Bidding challenges for projects with unsolved land clearing

According to the draft amended Land Law, the province People's Committee is in charge of arranging bids and choosing investors before making decisions on land recovery, compensation, support, and resettlement. The province People's Committee must give over the cleared property to the winning investor within 36 months after accepting the bidding results.

Potential challenges may arise

The Ho Chi Minh City Real Estate Association (HoREA) recently commented on this draft law, claiming that the regulation requiring the provincial People's Committee to conduct bidding before selecting an investor and then issuing decisions on land recovery may create "challenges" and potential "conflicts of interest" between state agencies and landowners facing land recovery.

Mr. Le Hoang Chau, Chairman of HoREA, feels that the public may misinterpret the bidding restrictions in the draft Land Law revision as the state reclaiming land for enterprises and employing advance payments for compensation and resettlement. In actuality, investors have already been chosen through competitive bidding.

Furthermore, the section saying that "the successful bidder is responsible for providing monies for compensation and land removal within three months" is ambiguous. This cost has already been mentioned by investors in the bidding documents. If the actual expenses exceed the projected amount, the state budget faces risks and losses.

According to HoREA, the goal of bidding is to select the most capable investor with the biggest financial commitment and the best-quality project. To minimize conflicts of interest between the state and landowners facing land recovery, the group suggests bidding exclusively on projects with completed land clearing. They also propose that the requirement requiring the province People's Committee to handle compensation, assistance, and relocation before handing over the property to the investor be removed.

Supplementing the 1/500 planning regulations

In terms of project bidding criteria, a 1/2000 construction plan is required, however Mr. Chau claims that a 1/500 construction plan is required. Land plots and regions with a 1/500 building plan provide investors specified technical criteria for completing investment projects for bidding.

In the case of Ho Chi Minh City auctioning four land plots in the new Thu Thiem Urban Area, each with an area of less than 10,000 square meters (the auction results have been canceled), the association observes that the city can choose to auction land use rights or bid on projects involving these land plots.

As a result, the organization suggests additional restrictions for bidding on projects including land plots and areas with a competent authority-approved 1/500 construction plan.

In the bidding process, the Chairman of HoREA also considers complementing commercial, service, healthcare, education, tourist, entertainment, economic, export processing, industrial, industrial cluster, non-agricultural production facilities, and other projects.

Currently, the draft Land Law amendment only governs bidding for investors in commercial housing projects, mixed-use residential and commercial projects, and services, leaving other projects unregulated and without assuring economic and social development criteria.