A former deputy chairman of Ho Chi Minh City has said he would take responsibility for the cheap lease of a valuable public land plot in the downtown area, which could have contributed much more to the local budget if the leasing process had been done properly.

Nguyen Thanh Tai, who kept the post in the 2005-15 period, spoke out after the state inspectorate released a report on the improper leasing of the ‘golden piece of land’ in District 1.

The land plot, spanning 5,000 square meters and situated at a ‘prime location’ at 8 to 12 Le Duan Street, is the latest example of how public land is being wasted, rather than leased properly to rake in revenue for the state budget.

The government inspectorate has asked the central government to take back the land plot in question, which was previously leased by the municipal People’s Committee to Lavenue, a realty developer, without going through a proper bidding process as required.

The city’s administration has to provide suitable compensation to Lavenue to revoke the land, after which a proper auction will be organized to find the most suitable lessee for the property, according to the inspectors.

The state inspectorate also said that the Ho Chi Minh City administration had violated the law on investment and the law on state property management by choosing the lessee without organizing an auction.

The lessee does not have sufficient financial capacity for implementing projects on the property.

Tai was directly responsible for the wrongdoing, according to the inspectorate.

Vehicles are parked on the piece of land in downtown Ho Chi Minh City. Photo: Tuoi Tre

Cheap lease

Prior to 2007, the piece of land was rented by four companies under the Ministry of Industry and Trade for use as their headquarters.

In 2007, the municipal administration announced the intention to carry out a bidding process in order to select a developer to build a five-star hotel and shopping mall on the land plot.

In 2010, the administration established Lavenue Investment Corporation, which consisted of five shareholders, including four firms under the industry ministry, to implement the project.

However, the four companies later transferred their shares to Kido Investment Company.

The city’s administration agreed to let Lavenue use the property to develop the project in 2011, under a lease term of 50 years.

According to the contract, Lavenue had to pay over VND621.7 billion (US$27.35 million) for the use of the piece of land at 8 Le Duan, which covers about 3,400 square meters.

The company had also to pay VND3.5 million ($154) per square meter per year for the remaining part of the land plot, which is at 12 Le Duan.

Lavenue already paid the land use fee for the first land plot, and the rent for the second piece of land until June 30, 2016.

However, the entire area has since been used as a parking lot for motorbikes and automobiles, with no sign of hotel construction.

Former deputy chairman of the Ho Chi Minh City People’s Committee Nguyen Thanh Tai is seen during an interview with Tuoi Tre

‘Hasty decision’

According to the government inspectorate, the current value of the property is VND400 million ($17,600) per square meters.

Once it is revoked and leased to a new developer through a proper bidding process, the property could contribute VND2 trillion ($88 million) to the local budget, according to the inspectors.

Tai, the city’s ex-leader who is said to have a role in the leasing of the land at cheap prices, told Tuoi Tre (Youth) newspaper that he was not in charge of urban management during his time in office as standing deputy chairman of the municipal administration.

Tai was only assigned to take over urban management in 2008, when the man in charge, deputy chairman Nguyen Huu Tin, started to study aboard.

The former deputy chairman admitted to making a mistake for being too hasty in approving relevant processes to lease the land to Lavenue.

He underlined that he would take the blame.

The former official also asserted he had not benefited from the lease or let money manipulate his decision.

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