Industrial park operator blocks HCMC factory over rent payment dispute

For over a month, the façade of Viet Sinh Co. Ltd's factory, which specializes in producing heating resistors in Tan Tao IP, had been covered with barriers and four fire trucks.

It was not until Friday morning that Tan Tao Investment and Industry Corporation (ITACO), the IP operator, agreed to remove the fire trucks. As regulated, an IP operator is allowed to keep fire trucks to prevent any possible fire accidents.

However, the barriers remain in place and ITACO even deploys a security team to restrict people from entering the company.

With its facility blocked, Viet Sinh has been forced to stop operations, leaving its 80 workers jobless since mid-January.

Fire trucks and barriers are placed in front of Viet Sinh Co. Ltd’s factory on the night of February 2, 2023. Photo by VnExpress/Dinh Van

Nguyen Thi Thanh Thuy, Viet Sinh’s director, said ITACO has been blocking the company to demand a debt on renting the premises.

In 2007, Viet Sinh signed a contract to rent a plot of 3,000 square meters in Tan Tao IP with ITACO for 50 years at VND5 billion (US$213,051). The company had finished paying that sum.

However, in 2011, ITACO requested that Viet Sinh must pay a fee to maintain the factory since 2009.

By late last year, ITACO announced the maintenance fee had climbed to VND513 million plus an interest rate of VND526 million, said Thuy.

"We can afford the sum as requested by ITACO but it is not reasonable," Thuy said.

As the two parties disagreed on the payment, ITACO decided to block Viet Sinh’s facility.

Nguyen Thanh Phong, general director of ITACO, said the two companies had worked with the HCMC Export Processing and Industrial Zones Authority (HEPZA) and will not respond further to the media.

The factory of Viet Sinh Co. Ltd is barricaded on February 3, 2023. Photo by VnExpress/Dinh Van

Tran Viet Ha, deputy head of HEPZA, said first of all, the contract between Viet Sinh and ITACO clearly stated that the payment has yet to include VAT.

However, Viet Sinh had only paid the rent to ITACO and did not pay any VAT while ITACO had already paid the tax to the government.

Secondly, Viet Sinh did not pay any fee for maintaining its facility at Tan Tao IP for more than a decade because ITACO failed to make it transparent in the first place.

However, the maintenance fee is mandatory and ITACO had made public all information on how the fee was spent at its headquarter, Ha said, and added that HEPZA had inspected the use of that fee.

He said in order to settle the dispute between them, HEPZA suggested ITACO removes the interest rate imposed on the late payment and ITACO has agreed.

However, Viet Sinh still refuses to pay the maintenance fee.

"If the two sides could not reach any agreement, the case will be brought to court," said Ha.

Local authorities in Binh Tan District have requested ITACO to remove the barriers after it had sent the fire trucks away.

They said the two companies must sit down together for negotiation and ITACO does not have the right to cause pressure by blocking Viet Sinh's factory.