Project stalled due to compensation claims that do not comply with regulations.
A lack of financial resources from investors is one of the main reasons why many real estate projects in our province are behind schedule… But there are also investors who have spent hundreds of billions of dong determined to complete projects on schedule, yet ultimately they are still "suspended" due to unreasonable compensation demands.
(Baonghean)A lack of financial resources from investors is one of the main reasons why many real estate projects in our province are behind schedule… But there are also investors who have spent hundreds of billions of dong determined to complete projects on schedule, yet ultimately they are still "suspended" due to unreasonable compensation demands.
A low-lying, barren area next to the Lam River (in Ben Thuy ward) has been heavily invested in by Thanh Thai Thinh Co., Ltd. to develop a commercial center, hotel, residential area, and luxury villas in Ben Thuy ward. The project started in October 2008 and was divided into two investment zones.
At the project north of the regulating lake (Block 13), covering an area of over 41,789 m2, the investor has completed land compensation and clearance, and has basically finished the construction of technical infrastructure including bomb and mine clearance, geological surveys, land leveling, road construction, clean water system, electricity system for domestic use and lighting, and has been granted land use right certificates. At the project south of the regulating lake (Block 15), covering an area of over 17,766 m2, more than 70% of the technical infrastructure work has been completed, with electricity, roads, and drainage systems reaching over 90% completion. The investor has signed contracts with several partners to contribute capital for the construction of technical infrastructure and the rough construction of houses to be handed over to customers on schedule (October 2011). According to the assessment of the authorities, this is one of the projects where the investor strictly adheres to state regulations and obligations and implements construction quickly.
The project was progressing quite smoothly, but on August 28, 2011, some residents claiming to be members of the former Ben Thuy Loading and Unloading Cooperative suddenly demanded that the project be stopped. They erected tents and shelters and planted trees on the project land to obstruct construction progress. The company has repeatedly met and discussed with the residents to explain the compensation for land clearance for the project, but without success. The company has also repeatedly petitioned relevant authorities at all levels, but the issue remains unresolved, and the project has been "suspended" ever since.
Nearly 170 billion VND invested in a project to build a shopping center, hotel, service facilities, and luxury villas in Ben Thuy ward has now become… a dumping ground for construction materials!
Mr. Nguyen Hong Sam, representative of Thanh Thai Thinh Co., Ltd., stated: “We have fully fulfilled our obligations to the state and properly implemented land compensation; however, due to some residents obstructing the project's construction, the relevant agencies and departments have not dealt with the issue promptly. As a result, nearly 170 billion VND invested by the company in this project is currently frozen, causing frustration for the investor and customers, and especially resulting in lost business opportunities for the company.”
To clarify this issue, we worked directly with the relevant department of the Vinh City People's Committee and learned that: During the planning, land acquisition, and compensation and site clearance process for the project, the Vinh City People's Committee approved the compensation and support plan for those currently using the land according to regulations (these households have received compensation for site clearance without complaint and handed over the land to the investor); however, some households (formerly members of the Ben Thuy Loading and Unloading Cooperative) who are not currently using the land have filed claims for the land and requested compensation, arguing that the land originated from the Ben Thuy Loading and Unloading Cooperative (which has actually been dissolved and has been inactive for 22 years).
Despite numerous direct dialogues and specific responses from relevant authorities regarding the compensation claims being misrepresented (as these complainants were not directly using the land at the time of land acquisition), some residents have refused to accept the decision and filed collective complaints, gathering in large numbers and causing public disorder, hindering the project's construction. Recently, at a conference on resolving difficulties and obstacles in real estate projects, the leaders of Nghe An province requested relevant authorities to actively intervene to promptly resolve the issues at this project.
Another real estate project in Dien Ky commune (Dien Chau district) is also facing difficulties because 17 out of 384 households have not yet agreed to compensation for land clearance. This is the Dien Ky Commune Commercial and Service Urban Area Project, invested by OLECO Construction, Service and Labor Cooperation Joint Stock Company, which has been stalled for nearly two years. Mr. Le Xuan Luyen, General Director of OLECO Joint Stock Company, complained: “We are very committed to this project and have made every effort to fulfill our responsibilities to accelerate progress. We have invested over 30 billion VND in the project, but we still cannot continue construction. Although the land area is public land and the company has completed the compensation and land clearance process, it is still stalled, causing delays and losses for the company.”
It is known that this project covers a total area of over 33 hectares, and during its implementation, there have been instances of local residents obstructing the construction work. To resolve this issue and reassure the investor, the provincial leadership has proposed solutions such as flexibly transferring the public land of 17 households who have not yet accepted compensation to public land in another location, or the investor can consolidate the land in one area within the project site. If the households do not agree, relevant authorities will take timely action if necessary.
In the current gloomy state of the real estate market, relevant authorities and sectors need to focus on resolving obstacles for investors who are striving and determined to complete projects on schedule.
Hoang Vinh
