Large amounts of public land in Ho Chi Minh City are being chucked away, resulting in immense losses to the state budget.

A report by the municipal Department of Natural Resources and Environment has revealed that several plots of public land in the southern hub have been abandoned, encroached on, or used for the wrong purpose.

Local businesses that won deals to lease the properties have been renting them to other institutions for their personal benefit.

In his recent inspection, Cao Thanh Binh, deputy head of the economic and budget committee under the municipal People’s Council, pointed out the wastefulness at one public land plot on Quang Trung Street, Go Vap District.

The 18,400 square meter area was previously leased by the National Phytopharma JSC (Phytopharma) for the construction of shops, offices, and warehouses.

The firm agreed to rent the property for 50 years at VND142 million (US$6,225) per year.

However, the company has cooperated with two other businesses to open some restaurants, earning billions of dong (VND1 billion = $43,839) on an annual basis.

According to the city’s Department of Construction, about 12,490 square meters of the land is being used for the offices and warehouses of Phytopharma.

The rest of the property is home to two restaurants, it added.

In order to legalize the establishment of the eateries, Phytopharma asked the People’s Committee in Go Vap District for permission to renovate their old offices into a cafeteria and rest area for its employees.

Once the petition was approved, the two restaurants were constructed rather than a cafeteria or rest area.

In District 6, several pieces of public land are also being rented at cheap rates for a variety of businesses.

Loose management

Several businesses authorized to manage the public properties have not been thorough, resulting in many land lots being abandoned or encroached on by local residents.

In some other locations, businesses have allowed their employees to build houses on the land, making it difficult for authorities to reclaim these properties.

This situation can be observed on a 1,051 square meter area on Kinh Duong Vuong Street, District 6, where 15 families are currently residing.

These people were employees of a factory based in the southern province of Dong Nai.

Despite no authorization, the firm allowed its staff members to construct their homes on the land about 30 years ago.

However, they have never been granted legal ownership despite their repeated requests.

In order to reclaim the public land, local authorities have been asked to pay a large amount of compensation to the residents they wish to relocate.

Similar situations have occurred on other plots of land in Binh Thanh, Thu Duc, and Phu Nhuan Districts.

Assertive measures

According to Le Hoang Chau, president of the Ho Chi Minh City Real Estate Association, the proper management and effective use of public land require multiple measures to be carried out simultaneously.

The lawmaking National Assembly should pass the law on the management and use of public assets, Chau said.

The municipal Department of Natural Resources and Environment should be the only agency that manages public land, he continued.

An auction mechanism should also be established to facilitate the efficient use of public property.

Hoang Minh Tri, former head of the city’s Institute of Development Studies, said that businesses that do not use the land in accordance with their deals should be evicted.

Such land plots will then be open to other bidders to avoid wastefulness, Tri elaborated.

A representative from the municipal Department of Finance stated that during the upcoming inspections, public land plots that are deserted or wrongly or ineffectively utilized shall be reclaimed.

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