What do investors say about being 'stuck' in the nearly 800 billion VND project?

For over a year, there has been no land valuation, and the project remains stalled.

The Bac Pho Chau 1 urban residential area project covers a total area of over 10 hectares, with a total investment of nearly 800 billion VND. It is being implemented under the form of state land acquisition and compensation for site clearance. The investor implementing the project is Hano-vid Real Estate Joint Stock Company (Hano-vid). Hano-vid was approved by the People's Committee of Ha Tinh province as the project investor according to Decision No. 1921/QD-UBND dated June 22, 2020.

Nhà đầu tư "mắc kẹt" tại dự án gần 800 tỉ đồng ở Hà Tĩnh - Ảnh 1. — Many rows of houses have had their basic structures completed.

The project implementation contract No. 05/2020/HĐ-ĐTDA dated November 11, 2020, between the People's Committee of Ha Tinh province and Hano-vid stipulates that the investor must fulfill its contractual obligations, including completing the advance payment of compensation and land clearance costs; paying taxes to the state budget; and investing in the construction of the project in accordance with the terms signed between Party A and Party B, before June 7, 2022.

However, after the contract expired, the investor had not yet received the land, preventing construction from proceeding. Both parties were forced to extend the contract for another 18 months, with a clause specifying the extension period starting from the date the investor receives the land on-site.

In Notice 284/TB-UBND issued by the People's Committee of Ha Tinh province at the briefing meeting on July 18, 2022, the province agreed to "assign the Department of Natural Resources and Environment of Ha Tinh province to base its actions on the data proposed for land allocation and lease mentioned above and the existing project documents, to carry out the procedures for determining the specific land price of the project in a timely manner and in accordance with regulations; complete and submit to the Provincial People's Committee for approval the specific land price simultaneously with the land allocation and lease for the project before August 30, 2022".

But more than a year has passed since then, and no land valuation has been issued. The investor is still unable to utilize the property.

Delays in land handover due to unclear regulations.

According to Hano-vid, after signing the project contract, the investor coordinated with the People's Committee of Huong Son District to complete the payment of compensation and support for land clearance, and the People's Committee of Huong Son District submitted Proposal No. 21/TTr-UBND dated February 17, 2022, requesting the Provincial People's Committee to allocate land and lease land for the investor to implement the project.

Nhà đầu tư "mắc kẹt" tại dự án gần 800 tỉ đồng ở Hà Tĩnh - Ảnh 2. — The Bac Pho Chau 1 urban residential project covers a total area of over 10 hectares.

The Department of Natural Resources and Environment of Ha Tinh province has also assessed and confirmed that the conditions are met and advised the Provincial People's Committee to allocate and lease land to the investor to implement the project in Submission No. 1721/STNMT-DD22 dated May 24, 2022.

However, the People's Committee of Ha Tinh province stated that "for the time being, land allocation and leasing for the project will not be implemented as requested by the Department of Natural Resources and Environment in Document No. 1721/STNMT-DD22 dated May 24, 2022, because the project does not yet have a specific land price" (excerpt from Notice No. 284/TB-UBND dated July 18, 2022).

The differing viewpoints between the Department of Natural Resources and Environment and the People's Committee of Ha Tinh province have left the investor in a difficult situation. The investor has actively coordinated with relevant local agencies to clear the land and submitted requests for land allocation for the project, but has still not received the land.

In fact, Hano-vid has already brought in contractors for construction. To date, Hano-vid has not profited at all from the project land for which the People's Committee of Ha Tinh province has approved the investor. Recently, the People's Committee of Huong Son district submitted a proposal to the People's Committee of Ha Tinh province requesting administrative penalties against this investor.

In response to this issue, a representative from Hano-vid acknowledged violations in the construction phase before land allocation, but stated that the company would continue working with authorities regarding penalties, citing various objective factors stemming from the delayed land allocation that significantly impacted the company's business operations.

Prior to Decree 10/2023/ND-CP amending and supplementing some articles of the decrees guiding the implementation of the Land Law on April 3rd, there was a reality in the process of handing over land to investors where each locality applied a different method: some places required land valuation before handing over, while others did the opposite.

This has also caused considerable difficulties for investors, with the Bac Pho Chau 1 residential area project being a prime example. The newly issued Decree 10 has helped resolve the bottleneck in many projects by stipulating that land prices cannot be determined for projects that have not yet undergone land allocation or leasing. Hopefully, this will "unleash" investors in receiving land and allow them to quickly begin business operations.

For over a year, there has been no land valuation, and the project remains stalled.

Delays in land handover due to unclear regulations.

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