubber Industry Joint Stock Company at 504 Nguyen Tat Thanh, Ward 18, District 4, converts 4,785 sqm of land for business to commercial buildings and services. According to the decision approving the land price charged for financial obligations when changing land use purpose, the City People’s Committee has approved the land price of this project is $2,310/sqm, but the whole more than 4.785 sqm only cost over $4,690,000. Or the commercial office service and apartment project at 128 Hong Ha, Ward 9, Phu Nhuan District, has converted 4.300 sqm of land for business to commercial services and apartments with land price of only $1,290/ sqm …

According to many experts, it has happened this situation because many years of land allocation, distribution of land use rights and valuation to collect land use fees are many inadequacies. The determination of land prices depends too much on the local government agencies and units, not by an independent and objective agency. The pricing information is not public, so it is not known whether the land price has a reference to the market price or another way of valuing it although there is a land evaluation council.

Meanwhile, in order to clarify the pricing, it must let the market determine itself, the buyer of the seller will give a satisfied price. Price appraisal councils only play the role of researching and surveying to set the starting price. Then, the trading floor will hold auctions so that buyers and sellers negotiate reasonable prices, the most market prices. Mr. Dang Quyet Tien, Deputy Director of the Enterprise Finance Department, Ministry of Finance, said that projects on gold land do not auction land use rights when changing the purpose of use is in violation of Land Law. Accordingly, land for conversion purposes must be auctioned, re-determined land prices according to market prices and it cannot be based on local prices. Golden land abandoned by the investment spread, the illusion investors will profit greatly, but when the bubble burst failed to hand in time. Subsequently, the bank mortgage project becomes bad debt, financial insecurity, resulting in unfinished, long project no way out. TS. Nguyen Tri Hieu, a finance and banking expert, said that in order to avoid the situation of covering the land, the first thing banks must jointly participate in restructuring the project financed with lower interest rates to bring prices down. Ho Chi Minh City should transfer the project freely, openly and transparently, which will find the right investor that collects taxes. In the long run, it should be held bidding for the use of gold land, enterprises have enough new resources, the budget will be large sums of money, which avoids the situation of occupied land and then abandoned gold, which makes the central face Ho Chi Minh City Department of Construction report that the results of reviewing and processing projects licensed but delayed in the center of the city show that out of the 505 projects issued the building permit between 2004-2014 and 1 works has been licensed since 1996 (of the 11D Thi Sach Sai Gon Commercial Center and Apartment Complex). Projects in the center of District 1 and District 3 are delayed, 30 projects have not started, 14 projects are in progress. The Department of Construction said that 30 projects have not started yet. The construction license has expired. Ho Chi Minh City is determined. Mr. Le Hoang Chau, Chairman of HoREA said that since 2007, the People’s Committee of Ho Chi Minh City has planned 20 lots of golden land (about 50 ha) in the center to call for potential investors. However, the land owned by gold has only four investors implemented the project or prepared to put into operation. The remaining large lands, located in the prime locations over the past 10 years, have not started. These lands are rented by the owner as parking or used for other purposes, which causes waste to society. In fact, under the drastic direction of the city, from the end of 2016, there are projects to capture head off. The land of 1 bits and 1 double Nguyen Dinh Chieu (District 1) has been fenced construction, and it is currently building the foundation.

Golden Land
Old buildings are renovated thanks to prime location

Due to the pressure of the city, on December 2nd, 2016, the investor of the SJC Tower project is located on 4 sides of Le Thanh Ton – Nam Ky Khoi Nghia – Le Loi – Nguyen Trung Truc Street (District 1). Groundbreaking ceremony after 10 years of “blanket”. However, after this ceremony, the gate to the project is closed, inside there is only one dig. One of the leaders of the Department of Natural Resources and Environment said that the delayed gold land has many reasons such as inspection, conversion purpose … In order to speed up the projects on golden land, recently Ho Chi Minh City Vice Chairman Le Van Khoa has directed the review and handling of projects that have been licensed but delayed. Specifically, for projects under construction, the city assigned the Department of Construction to notify in writing to the investor requesting to quickly implement in accordance with the content of the construction license issued within 6 months since receipt of the notice too soon complete the works put into use. If it is over the time limit, the investor will not re-deploy the project, the provincial or municipal Construction Service will sanction administrative violations strictly according to the current regulations. The city leaders have also directed the departments concerned to require the investor to focus on the project too soon complete the works putting to use; not approving new investment for the investor that has not completed the project. For projects that are leasing food business, keeping vehicles … city assigned Department of Planning and Investment, People’s Committees of Districts to review and withdraw business licenses granted, refuse to grant or extend post license of business in these locations.

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