Investors run away from “golden land,” BOT projects suspended

Dec 11th at 13:05

11-12-2012 13:05:49+07:00

Big real estate firms have tried to escape from the projects invested under the mode of “exchanging infrastructure items for land,” and from the golden land areas they once had to struggle hard to obtain

A lot of BOT (build – operation – transfer) projects in Hanoi have been going at a snail’s speed, while only several projects invested under the mode have been completed since 2007. A lot of investors have been trying to give the projects back to the city’s authorities, because they cannot handle with such huge projects, while the land areas provided by the city to them under the program of “exchanging infrastructure items for land” have become no more the “gold mines” to exploit.

Nam Cuong Group, a big real estate firm, has decided to give back the Thach That new urban area project to the city, because the project has become no more suitable to the development program.

This is one of the six urban area projects implemented by Nam Cuong under the mode of “exchanging infrastructure items for land,” when the real estate developer suggested the development of the North – South economic backbone route in the former Ha Tay province, now is a part of Hanoi.

Under the initially designed project, the project would have the length of 63.3 kilometers, the road width of 42 meters and the estimated investment capital of 7694 billion dong.

The backbone route planned to be carried out as BT and BOT project, got the nod from the Prime Minister on February 5, 2008, and was kicked off by Nam Cuong in July 2008.

However, later, since Hanoi has been expanded, the Thach That urban area has become no longer suitable to the capital area development program. Therefore, it believes that it would be better to give back the capital to the city.

The Song Da Corporation also asked to give back the project on upgrading the Highway No. 3 (from Hanoi to Thai Nguyen). The proposal has been accepted by Deputy Prime Minister Hoang Trung Hai, who has asked the Thai Nguyen provincial authorities and Hanoi authorities to mobilize capital for the implementation.

Under the initial plan suggested by Song Da in 2010, the construction corporation would implement the highway upgrading project. In return, it would receive 300-400 hectares of land in Dong Anh district, which it would develop urban area. However, since the real estate market has become frozen, Song Da has decided to quit the project.
Meanwhile, Vinaconex 2, the first-class investor of the Kim Van – Kim Lu urban area project in Hoang Mai district in Hanoi, has sent a petition to the Hanoi People’s Committee, requesting to summon second-class investors of the project to receive the clean land for the project implementation.

“Clean land” means the land which is now ready for the construction after other works, including the compensation for site clearance, have been completed. After Vinaconex 2 finished its works, it cannot find other investors. The total area of the land plots “abandoned” by the second-class investors is about tens of hectares.

A report by the Hanoi People’s Committee showed that tens of projects have stopped the implementation under the mode of BOT, including the ones worth hundreds or thousands of billions of dong. Since the program “exchanging infrastructure for land” fails, some of them would have to be implemented with the capital from the state budget. However, it’s clear that the state budget is not big enough to fund the projects.