'Brokers' still appear in land auctions in Cua Lo town.

On the morning of October 23, the Legal Committee of the Provincial People's Council had a meeting with the People's Committee of Cua Lo town under the program of supervising the auction of land use rights in the province. Photo: Mai Hoa

"Brokers" still rampant

According to the report of the People's Committee of Cua Lo town, from January 2018 to September 2019, Cua Lo town successfully organized 17 land auctions, including 15 direct auctions and 2 indirect auctions.

The total number of successful auctions was 268 land lots with the winning auction price of more than 214.3 billion VND, an increase of 15.7% compared to the starting price.

Organizing land auctions directly attracts many participants, creating excitement and the auction process has land lots increasing after 2-3 rounds and increasing the auction value higher than the starting price.

Infrastructure in auction planning areas in Cua Lo town has been invested in a systematic manner. Photo: Mai Hoa

However, the limitation of direct auctions is that they cannot filter out "green troops". People who do not need to buy land also participate in land auctions, distorting the market and causing chaos in security and order.

Vice Chairman of Cua Lo Town People's Committee Vo Van Hung said: It cannot be said that auctions in Cua Lo Town do not have "brokers" or collude to lower prices; not only do "brokers" appear in the town, but there are also "brokers" from Dien Chau district and some bad elements appearing at some auctions.

From that reality, recently, the town has piloted organizing 2 auctions in an indirect form, limiting "brokers" and people who need to buy land can determine the actual market price and their ability to participate, whoever bids the highest will win.

Vice Chairman of the Town People's Committee Vo Van Hung admitted that there is a situation of land auction brokers in the area. Photo: Mai Hoa

However, according to the representative of the Town People's Committee, this form is also revealing some limitations that need to be overcome, which is the poor security of information about bidders and auction prices.

On the other hand, the specific regulation of deposit from 5 - 20% of starting price also creates room for brokers to calculate and collude with land buyers on price.

Attention to overcoming shortcomings in land auctions

Based on the actual survey of some auction planning areas and working with the Town People's Committee, the Provincial People's Council Legal Committee highly appreciated the investment and completion of infrastructure for the land lots put up for auction in the town; the determination of the starting price was quite close to the market, so the difference between the auction price and the starting price was only 15.7%.

The delegation surveyed the auction planning area in Nghi Huong ward. Photo: Mai Hoa

However, the monitoring delegation also pointed out some limitations, suggesting that the town pay attention to such as the need to develop criteria for selecting auction organizations according to the regulations of the Provincial People's Committee in a public and transparent manner; at the same time, continue to research to build starting land prices close to the market associated with strengthening the organization of indirect auctions as well as solutions to limit "brokers" colluding to lower prices in land auctions.

The Provincial People's Council's Legal Committee also acknowledged a number of recommendations and proposals from Cua Lo town, notably the province needs to establish a land development fund, creating favorable conditions for localities to clear land and complete infrastructure in auction areas.