While municipal authorities in HCM City are planning to revoke the licenses of hundreds of real estate projects, investors place blame on cumbersome regulations.
Incomplete ground clearance
Authorities of HCM City have asked the local Department of Natural Resources and Environment to review all ongoing real estate projects. The result of the review showed that, out of 479 projects, 327 were behind schedule. One example is the Hanh Phuc urban area project, with an estimated capital of VND9 trillion (USD43 million). The area would have covered 42 hectares, including apartments, housing and schools. It was expected to be finished by 2016, but there are doubts about this deadline at the moment.
As of now, the ground clearance rate has only reached 30%. The Government Inspectorate once suggested the revocation of licenses from a number of investors. But authorities of HCM City asked to give investors an extension to complete the project. However, even with the extension for investors of the Hanh Phuc project as well as investors of hundreds of other real estate projects in the city are coming to an end with little to no progress.
On the other hand, investors have said that procedures should be more flexible and comprehensive. This, they say, would allow them the time to complete projects as quickly as possible.
Nguyen Thi Nhu Loan, Chairwoman of Quoc Cuong Gia Lai Group, the investor of the Phuoc Kieng urban area said the scale of the project is about 90 hectares. They cleared 60 hectares, clearance became an issue after the surrounding residents disagreed.
Current regulation stipulates that any investors or enterprises must negotiate terms of clearance before construction presumes, putting the onus on them.
Loan said they were asking authorities to allocate the first 60 hectares for construction or they would run out of time. "The authorities told us the project would be open for bidding again. We had already taken on VND1.5 trillion in loans. If we actually had to go through all the complicated paperwork again, the interest would have increased by VND180 billion, and customers would have suffered from losses as well."
The local Department of Natural Resources and Environment said that in any case in which investors want to stick with those stagnant projects, the department will give administrative consultation and municipal authorities might even decide to give assistance to investors who have completed 80% ground clearance.
Le Hoang Quan, Chairman of HCM City People's Committee, said they would review each project carefully. Investors of several certain projects will be supported, but incapable investors licenses would be revoked.