The Government’s inspectors have issued their conclusion on the observance of the law on land management and use in the Da Phuoc international urban area project in Da Nang.

Inspectors discovered many violations during the implementation of the Da Phuoc urban area project.

At the inspection, there were two projects under implementation at the Da Phuoc Urban Area – Golf Course Complex, namely a 181 hectare urban area and 29 hectare Thanh Binh townhouse and coastal villa project

Inspectors discovered many violations during the implementation of the Da Phuoc urban area project.

The agreement that the Da Nang City People’s Committee signed with Daewon Cantavil Co Ltd comprised provisions which did not fit current regulations:

The investor was only required to pay land rent of $10 million for 50 years, and the rent would not be changed during the whole life of the project. If party B sold villas, semi-attached houses and apartments, it would not have to pay additional expenses related to land use to party A. The enterprise was also exempted from import tax, which is contrary to the Investment and Land Laws.

The Da Nang City People’s Committee has been found eliminating a golf course project and allocating the land to investors to develop houses and villas, without having the jurisdiction to do so.

The Government’s inspectors also pointed out that the Da Nang City People’s Committee’s decision to remove the golf course project was not in line with the Prime Minister’s decisions on the golf course development program.

The inspectors found that at the 29 hectare project, the land plot was levelled by Daewon Cantavil Co Ltd, but was later taken back by the Da Nang City People’s Committee and allocated to Construction No 79 JSC to contribute capital to a joint venture with Daewon Cantavil at the price of VND300,000 per square meter, without the land allocation duration being specified. This violated the 2003 Land Law.

The land was allocated without an auction, which was a violation of the 2003 Land Law and Decree 181 dated in 2004.

Referring to the 2011 land price frame, the inspectors discovered that the land in the project’s area had the price of VND4 million per square meter. If so, the Construction No 79 JSC received the benefit of VND570 billion at least.

If referring to the 2011 land price of VND5 million per square meter set by the Da Nang People’s Committee for the 29 hectare project, the total amount of money the investor would have to pay for the whole project would be VND1.5 trillion. But the company only paid VND87 billion, or VND1.4 trillion less. 

Thuan Phong

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