Exchange land for infrastructure: Stop the hands of tycoons from grabbing cheap prime land

To avoid the loss of land and state assets when investing in projects under the form of Build-Transfer (BT) contracts, also known as exchanging land for infrastructure, the Ministry of Finance has developed a prevention plan. This is the first time there is a document clearly regulating the exchange of public assets for infrastructure.

Tightly manage payments for BT investors

The Ministry of Finance is seeking comments on a draft Decree regulating the use of public assets to pay investors when implementing construction investment projects under the BT form.

The Draft Decree states that one of the principles of payment for BT projects using public assets is that "it can only be carried out after permission is granted by a competent state agency" according to the provisions of law and the selection of investors to implement BT projects must comply with the provisions of the law on bidding.

The use of public assets to pay Investors when implementing BT projects is carried out according to the principle of parity, offsetting the difference between the value of the BT project and the value of public assets for payment.

Hanoi Museum is a BT project.

Specifically, the value of public assets is determined according to market price at the time of payment according to the provisions of law. The value of BT projects is determined according to the provisions of the law on investment, the law on construction and related laws.

The Draft Decree also provides more clearly the time of payment for BT projects. Accordingly, in the case of payment by land fund or office, the time of payment is the time when the People's Committee of the province or centrally-run city issues a decision to allocate land or lease land to the investor. In the case of payment by infrastructure assets and other types of assets, it is the time when the competent state agency issues a decision to allocate assets to the investor.

“The time for issuing decisions on land allocation, land lease, and asset allocation to investors is implemented simultaneously with or after the completion of the BT project according to the provisions of law on investment in the form of public-private partnership,” the draft clearly states.

The value of the BT project stated in the BT contract is the total cost of compensation for site clearance (if any), construction costs, equipment costs, project management costs, construction investment consulting costs, interest on loans to mobilize investment capital, and other reasonable costs (excluding contingency costs for arising volumes and price fluctuations according to the provisions of the law on investment, construction, and other relevant laws).

Types of state assets to pay investors

State assets used to pay BT investors in "land for infrastructure" projects and works are clean land, uncleared land, headquarters, and infrastructure assets.

For cleared land, payment is made according to the principle of parity. Accordingly, in case the value of the paid land fund is greater than the value of the BT project, the investor shall pay the difference in cash to the state budget according to the provisions of law.

In case the value of the paid land fund is less than the value of the BT project, the State shall pay the difference to the investor in cash at the time of final settlement of the completed BT project according to the provisions of law on investment and construction.

Regarding the use of uncleared land to pay for BT projects, the draft Decree states that: Based on the results of compensation and site clearance, the Provincial People's Committee shall issue a decision to allocate or lease land to investors in accordance with the provisions of the law on land.

Regarding the use of office premises to pay for BT projects, the draft Decree stipulates: The value of office premises to pay for BT projects is the value of land use rights and the re-evaluated value of assets on land.

The use of office premises to pay for BT projects to invest in construction of works at new locations shall comply with the provisions of law on management and use of public assets and shall be carried out after having a decision or written approval from a competent state agency.

“The price of assets on land must be consistent with the actual remaining value according to the revaluation results; the value of land use rights (land use fees, land rent paid once for the entire rental period) is determined close to the actual land use rights transfer price on the market according to the new land use purpose, not lower than the land price prescribed by the Provincial People's Committee”, the draft clearly states.

Another form of payment for BT investors is to use infrastructure assets for payment. Accordingly, the value of infrastructure assets for payment of BT projects is the value of the right to exploit infrastructure assets, determined according to the provisions of law on management and use of infrastructure assets and other relevant laws.

According to Vietnamnet