Suspended land projects in HCMC urges land law adjustment

Ho Chi Minh City has witnessed a significant architectural growth, turning it into a more modern mega city. However, there still exist hundreds of suspended land projects that have negative impacts on land management performance. In order to handle inadequacies and overlaps of the current land law and better answer the development demands, it is necessary that the Government review and adjust the 2013 Land Law.

Binh Quoi – Thanh Da urban area project with a surface area of 426ha has been suspended for 28 years. (Photo: SGGP)


In Xuan Thoi Thuong Commune of Hoc Mon District, there is a planned industrial park project that has not been launched for the last 10 years. Besides certain lots used to grow short-term crops, most parts are wastefully left uncared. Huynh Van Thanh, an investor of over 5,000m2 in this project complained that he wished to change the land use from crop growing to residential purpose but could not because of the project suspension status.

Lately, HCMC People’s Committee has submitted to the Prime Minister a request to remove this planned industrial park and two others, namely Bau Dung and Phuoc Hiep, from the planning. 10 years have passed but these projects still attract no enthusiastic investor, nor do they have any land retrieval policy or clear planning procedure. This has severely affected citizens living in the neighboring area as it is so difficult for them to repair, give a way, or sell their properties.

Facing a similar state is 200-ha Hiep Phuoc industrial park project sited in Trung Lap Ha Commune and Hiep Phuoc Commune of Nha Be District. Anh Sang Chung Investment JSC earned an investment permit in 2010, but did not do anything until 2017, when the HCMC Export Processing and Industrial Zones Authority (HEPZA) retrieved this permit.

The 38-ha resettlement project in Tan Thoi Nhat Ward of District 12, introduced 20 years ago yet still in the land clearance and compensation stage.

Another suspended land project is the 38-ha resettlement project in Tan Thoi Nhat Ward of District 12, introduced 20 years ago yet still in the land clearance and compensation stage. As a result, the vacant land turns to be an ideal location for social criminals and illegal trash dumping. There are some finished residential buildings and grounds here also left unused without a clear reason. Remarkably, since the land compensation stage has lasted too long, the compensation rate is outdated, making it nearly impossible to finish the task.

Other suspended projects around HCMC are Binh Quoi – Thanh Da urban area project (with a surface area of over 426ha) in Binh Thanh District and International University urban area (nearly 1,000ha) in Hoc Mon District.

Statistics from HCMC Real Estate Association (HoREA) reveal that since 2015, there have been 126 suspended land projects unable to launch due to the content of Section 1 and Section 4 in Article 23 of the 2014 Housing Law that 100 percent of the land must be of residential purpose, which means agricultural or non-agricultural land cannot be used.

In reality, however, most planned land for projects is a mixture between residential and agricultural purposes. To invest in a land project, many businesses have to prepare a large capital amount, yet because of this regulation, they cannot start the project, and their capital is inefficiently stuck there.

Experts in the field calculated that if investors of those 126 projects applied for a loan of 70 percent of the total invested capital (at around VND88,000 billion or US$3.9 billion) with an interest rate of 10 percent per year, they would have to pay VND44,000 billion ($1.95 billion) for the past 5 years. This sum would be included in the selling price of the future house, leading to an unreasonably high price for house buyers. The Government, meanwhile, cannot earn revenues from tax as the projects are suspended.

Aware of this, the Government has issued Decree No.148/ND-CP to specifically address this matter. Vice Chairman of HCMC People’s Committee Le Hoa Binh informed that this October, the municipal authorities are going to deliver detailed instruction on how to unfreeze such land projects under its responsibility.

Deputy Director of the HCMC Department of Planning and Architecture Truong Trung Kien emphasized a fact that there are investors trying to obtain a project permission then transfer it for profit via shares selling to hold management rights. There are also investors purposely prolong the project implementation time since the added value of land is quite large, making project transfer for profit a lucrative action.

HCMC is aware of this and has retrieved hundreds of project permits due to their long suspension time or infeasibility. In 2020, it retrieved the permits of 61 suspended projects.

The good news is, according to former Head of HCMC Institute for Planning Hoang Minh Tri, the city has enjoyed a significant improvement in urban development. Thanks to focused investment from both domestic and foreign sources in key construction projects like the building of Vo Van Kiet Street, Pham Van Dong Street, Phu My Hung urban area, Trung Son residential-university area, the residential area near Binh Dien Commercial Center, HCMC has shaped itself into a more modern mega city.

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