Vietnam is wasting huge amounts of land and income from land rental due to lax management.
Wasted land (illustrative photo)
On March 23, the National Property Administration (NPA) under the Ministry of Finance held a conference on getting value for money from land and public property for social-economic development for the 2011-2020 period.
According to NPA, state agencies occupy 1.5 billion square metres of land worth VND594 trillion (over USD28 billion). In addition, more than 100,000 square metres of housing worth VND138 billion (USD6.6 million) also belong to these agencies. Real estate belonging to state agencies accounted for 97.2% of the total asset of state enterprises.
About 155 million square metres of land which are mostly found in favourable locations with high commercial value are owned by state-controlled enterprises.
One of these cases is headquarters of the Electricity Group of Vietnam (EVN). The building is located directly opposite Hoan Kiem Lake in Hanoi. Another example is the office of Vietnam Railways on Ham Nghi Street, District 1 in Ho Chi Minh City.
At the end of 2011, 3.4 billion square metres of land and 106 million metres of housing had been compiled from information gathered from 71 ministries and departments, 17 state-owned enterprises and 51 cities and provinces.
These agencies all gave proposals for alternative land use. However, the NPA said it has ruled out all the proposals since the solutions aimed to retain land, rather than using it for greater social benefit.
Vast amounts of neglected land is also a major problem as state-controlled companies have taken advantage of preferential land policies for financial purposes or even left the land vacant. For example, 1,200 hectares of land belong to financially troubled shipbuilder Vinashin has been left abandoned, despite the corporation suffering a huge capital shortage, it still wants to retain the land for real estate speculation.
Pham Dinh Cuong, Head of NPA said the state needs to pay attention to the land-use incomes at a time when the national budget is facing difficulties. He proposed several solutions such as removing privileges for state enterprises. "Lands at preferential locations bring huge profits and it would be a waste to use such land to build corporate headquarters." He said.
According to the draft plan the NPA suggested two ways of collect revenue from state-owned land.
The first was to have an annual revenue of VND81,646 billion (USD3.9 billion) from land use and rental fees, taxes on land transfers or non-agricultural land use.
The second option could bring annual revenue of VND98,624 billion (USD4.7 billion) assuming that land prices will increase 20% in conjunction with increased property taxes.
The Ministry of Finance said that during the 2011-2020 period, income from land rent will play an increasingly important role in the state budget. He further said, "The income may be even higher because prices are reaching real market prices."
