No solution in sight for under-evaluation of public land in Vietnam

By Anh Minh   May 29, 2018 | 07:47 pm PT
No solution in sight for under-evaluation of public land in Vietnam
The land lot of nearly 6,000 square yards on Le Duan Street in District 1, Ho Chi Minh City. Photo by VnExpress/Nhu Quynh
Some prime plots were not listed among assets of state-owned firms before equitization.

The Finance Minister’s admission that authorities have been unable to control the under-evaluation of land by equitizing State-owned Enterprises (SOEs) indicates the problem is not likely to be solved any time soon.

Minister Dinh Tien Dung told the National Assembly on Monday that control over land use after equitization needs to be tightened and it should be ensured that land is evaluated according to their market price.

“But we haven’t been able to do that, so it’s unclear whose responsibility that is and there is a lack of transparency,” Dung said.

He was echoing the concerns of several MPs who have raised at the ongoing parliamentary session that many public land lots in Vietnam have been evaluated at much lower than market prices in a fraudulent attempt line the pockets of officials in cahoots with private investors.

The land was being valued directly without going through the bidding process as required by Vietnam’s Land Law, resulting in loss of government assets, said MP Hoang Van Cuong.

Tran Van Minh, another MP, said many individuals and organizations have been able to obtain public land after the equitization of state-owned businesses because land was not included as an asset in their evaluation. In such cases, “they buy a business after equitization with the main purpose of benefiting from the golden public land of those businesses,” Minh said.

Other MPs also said that the valuation process was being easily manipulated to ensure bare or even fake compliance with the law, making it a meaningless exercise.

An example of grossly incorrect valuation happened in Ho Chi Minh City in 2007, when a land lot of nearly 5,000 square meters (nearly 6,000 square yards) at 8-12 Le Duan Street in District 1 was designated to be developed into a five-star hotel and commercial center complex.

Municipal authorities should have carried out a bidding process to select a prestigious and experienced investor, instead they formed a joint stock company in 2010 to carry out the project, following requests from the Ministry of Industry and Trade, whose units were renting the lot, according to recent inspection results released by the Government Inspectorate.

In 2011, the municipal Finance Department had valued 3,400 square meters (4,000 square yards) of land at 8 Le Duan at VND621.7 billion ($27 million). However, according to inspectors, this land has a special position in the city with three facades and is close to central roads of the district, and carried a much higher value.

The inspectors blamed the department for not having their valuation passed by higher authorities before finalizing it, causing a huge loss to the national budget. The current value of the land is at VND2,000 billion ($87.1 million).

Efforts are on now to repossess the land.

The Prime Minister recently ordered that all “golden” public land lots valued at cheap prices are investigated, said Tran Hong Ha, minister of Natural Resources and Environment.

“When inspectors find out where the mistakes were made, they will be dealt with accordingly,” he said, without elaborating what specific actions would be taken.

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