Public land neglected, used for profit

July 25, 2009
A famer cuts grass for cow feed at an unused land plot managed by the state-run Sinco Machinery Company under the Saigon Industry Corporation.

State-owned companies in Ho Chi Minh City have been using public land for profit and neglecting other valuable real estate for years, officials from the municipal People’s Council have said.

The Economic and Budget Committee, which operates under the People’s Council – the local legislature – inspected land use and management at state-run firms in District 8 and Binh Tan District on Thursday.

A 20,000 square-meter lot rented by Petec Trading & Investment Corporation in District 8’s Ward 16 has been left unused for several years, the committee said, adding that its members had found large portions of the land inundated with water.

A land plot of more than 26,200 square meters rented by Saigon Industry Corporation’s Sinco Machinery Company on Kinh Duong Vuong Street in Binh Tan District has been overgrown with tall grass, according to committee officials. The committee said overgrowth had also covered a 60,000 sq.m.-lot owned by Vietnam Southern Food Corporation (Vinafood 2) on the same street.

A report by the committee said several other land lots at prime locations throughout the two districts had been neglected for years by the state-owned companies designated to manage them. The committee also found several state firms renting out public land illegally.

Vinafood 2 admitted to the committee that it had illegally leased out several public HCMC land plots under its management for profit.

But when the committee officials pointed out eight pieces of land rented by the company were currently occupied by other individuals and organizations, Vinafood 2 could not account for them. The company said it was not aware that residents and other firms were using the land it had leased.

City blamed

The HCMC People’s Committee, the municipal government, has been reprimanded by experts and officials alike for failing to reclaim vast areas of public land left unused or leased out illegally by state-owned companies enjoying government-subsidized rentals at 20-40 percent of market prices.

Mai Quoc Binh, deputy chief of the Government Inspectorate, blamed the HCMC People’s Committee for the poor public land management.

“Local administrators have failed to prevent or deal with public land transgressions by state-owned companies,” he said.

No company would have dared to illegally lease or sell public land if the local administrations had drawn up and begun to implement detailed plans on how the land would be used, he said.

Binh also strongly criticized state-owned companies for treating public land as their own private property and using it illegally.

Pham Dinh Cuong, head of the State Property Management Bureau under the Ministry of Finance, said local authorities managing public land use should revoke all land being used illegally.

Management agencies at state-owned companies were also responsible for the waste, he added.

Technically illegal

A land plot of 3,200 square meters on District 3’s Nguyen Thi Minh Khai

Street in downtown HCMC has been used as a car park for the past five years by the Saigon 3 Garment Company under the Gia Dinh Textile Garment Corporation (Giditex).

A real estate company in HCMC said the lot was worth VND100 million (US$5,846) per square meter. However, the skeleton of a five story building has been left unused there for years while its yard and the ground floor have been leased out as a parking lot.

Vinafood 2 has asked the HCMC People’s Committee for permission to continue using 125 land plots in the southern hub. However, its official proposal stated that it would only use half of the plots properly while setting aside the rest for major construction projects such as office buildings, shopping centers, hotels and restaurants, all of which would be technically illegal to build on public land.

A 5,000-square-meter land plot rented by Vietnam Airlines Corporation at the corner of Dinh Tien Hoang and Nguyen Dinh Chieu streets in District 1 has also become a parking lot after a project to construct a hotel was put on hold 15 years ago, according to the city Department of Natural Resources and Environment.

Illegal profits

The Vietnam National Seaproducts Corporation (Seaprodex) has been illegally leasing prime real estate on District 1’s Dong Khoi Street, Vietnam’s boutique-shopping hub, since 1999.

According to lease contracts, the corporation will collect a total of at least VND30 billion ($1.75 million) from those rents through 2010, Tuoi Tre newspaper reported.

Dong Khoi is the most expensive street in HCMC, with state-regulated prices hovering around VND81 million ($4,700) per square meter, a rate much lower than market prices.

The Vietnam Posts & Telecommunications Group has also leased 388 of its 1,400 square meters of floor area on District 1’s Dinh Tien Hoang Street to another company. Another plot managed by the state-run group has also been partially leased to a private enterprise on Nguyen Dinh Chieu Street, according to a Tuoi Tre report citing the Department of Natural Resources and Environment.

Irrevocable

The state-run Saigon Real Estate Company (Resco) is using 230 land plots with a total area of nearly 370,000 square meters in HCMC, according to the department.

However, Resco said those figures were just on paper and were incorrect. It said it was actually only managing 130 plots at just over 264,000 square meters. The corporation said the rest of the land area cited by the department had been handed over to other companies or had been cleared for infrastructure projects.

City authorities said they had trouble reclaiming several land plots from Resco’s affiliate, the HCMC Freight Yard Company, because the company had illegally leased land to other companies that had neglected the reclamation notices.

Saigon Leather Garment Company, a Giditex affiliate, has rented out more than 700 square meters under its management to a private school that refuses to give up the land.

The unofficial contract states that Hong Ha Private High School would use the land for 10 years from 2004, at VND21 million ($1,228) per month in the first three months and VND30 million ($1,754) per month later on.

Ha Thi Kim Sa, the school principal, said she had only found out that Saigon Leather Garment Company had no right to rent the land when they applied for construction license to construct the facility.

Giditex only detected the illegal land leasing by Saigon Leather Garment Company in 2006 and had to file a lawsuit to reclaim the land after the school refused to return it.

Tran Quang Minh, the company general director, said the People’s Court of Phu Nhuan District had convened the concerned parties for negotiation but the school had still refused to return the lot.

Source: Thanh Nien, Tuoi Tre

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