Da Nang leaders inspect coastal land projects after complaints about excessive land rent

On October 11, Mr. Ho Ky Minh, Permanent Vice Chairman of the People's Committee of Da Nang City, and related departments inspected two coastal land projects in response to businesses' petitions about excessively high land rents.

At the Ariyana Da Nang project of Thien Thai Hotel and Tourism Joint Stock Company - Vo Nguyen Giap Street, Ngu Hanh Son District - Mr. Le Minh Kha, Deputy General Director of the company, said that the area of ​​the project that must pay annual land rent is about 22 hectares. The land rent unit price is calculated according to the Vo Nguyen Giap street coefficient, the project currently has to pay more than 120 billion/year, an increase of more than 30 billion compared to 2018 and 2019.

Mr. Ho Ky Minh (left) during the site inspection on October 11 at the Ariyana Da Nang project

According to Mr. Kha, land rent is currently a burden for the project. While the apartment, villa, and conference center categories are the main cash flow generators, it is not enough to pay the land rent. Specifically, in 2019, the revenue of the conference center was about 1.8 million USD (equivalent to 40 billion VND), in 2023 about 1 million USD. Meanwhile, the cost of building the conference center is 450 billion. If we only calculate the area of ​​the conference center with about 2 hectares, the land rent each year is about 10 billion VND.

Mr. Kha also said that when working with the Ministry of Natural Resources and Environment , the business learned that some projects in Hanoi divided the unit price according to land use function. The construction land was calculated separately from the land for landscape, trees, and traffic. The locality was completely allowed to decide the unit price.

In addition, Mr. Kha said that the current reality in the coastal strip of Da Nang has shortcomings. Specifically, the right side of Vo Nguyen Giap Street is mostly residential land, so applying a high price is reasonable. The left side is mainly projects with large land plots, low density of use, so it is recommended to issue separate unit prices.

At the Melia Da Nang Resort project - Ngu Hanh Son district, Mr. Nguyen Manh Trung, General Director of Sao Viet Non Nuoc Co., Ltd. - the project investor, said that the current land rent is based on the 2019 land price list. While businesses are affected by the epidemic, the economy is in decline, so there is no revenue. Currently, Melia Da Nang Resort has to pay 28 billion VND per year. Meanwhile, the land used for construction has been paid once, the remaining parts for landscape functions, trees... must be rented at 70% of the commercial service land price. Mr. Trung said this is unreasonable.

Mr. Nguyen Manh Trung (right) talks about the difficulties that businesses are currently facing due to high land rents.

"Da Nang City charges too high a price for land and businesses have been petitioning for many years but have not received any response," Mr. Trung emphasized, saying that the authority to change it belongs to the city. According to Mr. Trung, the city must re-evaluate the land price to save businesses. "Don't let this entire stretch of coastline become deserted. Businesses have been milked dry," Mr. Trung complained.

According to Mr. Trung, if Da Nang City does not change the land price list, coastal businesses will likely "die young".

Receiving the opinions of enterprises, Mr. Ho Ky Minh suggested that the Department of Natural Resources and Environment consider and advise the City People's Committee. Mr. Minh also said that the City People's Committee has reported to the City Party Committee and the City People's Council. Any issues under the authority of the Central Government will soon have recommendations for adjustment.

Previously, a number of coastal enterprises sent petitions to the City Party Committee, People's Council, and People's Committee of Da Nang City, complaining about excessively high land rents. These enterprises mostly operate in the tourism sector in coastal areas of Son Tra and Ngu Hanh Son districts. Land rents increased by 300%-400% compared to the previous period while revenue was low, causing many enterprises to owe tens of billions of dong in taxes.

Source: https://nld.com.vn/kinh-te/lanh-dao-da-nang-kiem-tra-du-an-ven-bien-sau-kien-nghi-tien-thue-dat-qua-cao-20231011130944352.htm