Who wins in the war for “golden land”?

5 May
VNREIn the past, foreign invested and private run enterprises always complained that they had fewer opportunities than state owned enterprises to access business premises, however, the situation has become quite different. It is private and foreign investors who win in the war for golden land plots.

The “wind has reversed”

Nearly 10 years ago, the state owned Vietnam Coal and Mining Industries Group (Vinacomin), asked for the allocation of a land plot to build its new headquarters to replace the current head office at No 226 Le Duan, which proves to be small if compared with the big business scale of the group.

The Hanoi’s authorities once decided to allocate Vinacomin a land plot with the area of several thousands of square metres on Pham Hung Road. However, the city’s leaders later have changed their mind, giving the land plot to the South Korean investor to develop Keangnam Hanoi Landmark Tower project which is expected to become the tallest building in Vietnam. The leaders have promised to allocate to Vinacomin another land plot, larger than the one which is now the place for Keangnam’s project.

“However, Vinacomin still cannot fulfill the procedures to be able to use the new land plot. We still do not know when we will be able to remove to the My Dinh area,” a manager of Vinacomin said.

Meanwhile, private run enterprises have been developing a series of projects located on golden land areas, i.e… the land plots situated in advantageous positions. In Hanoi, Vincom is developing three projects which are all located on golden land areas, including the twin tower at No 191 Ba Trieu street, the Royal City on the 12 hectare land plot at No 74 Nguyen Trai street in Thanh Xuan district, and the “Eco city” project developed on the 37 hectare land area at No 460 Minh Khai street in Hai Ba Trung District.

In HCM City, two of the three projects on golden land areas have also fallen into the hands of Vincom. These include the land area at No 66-68-70 Le Thanh Toan and Chi Lang Park, 10,783 square meters, and the land plot at the Eden Shopping Mall, 8800 square meters.

In HCM City, Bitexco is also considered a famous real estate developer, thanks to the projects developed in the golden land areas in the center of the city, including the Ben Thanh quadrilateral zone and the Ma Lang area, with the area of 10 hectares, and the Hai Trieu – Ho Tung Mau – Ngo Duc Ke area with the area of 5300 square meters.

Experts urge to auction golden land

Nguyen Tien Vuong, Deputy General Director of Hapro, a retailer, said the biggest problem now for the retail chain is the business premises. In many cases, Hapro has to accept to lease the land parts left after private and foreign invested enterprises build new urban areas on the allocated land plots

In all big cities and provinces throughout the country, golden land plots are being scrambled by private and foreign invested enterprises to develop real estate projects.

Tien phong newspaper quoted a director of a state owned enterprise as saying, “that private and foreign invested enterprises always successfully obtain golden land because they apply very flexible mechanism.”

The director also said, “private and foreign investors dare to make heavy investments, because they have the right to do what they want with their own money. Meanwhile, state owned enterprises dare not to make heavy investments, and not every enterprise has the right to pour money into the real estate sector. Besides, investors not only need to have money, they also need to have “good relations” with the authorities.”

Dr Le Dang Doanh, a well known economist in Vietnam, said that there still lacks a transparency in land allocation.

“It is not important who has the right to develop projects on golden land areas, private, foreign invested or state owned enterprises. The most important thing is that the land allocation must be carried out in a transparency: those, who pay high in the auctions, will have the right to use the golden land,” Doanh said.

Source: VNN/Tien phong

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