Hanoi will cancel the land allocation to abandoned projects as soon as possible in 2023. However, the financial and operational status of investors must be taken into consideration. Nguyen The Diep, Vice President of the Hanoi Real Estate Club, talks to The Hanoi Times about this issue.

Nguyen The Diep, Vice President of the Hanoi Real Estate Club. Photo: Doan Thanh/The Hanoi Times

How has Hanoi suffered from abandoned, backlogged projects?

Hundreds of projects in Hanoi have been halted for years, and a large amount of land has been left unused.

District authorities are the first to be blamed for failing to provide sufficient information and details on the validity of projects and for failing to supervise these projects. Meanwhile, the termination of a project is a time-consuming task.

According to the Land Law enacted in 1993 and amended in 2003 and 2013, a project should be canceled if the investor does not receive any income from it for more than one year, or if the progress of the project lags behind schedule for more than 24 months. In practice, however, very few projects have been rescinded.

To some extent, investors cannot implement the projects because they face cumbersome administrative procedures to obtain project approval and construction permits. Other barriers include land clearance obstacles, lack of project management skills among investors themselves, and overlapping administrative management among different government agencies.

As a result, projects are abandoned, wasting land resources, slowing down Hanoi's socio-economic growth, and causing public dissatisfaction. Since the projects are sick, the government cannot collect taxes. The project land is left unused, while other people have no land for production and businesses have no available land resources to expand their operations.

How do you assess Hanoi's recent efforts and measures to deal with abandoned projects in the city?

This is one of the solutions to prevent land speculation and market manipulation. However, we should take into account the difference between the authorities and investors in the way they view a project. For the authorities, the project serves their urban planning strategy, while for the investor, it must be profitable. If the project shows no signs of profitability, the investor will not waste his resources on it.

Therefore, the urban planning policy must be efficient and sufficient. An urban development plan must be considered from various aspects related to architecture, economy, society, infrastructure, and services. The project will appeal to investors if its profitability is assured.

Abandoned land in the rural district of Me Linh in northern Hanoi. Photo: Cong Hung/The Hanoi Times

From a scientific point of view, urban planning needs to be a few steps ahead and serve long-term purposes.

We must acknowledge that our regulatory system has not kept pace with rapid urbanization and economic growth. Sometimes, companies are not to blame for leaving project sites unused. It is the politicians, urban planners and regulators who are unable to foresee the problems that will arise.

Withdrawing land allocated to projects by incompetent investors is a must. However, before doing so, we must examine both the external and internal causes of the problem. If the project is hindered by external factors, we must find solutions to solve the problems and keep the project going. The cancellation of allotment should be applied to the projects in which the investors try to hold on to the land to make unfair profits.

What will the authorities do to categorize and cancel the land allocations of the delayed projects?

We have seen some shortcomings in the implementation of the 2013 Land Law, and the law itself has not facilitated enterprises and authorities to make the best use of land resources for socio-economic development.

Land exploration and utilization must be timely, efficient, and in line with expected policies to create a driving force for socioeconomic growth. To do this, we must make land development plans transparent and deal with violations publicly. This will help the authorities fight corruption and maximize the use of land resources.

From a local government perspective, we need to hold local leaders accountable for their actions in making land use and auction plans, thereby improving the quality of government management of land resources. Local authorities should also work to punish the investors who plan to hold on to the land for no reason.

The dealings of investors must be transparent based on their practical conditions. This should help those who have suffered from the pandemic in recent years to continue their work.

The cancellation of projects is a complicated issue in which the authorities and companies must take their actions step by step in accordance with the law. The government should reimburse the companies for the cost of clearing the land. In this case, it will double the trouble for the government.

Thank you!