In a landmark move, a private company last week received permission to directly negotiate land compensation with local owners, a move set to remove a major thorn in the side of developers.
Bac Viet Development Limited Company was given Hanoi People’s Committee’s nod to negotiate compensation with local land owners to use more than 6,500 square metres in Tu Liem district’s Cho hamlet for developing a residential and trading complex.
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| Slow site clearance and compensation steps have been problematic to many developers. |
The firm will also receive a further 4,500sqm from the Dai Mo Commune People’s Committee to develop its project. A Bac Viet representative declined to comment on the move. However, a Hanoi People’s Committee officer in charge of the project told VIR that although negotiating directly with land owners was already regulated in the Land and Investment laws, no companies had headed down that road.
“Negotiating directly with local land owners is risky because they always request more compensation than they should have,” the source said. However, he noted, the new method had many advantages.
“The investor will be more active in dealing with local land owners and they can have fresh land as soon as they want, instead of waiting for Hanoi People’s Committee to undertake the land clearance and transfer it to them,” he added.
However, in order to take this route, the investor must have strong financial reserves, he said. Bac Viet must also contribute VND2.5 billion ($132,000) to the city’s fund, apart from its land use tax payment.
Hanoi’s deputy mayor Phi Thai Binh said Bac Viet must finish compensation within 12 months from April this year, otherwise the permission will be revoked.
