Danang to crack down on slow real estate projects
Danang to crack down on slow real estate projects
The authorities of the up-and-coming central city of Danang are now more determined to revoke the licences of slow real estate projects as well as to enforce related laws.
Vien Dong Land’s $200-million Meridian Towers has been lying idle since it received its certificate in 2007. After changing the business registration certificate and shareholders, and extending the deadline for implementation numerous times, the project remains no more than a plot of land. In March 2016, to make it easier for the investors, Nguyen Xuan Anh, Danang’s Party Secretary, said that the city allows the transfer of ownership to other shareholders so that the project can be implemented.
However, the most recent communication issued by a representative of the Danang Department of Planning and Investment threatened to revoke the project if the investors do not start it soon, in accordance with the 2014 Investment Law and the 2013 Land Law.
Meridian Towers is one of the many idle projects the city is going to pull the plug on. At the end of July 2016, the Danang People’s Committee asked all government agencies to review slow projects, and said it would revoke those that lagged behind the progress committed to by the investors. The city will also stop or suspend projects that are not necessary at the moment or have low profit.
The committee also said that it would recover the land rental debt piled up by companies. Nguyen Dinh An, deputy head of the city’s tax department, said that the city has a growing problem with companies falling behind land use rent payments. For example, Trung Nam Group owes VND222.4 billion ($10 million), PetroVietnam Insurance Finance Investment JSC (PVIF) owes VND73.3 billion ($3.3 million), Danang IT Park Development owes VND51.7 billion ($2.3 million).
Besides Meridian Tower, Danang is scattered with idle projects, many of which take up prime locations. Examples include the 8,500-square metre Danang Center of Vu Long Chau Real Estate JSC and the Chi Lang Stadium mall, earlier invested by debt-ridden Thien Thanh Group.
In Son Tra and Ngu Hanh Son districts there are the Halla Residence project of Korean company Kreves Halla Engineering Construction Corp. and Vinacapital’s Capital Square urban area on Ngo Quyen Street.
Meanwhile, the Villas Apartment Hotel by Hacoin JSC, The Empire by Empire Group, The Nam Khang Resort Residences Danang by Nam Khang Investment JSC, and Bai But tourism area by Hai Duy Co. only have the foundations finished.
