Revealing wrongdoings in land valuation at Park City Project
A recent investigation into the Park City Project, developed by the Vietnam International Urban Development Corporation (VIDC), has uncovered irregularities in the determination of financial obligations. The relevant authorities in Hanoi are currently taking action to address this issue.
The Park City Project: Background and Location
The Park City Project is located in the La Khe and Yen Nghia wards of Ha Dong district, Hanoi. Previously, this area was part of the Yen Nghia commune and La Khe ward under the administration of the former Ha Tay province.
Legislative Background
In May 2008, the National Assembly approved Resolution 15/2008/QH12, which adjusted the administrative boundaries of Hanoi and certain related provinces. This resolution merged the entire natural area of over 219,341 hectares and a population of over 2.568 million from Ha Tay province into Hanoi city.
Prior to that, on July 3, 2008, the People’s Committee of the former Ha Tay province issued Decision 2011/QD-UBND, granting 772,275.2 square meters of land to VIDC for the implementation of the Park City Project.
Land Valuation and Financial Obligations
Based on the interdepartmental submission dated July 17, 2008, which involved the Departments of Finance, Natural Resources and Environment, Construction, Planning and Investment, and the Tax Department, as well as the People’s Committee of Ha Dong district (now Hanoi), the People’s Committee of the former Ha Tay province issued Decision 2926/QD-UBND on July 28, 2008, approving the land use fees for the Park City Project.
The total value of land use rights with completed infrastructure was estimated to be over VND 1,910.5 billion. This included land for townhouses (103,353 square meters) valued at VND 8.1 million per square meter, equivalent to over VND 837.1 billion; land for villas (58,603 square meters) valued at VND 7.695 million per square meter, equivalent to over VND 450.9 billion; land for apartments (154,341 square meters) valued at VND 3.6 million per square meter, equivalent to over VND 540.1 billion; and land for commercial services (30,925 square meters) valued at VND 2.6 million per square meter, equivalent to over VND 82.2 billion.
The total investment cost for the project, as determined by the relevant authorities at that time, was over VND 1,138.9 billion, including compensation costs and support for land clearance based on the appraisal by the consulting unit and the proposal from the investor, amounting to over VND 246.3 billion.
After offsetting these costs, VIDC was required to pay the remaining amount of VND 771.6 billion for the land use rights. According to confirmation from the Ha Dong Tax Department in Document 189/CCT/KK-KTT dated February 12, 2010, VIDC had already paid this amount to the state budget.
However, it was not until December 2016 that the Hanoi Department of Natural Resources and Environment handed over the land boundaries of the Park City Project to VIDC.
Recalculating Financial Obligations
In a recent document, the Hanoi Department of Natural Resources and Environment cited three legal bases for determining the financial obligations of the Park City Project. These are Section B, Clause 1, Article 4 of Decree 84/2007/ND-CP dated May 25, 2007, issued by the Government; Section B, Clause 1, Article 20 of Decree 45/2014/ND-CP dated May 15, 2014, issued by the Government; and Clause 3, Article 108 of the 2013 Land Law.
According to the Hanoi Department of Natural Resources and Environment, “the determination of the financial obligations in July 2008, when the project had not yet cleared its land, was not in line with the regulations.”
Based on this, the department has requested the Hanoi People’s Committee to allow for the reevaluation of financial obligations (if any) due to the adjustment of planning. They also suggest reviewing and determining the land use fees at the actual handover of the land in December 2016, when the land clearance was completed and the land was transferred according to regulations.
With the revised land valuation in December 2016, the discrepancy in land prices compared to the valuation by the former Ha Tay province in late July 2008 could be substantial, potentially amounting to hundreds of billion dong. Apart from the additional financial obligations, this also raises questions about the responsibility of state management agencies and parties involved.
According to a source from the Cong Thuong newspaper, on December 28, 2023, Mr. Nguyen Anh Quan, Deputy Director of the Hanoi Department of Natural Resources and Environment, issued Decision 1402/QD-STNMT-KHTC, approving the plan to select a consulting firm to determine the land prices of several projects, including the Park City Project.
The following day, on December 29, 2023, Mr. Nguyen Anh Quan signed Decision 1415/QD-STNMT-KHTC, approving the selection of Vietnam Valuation and Financial Services Corporation (VVFC) as the implementing unit. The implementation is expected to be completed within three months.
The Hanoi Inspectorate has recently requested the Hanoi Department of Construction and the Hanoi Department of Finance to report and provide related documents regarding the implementation of the Park City Project.
This action follows the plan set out in Directive 5737/KH-TTTTP dated November 14, 2023, by the City Inspectorate, regarding the implementation of Directive 320/KH-UBND dated October 5, 2023, by the Hanoi People’s Committee, which is related to the implementation of the Central Steering Committee’s conclusions on anti-corruption and anti-negative phenomena. The plan includes a review of compliance with regulations on the management and use of state assets and land at the Park City Project.