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Smooth Road Pledged For Real Estate Projects   2009-11-07 - Thanh Nien

  Real estate investors will soon be allowed to focus on implementing their project without worrying about site clearance and compensation.

The government will also encourage public-private partnerships in infrastructure development as another measure to boost the real estate sector, a senior official said.


“We actually know the obstacles in the way of investors who have struggled to implement their projects in Vietnam,” said Dang Huy Dong, deputy minister of planning and investment.


“The government will step by step ease difficulties for them,” he said on October 14 at the Vietnam Top Property Opportunities 2009 conference and exhibition in Ho Chi Minh City.


The conference was organized for the second time in Vietnam to have local and international investors share experiences and discuss with government officials the policies and environment needed for property development in the country.


Dong said the government would hold auctions for land sites, especially in metropolitan areas, in order to make the process more transparent.


“The auctions would benefit investors, the state and also people in the sites,” said Dong. The state would gain more money that it can use for compensation, speeding up site clearance.


Auctions have been tried at prime sites in big cities like Hanoi and HCMC, and have proved their effectiveness in site clearance, he said.


Dong said the government would also pilot public-private partnerships in infrastructure projects later this year. The aim is to develop infrastructure in “weak” areas.


Investors have complained that their projects in some areas have been hampered by the lack of infrastructure, so the measure seeks to address this concern, Dong said.


Time consuming


Local and foreign investors in the sector have said Vietnam would not attract more investment if it failed to improve administrative procedures that were too time-consuming at present.


Martin H. Kaye, chief executive officer of real estate investment Millennium Group said the group had prepared a US$1.6 billion project in Phu Quoc Island, Kien Giang Province in 2005 but received the license from the government only recently.


“If we had been licensed sooner, we would have implemented the project and created jobs for local people,” said Kaye.


Kaye said improved procedures would help attract more investment. If the government focused on new investors and neglected current ones, it would lose both new and current investors, he said.


Nguyen Van Duc, deputy director of Dat Lanh Real Estate, said the paperwork and site clearance problems contributed greatly to uncertainty in the real estate market.


The government’s stimulus package means nothing to the real estate sector as the administrative procedures were cumbersome, said Duc, who added the procedures should be cut by 50 or 70 percent instead of 30 percent as targeted by the government.


Nguyen Chi Dung, chairman of Ninh Thuan People’s Committee, said officials in his province were not highly capable of dealing with land or housing issues as they did not have concrete plans for housing development to base decisions on.


“So they ended up making the investors wait,” he said.


Tran Xuan Gia, former minister of Planning and Investment, said he himself was stuck in administrative procedures after he became a businessman.


The former minister, currently chairman of a commercial bank, said investors sometimes were asked for bribes by government officials.


Frederick Burke, managing partner of US law firm Baker & McKenzie, said slow procedures in site clearance would hinder investment inflows.


Vietnam was facing an imbalance between luxury and low cost houses and apartments, conference participants noted.


Tjeert Kwant, president of real estate investment firm ECC, said developing housing for low income residents was the responsibility of the government. Investors should be supported with tax and credit incentives to create more low-cost housing and stabilize the local real estate market, he said.

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