Finding solutions to improve land access index

The land access and stable land use index is one of the 10 important component indexes of the Provincial Competitiveness Index (PCI), reflecting the quality and effectiveness of state management of land of provincial localities to build a favorable environment for the development of private enterprises.

Improving this index is a practical action to successfully implement the Project to improve and enhance the provincial competitiveness index.

Looking back at the PCI data published in the last 3 years for Nghe An, it shows that the "Land Access and Stable Land Use Index" is only at an average level and ranks low compared to the whole country (2014 was 5.32/10, ranked 53/63; 2015 was 5.38/10, ranked 47/63; 2016 was 5.37/10, ranked 52/63).

Among the component indicators that make up the “Land Access and Stable Land Use Index”, only the “% of land area in the province with Land Use Right Certificate” is assessed at a high level (91.58% for all 3 years), the remaining indicators are at an average or low level. So what are the actual component indicators and what are the solutions to overcome and improve them?

FLC Group surveyed in Nghi Tien commune (Nghi Loc). Photo: Thu Huyen

It can be said that the percentage of non-state enterprises assessing that they do not encounter obstacles in accessing land or expanding business premises, although it has improved over the years, is still at a very low level (13% in 2014, 16.07% in 2015, 27.03% in 2016). The bottlenecks identified are the very little improvement in the system of administrative procedures on land and concerns about risks and losses when enterprises have their land reclaimed.

Regarding the shortcomings of the system of administrative procedures on land, a research result at the provincial-level science and technology project "Effective exploitation of land funds for investment in infrastructure and urban embellishment in Nghe An province" accepted in 2014 by the Provincial People's Committee Office showed that: The procedure for creating land funds for allocation in the form of auction and valuation of land use rights includes 7 steps, 34 work stages, including the participation of 14 organizations (commune level, district level, provincial level, technical service organization).

Procedures for granting land use right certificates are equally complicated, with a series of additional procedures such as: obtaining confirmation signatures from adjacent land users, confirming that there are no disputes, explaining documents, increasing or decreasing area; overlapping processing steps between individuals (officers, team leaders, leaders of departments and units), departments (such as between the Land Use Right Registration Office, tax authorities, and Natural Resources and Environment agencies), lack of binding responsibilities (if the lower level approves, the higher level does not agree, the file will be returned starting with the land user) during the process of appraisal and acceptance of the file... have led to the actual time to carry out the procedures far exceeding the regulations, causing frustration and negativity.

Regarding concerns about risks and damages when businesses have their land reclaimed, reality shows that in order to be allocated or leased land, most businesses have to bear many types of costs that are often not compensated when the land is reclaimed, such as: the agreed amount of support for people at the market price is different from the amount calculated according to the state price list.

Perspective of Vinh - Cua Lo Boulevard project planning. Photo courtesy

A study by the Vietnam Academy of Agriculture in 2016 showed that although land valuation in Nghe An was carried out systematically and in compliance with the correct procedures, there were still limitations in valuation skills, leading to a large gap between state land prices and market land prices in many areas, especially for real estate projects; costs for human resources to carry out administrative procedures (33.33% of enterprises said they had to spend more than 10% of their time to learn and implement legal and state regulations in 2016); unofficial costs that enterprises had to pay (72.73% of enterprises said they had to pay these in 2016)...

The above analysis shows that improving the "Land Access and Stable Land Use Index" is of great significance, on the one hand contributing to improving the PCI Index, on the other hand optimally solving the long-standing inherent shortcomings of land management.

To accomplish this task, from practical experience, we propose some solutions.

Firstly, regarding administrative procedures in the land sector: inspect and re-determine in detail all stages, steps, and positions of officials involved in processing records regarding responsibilities, authority, and time at a number of typical units and localities. From there, adjust the process in the direction of: reducing duplicate and unnecessary steps; assigning full responsibility to each official; having a detailed flow chart for each stage and position of officials involved in the processing process; requiring all localities to comply with the process, and not adding any additional steps. Having disciplinary sanctions for officials and organizations if they violate the process.

Second, reorganize the one-stop processing method: After the investor signs the investment commitment and approves the location, the remaining work should be assigned to a public administrative unit responsible for performing all remaining work steps on behalf of the enterprise and investor to lease land, allocate land, and issue land use right certificates. The investor only has to pay the fees according to the prescribed norms.

Third, make the criterion "Production and business performance results" a mandatory criterion when assessing the capacity of the Investor, avoiding the situation of establishing a new enterprise to apply for land lease and then transferring or merging the entire enterprise to make a profit.

Fourth, resolutely revoke projects that violate the provisions of the Land Law to eliminate land speculation or lack of capacity. On the one hand, create opportunities for other capable investors, on the other hand, create leverage for other investors to fully fulfill their responsibilities. And finally, it is necessary to prioritize resources to create clean land funds to implement State planning, avoiding the situation where enterprises "do planning". Inventory and manage well public land funds and public assets, strictly implement regulations on auctioning public land and assets after enterprises are dissolved and have no need to use them for the assigned purposes.