Public auction of “golden land” to avoid loss of national resources

Mr. Nguyen Van Duc.

What do you think about the loss of public land in conversion, especially in prime locations in big cities?

In Ho Chi Minh City, there are thousands of public land in the process of equitization or conversion of land use purposes which have been lost due to the acquisition of enterprises. Across the country, in general, this number will be much larger. There are land values that have been depreciated by 2-3 times the actual market value. In Ho Chi Minh City, there is a big lesson from the auction of land No. 23 Le Duan, which is the land of the Lottery Company in Ho Chi Minh City in 2015. This golden land is 3,000m2, located in one of the “hottest road” of Saigon with two fronts Le Duan and Nguyen Du. According to the initial valuation, the land price is nearly 600 billion VND, but when acting, the land was paid 2.6 times higher than the original price.

So with only a small piece of land, if we sell or convert the land without auction, we have missed a huge amount of money for the state budget. Not to mention the large area of land, the management and use of land are not effective, the number of losses is much greater. I think there are millions of billions VND of government lost due to the way public land management has many shortcomings and loophole in recent times. I have mentioned many times about the sale price of public land allocation lost millions of billion VND, or the story of building and transfer (BT), land exchange for infrastructure has caused great losses, while the State budget is very difficult and financial capacity is weak. If clarifying the case of buying and selling, converting public land will see most have losses from a few hundred to trillions VND. Public opinion is wondering why the state is responsible for assigning land management companies owned and sold land managed under very cheap prices? The poor land management of the State, resulting in the loss of large resources from the sale of designated land plots, or the exchange of land for infrastructure, whose responsibility?

In your opinion, who is responsible for the loss of the state recourse in the process of SOE equitization, conversion of land use purpose and pricing?

In fact, these inadequacies are still taking place and there are no signs of stopping. I still wonder, why not take lessons of Ho Chi Minh Lottery Company to rectify the management and use of public land to stop this phenomenon. Recently, the Ministry of Finance has reported to the Prime Minister and proposed to inspect the conversion of public land use to permit the deployment of real estate projects through the sale, designation, etc. at 60 real estate projects. The Ministry of Finance has pointed out the "holes" that could result in the loss of state assets. Accordingly, when SOEs are equitized, especially SOEs that are being leased land by the State at the valuable commercial places, city center, the valuation of enterprises does not include the value of land use rights for equitization, no auction when equitization. The relocation of housing and land facilities has been shifted by the provincial/municipal People's Committees for the purpose of building commercial centers, offices for lease and houses for sale but fail to conduct auctions according to the provisions of the Land Law. In addition, the determination of land prices for collection of land use fees and land rents is mainly based on the results of consultancy firms but is not sufficient and not close to the market price.

I think this proposal from the Ministry of Finance is very accurate and I hope that these are not the last projects to be inspected, but only the first ones. Need to clarify the process of conversion, the sale of indications or price violations are legal or not, profiteers or not. It is important to investigate who is responsible, who is in charge of these stories, to prevent this from happening again. Real estate projects originated from public land are mostly profiteers. Benefit from stakeholders, from sellers, stock buyers to the ones who are in charge of pricing and appointed pricing.

In your perspective, to prevent this situation, what should be the rules on sanctions like?

I think the State needs to delineate all the projects related to land conversion and land valuation in order to investigate and clarify the real value of the land, by comparison with the value of the land adjacent, compared with the market price at the time of the transaction, to accurately, transparently and publicly redeem the land. If enterprises want to continue, they must pay the full amount of difference, and the State agencies and individuals involved in the loss of capital and national assets. Verification results must be made publicly available on the mass media. At this point, re-verification as well as conversion, public land valuation in general must be clearly communicated to the people being monitored, avoiding the situation that only a few agencies, some individuals in departments, relevant departments such as Department of Construction, Natural Resources, and Environment, Finance, People's Committees of localities meet together to decide on land prices. For projects that are undergoing conversion procedures, in my opinion, it should stop for review and re-evaluation.

I have always said that converted public land must be open, transparent, not prioritized for anyone and the greatest benefit must belong to the State. SOEs are assigned to manage and use public land when they are relocated, their land assets should be handed over to the State for management, the State compensates for the assets of factories built on that land area. This land will be publicly auctioned to recover to the state budget the collection of its true value.

Concerning public land use management, public opinion is paying much attention from the debate whether to withdraw Tan Son Nhat golf course to expand Tan Son Nhat airport has revealed that the investor still planning to build villas, restaurants, apartments, schools etc. in the golf course. Sir, why is this story?

Regarding the public land under the Ministry of Defense, which is leased to make Tan Son Nhat golf course, I think that the land must be returned to the State when necessary in order to serve the necessary purpose. The properties on it, such as villas, houses etc. will not be compensated because the lease stated that when the State needs, this land must immediately be returned. When renting idle public land, businesses themselves have to estimate of the advantages, disadvantages when investing and when risky, businesses should be suffered.

Thank you, Sir!