Heartbreaking: Hundreds of billions of dong apartment project 'frozen' for 6 years in Ho Chi Minh City

DỰ ÁN CĂN HỘ - Ảnh 1. — Binh Dang commercial service - apartment project "froze" after completing the basements and finishing the construction of the ground floor - Photo: NGOC HIEN

Every month, the investor of the Binh Dang commercial service - apartment project (District 8, Ho Chi Minh City) has to pay about 1 billion VND in bank interest, and has so far generated more than 51 billion VND in interest while the project is stuck in administrative procedures, causing financial difficulties for the business.

"Shelving" the golden land apartment project

For nearly 6 years, after completing the basements and also completing the construction of the ground floor according to the construction permit, the Binh Dang commercial service - apartment project was forced to temporarily stop construction from July 2019 until now.

Tuoi Tre Online 's observations at the project show that inside the corrugated iron fence surrounding the project is a construction site littered with equipment left behind by contractors after many years of non-construction. The project's four-sided campus, located in a "golden" location, is also surrounded by shabby shops, which have become temporary parking lots. The once bustling construction site is now a desolate scene with only security guards watching over the project and its equipment.

Leading us to the construction site, Mr. Nguyen Hoang Minh - Deputy General Director of Saigon 5 Real Estate Development Joint Stock Company (Saigon 5 Company) - expressed his sorrow that both capital and assets of the State and enterprises have been left exposed to the sun and rain for years, which is a waste.

Explaining the reason for the suspension of the second phase of the project, a representative of Saigon 5 Real Estate Company said that there were two problems that caused the project to stall. First, because this was an equitization, there were problems with the valuation of the enterprise.

This led to the fact that the name of the land-using unit has not been updated to Saigon 5 Company from Saigon 5 Construction and Trade Company Limited. After many meetings to resolve the issue, by June 2024, the name of the new land-using unit on the red book was updated.

Although the name on the red book had been updated, when the enterprise submitted the application for a construction permit for phase 2, it encountered problems. The Department of Construction requested to contact the People's Committee of District 8 to update the 1/2,000 planning and contact the Department of Planning and Investment to adjust the progress in the decision to approve the project investment because the project was 6 years behind schedule while the initial approval was only 2 years.

DỰ ÁN CĂN HỘ - Ảnh 2. — For the past 6 years, the project has been "shelved" while businesses are eagerly waiting for procedures and people are hoping to have a house - Photo: NGOC HIEN

According to documents of the Ho Chi Minh City People's Committee, from the end of 2024 until now, the City People's Committee has issued 4 documents to remove obstacles for the project, assigning specific tasks to departments and the People's Committee of District 8, and extending the completion time to November 10, 2024, November 30, 2024, December 10, 2024, and April 15, 2025, respectively.

"Up to now, nearly 7 months have passed, but the documents related to the granting of construction permits for the main part of the Binh Dang project have not been resolved by the departments and branches according to the direction of the Standing Committee of the City People's Committee," the business informed.

Having to pay 1 billion VND in interest every month, the business is financially exhausted.

Saigon 5 Real Estate Development Joint Stock Company is a member unit of Saigon Real Estate Corporation with the state capital holding 99.78% of charter capital, equivalent to more than 362 billion VND.

In previous documents to resolve difficulties with this project, the leaders of the City People's Committee requested to promptly resolve difficulties for businesses and avoid losses of state capital because Saigon Real Estate Corporation is a 100% state-owned enterprise of Ho Chi Minh City.

Mr. Nguyen Hoang Minh said that the company had invested more than 260 billion VND in the project. Due to the project being suspended, the bank interest alone was up to 51.3 billion VND, and each month the company had to pay up to 1 billion VND in interest.

"Increased costs due to material and labor price fluctuations, and costs arising from construction delays greatly affect project investment efficiency, causing waste of state capital at the company," said Mr. Minh.

276 apartments with unknown handover date...

Binh Dang project is built on a land area of 4,606m² with an initial total investment of about 579 billion VND, including a 5-storey commercial - service area, a 14-storey residential area and a basement for parking. The project is expected to provide 276 apartments to the market.

Besides, Mr. Minh said that the business has no products to sell, resulting in no revenue, causing financial difficulties for the business.

"The company has been losing liquidity, has no cash flow to pay salaries to employees and repay bank loans, bank loans have become bad debts, and there is a possibility that the bank will have to seize assets to recover the debt," said Mr. Minh.

According to the leader of this enterprise, from a 100% state-owned company that has been operating effectively with high revenue and profit, and stable development for over 30 years, but since transforming into a joint stock company, all production and business activities of the company have stagnated.

All of the company's projects under the equitization plan approved by the City People's Committee could not be implemented due to problems in land valuation, enterprise valuation and prolonged conversion settlement.

This makes the lives of party members and workers very difficult, many key officials and party members quit their jobs, and state capital in the company is not preserved.

"We just hope that the authorities will soon resolve administrative procedures, helping the project to restart soon," Mr. Minh suggested.

Urgently handle backlog projects

In the Prime Minister 's telegram No. 112 on focusing on resolving backlog projects, stopping construction, urgently implementing, completing, and putting into use to prevent waste and loss, the Prime Minister requested to effectively use resources and quickly deploy works and projects.

In particular, the Prime Minister requested to avoid waste and loss, especially in backlogged projects, projects that have stopped construction, investment projects in production and business at corporations and state-owned companies...