Ho Chi Minh City’s decision to give a hotel developer a parcel of prime downtown property has triggered a public outcry, with critics saying the land could fetch over $173 million if it went to auction.
The People’s Committee, in a dispatch signed by Deputy Chairman Nguyen Huu Tin last month, granted use of nearly 5,000 square meters of land in the center of the city to Saigon Hon Ngoc Vien Dong Company.
Many public figures, however, called the decision “unfair to investors” and said an auction for the “golden” property could have earned significant amounts of cash for the city’s coffers.
The decision flies in the face of the committee chairman’s directive last year that the land would go to auction.
The administration faced similar criticism last year when it granted another prime land lot to Vincom Shareholding Company, also without holding an auction.
Golden land
According to local property price assessment companies, the lot on Le Duan Boulevard, a prime District 1 street with the Independence Palace at one end and the city zoo at the other, has an estimated market price of VND2.75 trillion ($173.3 million).
It is now managed by the HCMC Housing Business Management Company, a state-owned company under the People’s Committee’s Construction Department, which has leased it to four other companies.
In a meeting in November, People’s Committee Chairman Le Hoang Quan announced the land would be used for a five-star hotel project and asked local agencies to prepare for an auction.
Earlier this year, the Ministry of Industry and Trade, which holds majority stakes in the four companies which are leasing the land, asked the city administration to grant them the land to develop the project.
The reply, also signed by Deputy Chairman Tin late last month, said the property was subject to an auction under current regulations on public assets.
Yet the Saigon Hon Ngoc Vien Dong Company, of which a founding shareholder is the HCMC Housing Business Management Company, won the right to use the land without any explanation from the administration.
Unworthy choice
Those who have protested the decision said the city’s auction of a less attractive land lot in Binh Thanh District last year had injected about $56.5 million into the city’s consolidated revenue.
The Le Duan lot could earn up to five times that amount, they argued.
Forgoing an auction meant the city wasted an opportunity to select the best developer for the precious property, they said.
Le Hieu Dang, vice chairman of the local committee of Fatherland Front, an umbrella organization for social and political groups in Vietnam, said he supported an auction of the land.
“The golden land must fetch gold for the city,” Dang said.
Dang Van Khoa, a member of the local legislative People’s Council, said the land’s “excellent location” deserved an investor of high caliber to make it “an architectural focus” for the city center.
“This property is not an asset of the HCMC Housing Business Management Company,” he said.
“It is an asset of the city, which assigns the company to manage it. The company therefore is ineligible to any preferential treatment.”
A director of a local real estate company, who spoke on condition of anonymity, said the city should hold an auction for all prime land lots, including the Le Duan site.
“If the bidding criteria are clear and the judgment is transparent and fair, even those bidders who lose will feel happy,” he said.
(Thanhniennews)
