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Government leaders have asked MoF to submit a list of 60 real estate projects in ten cities and provinces to the Government Inspectorate for investigation under the 2017 schedule approved by the prime minister.
The 60 real estate projects or land plots on the list were formerly managed by state-owned enterprises, and were approved to change the land use purposes between July 2014 and November 2016. After the changes of land use purposes, the plots were used to implement major projects. The land use or lease fees the developers pay is far under the market value, resulting in losses to the state budget.
Notably, on this list sent by MoF, Hanoi has the largest number (25) of real estate projects referred for inspection, belonging to companies such as Vietnam Investment and Consulting Investment Joint Stock Company, Song Nhue Investment Development Irrigation One Member Company Limited, Ngoi Nha Moi Trading Joint Stock Company, Thang Long Bridge Joint Stock Company No.1, and Hanoi Construction Investment Company No.2.
In addition, the ministry also requested similar investigations against several companies, such as Centre of International Relation & Investment Joint Stock Company, Vinaconex Urban and Housing Development Investment Joint Stock Company, Hanoi Housing Investment Development Joint Stock Company 5, Seaproduct Joint Stock Company Region No. 1, Hateco Hanoi Joint Stock Company, Transport Engineering and Development Investment Joint Stock Company No.208, Salt Transport Joint Stock Company, Chemical Joint Stock Company, Nam Thang Materials Production and Construction Investment Shareholding Company and Vietnam Pharmaceutical Corporation.
Projects coming under investigation in Hanoi
Newhouse Xa La in Hadong district
The Newhouse Xa La project was invested by a partnership of Song Nhue Investment Development Irrigation One Member Company Limited and Ngoi Nha Moi Trading Joint Stock Company.
The project was implemented on a total area of 10,553 square metres, formerly managed by Song Nhue Investment Development Irrigation One Member Company Limited. Its land use purpose was converted into low-rise residential buildings, as well as trade and service apartments.
The purpose of 3,539sq.m of the total land area was changed for ‘other purposes’, while the remaining 7,014sq.m kept their initial purpose. This project is said to owe more than VND27 billion ($1.28 million).
The price of the land after changing the purpose of use increased by 30 per cent.
La Casa Villa at 25 Vu Ngoc Phan, Lang Ha ward, Dong Da district
La Casa Villa was formerly managed by the Institute of Technology, which later transferred it to Ritm-Mekong Investment Company Limited, after which it was changed into a complex of low-rise houses and kindergartens.
The project covers a total area of 6,362sq.m. 3,536sq.m saw the land use purpose changed, while 2,826sq.m were unchanged.
Notably, this project was pelted by accusations of causing damage to houses around the project site. Concurrently, Ritm-Mekong Investment Company Limited started constructing the project without receiving approval of the construction method. During the construction progress, building materials and other waste was dumped in the surrounding around area, causing environmental pollution.
The price of the land after changing the purpose of use was VND56.2 million ($2,500) per sq.m, 1.44 times as much as before.
Pandora at 53 Trieu Khuc, Thanh Xuan district
The Pandora project at 53 Trieu Khuc was initially managed by Vietnam Motors Corporation (VMC) on a total area of 44,024sq.m. The investor changed the land use purpose of 18,896sq.m to house high-rise and low-rise buildings.
VMC still owes more than VND145 billion ($6.88 million) for changing the land use purpose.
The price of the land rose to more than VND35million ($1,563) per sq.m after the change in purpose, 68 per cent higher than before.
Hanoi Centre Point in Thanh Xuan district
Hanoi Centre Point was formerly managed by Hanoi Construction Investment Company No. 2 (Hacinco) and Thanh Xuan Electric Company Limited on the 3.7 Cc Plot in Le Van Luong Street. Then, part of the total area was changed to construct a residential, trade, and services complex for sale.
The price of the land after changing the purpose of use was VND99.6 million ($4,450) per sq.m, the highest among all the projects listed here. Besides, Hacinco is also facing a series of accusations over its equitisation.
Capital Garden at 102 Truong Trinh, Phuong Mai ward, Dong Da district
FORMACH Joint Stock Company is the developer of Capital Garden. This project covered a total area of 5,098sq.m. The plot was converted into a commercial centre, offering offices and high-end apartments for sale and lease.
The price of the land increased by 42 per cent after converting the purpose, to VND28.6 million ($1,277) per sq.m.
536A Minh Khai in Hai Ba Trung district
The 536A Minh Khai project is located in a small alley in Minh Khai Street, directly under the foot of Vinh Tuy Bridge. The project is owned by Vinaconex Urban and Housing Development Investment Joint Stock Company.
The project was changed into apartments and low-rise buildings after the owner’s equitisation. Due to the narrow road, observers were befuddled over how the investor managed to transport construction materials.
The land price of the 536A Minh Khai project was VND45.29 million ($2,023) per sq.m after changing the purpose.
662 Minh Khai project in Hai Ba Trung district
Not far from the 536A Minh Khai project, 662 Minh Khai is also to come under investigation.
This project was managed by Hanoi Housing Investment Development Joint Stock Company 5, which converted it into residential areas, offices, kindergartens, and elementary schools.
The land price after the transfer was VND37.85 million ($1,691) per sq.m.
Detached-house project at Phung Khoang Street in Trung Van ward, South Tu Liem district
The project was invested by Nam Thang Materials Production and Construction Investment Shareholding Company.
Its basic construction is almost finished. Its land price after the change of purpose is VND19.28 million ($861) per sq.m.
Hateco in Yen So ward, Hoang Mai district
Hateco’s developer is Hateco Hanoi Joint Stock Company. Its land price after the change of purpose is about VND24.28 million ($1,084) per sq.m.
Rivera Park at 69 Vu Trong Phung, Thanh Xuan district
Rivera Park was initially invested by Vietnam Joint Stock Company For Restoration Of Monuments and Cultural Equipment (Vinaremon). Vinaremon entered into a cooperation with Long Giang Land.
The project was converted into a commercial-residential complex, including trading units, service centres, offices, and houses. The project was criticised because it was lagging behind schedule and amassed a hefty debt in land tax and other unclear sources.
Due to capital shortage, Long Giang Land asked Vinaremon to mobilise capital from its staff who wanted to buy apartments in this project.
The land price after the change was more than VND46 million ($2,055) per sq.m.