Ho Ky Minh, deputy chair of Da Nang, and leaders of departments and branches on October 11 took an inspection tour to tourism projects developed on the coastal land area and heard a lot of complaints.

Nguyen Manh Trung, the investor of Melia Da Nang tourism complex, said the construction land area of the project is very small, and the remaining land area allocated to the project is reserved for landscapes, greenery and internal roads. However, though the project only uses a small land area, it has to pay rental for the total land area.

Under current regulations, land rent is adjusted once every five years. The land rent was adjusted recently and raised to very high levels, which is unbearable for the company.

According to Trung, his company had to pay VND7 billion a year in land rent in 2017-2021. He has been informed that he will have to pay VND27 billion a year in 2022-2026.

When the Covid-19 pandemic broke out, his company had revenue of VND1 billion a year, but it still had to pay land rent of VND7 billion. In 2022, the company did not operate for half a year and got revenue of VND36 billion, while the land rent was VND27 billion, or 70 percent of his income.

When the government tried to support enterprises to overcome difficulties by slashing the land rent by 30 percent and accepting late payments, the local authorities decided to raise the land rent by 300-400 percent.

Trung had to sell his properties saved for many years to get money to pay for land rent. If he had been late in making payment, his company’s account would have been blocked.

Trung warned that if municipal authorities don’t cut land rent, many more businesses will have to shut down, which will result in job cuts and difficulties.

“Da Nang sets land rents at overly high levels and we have been complaining for many years, but there has been no reply,” he said. “It is necessary to re-define the land prices, or travel firms will leave. Don’t let the beautiful coastal areas become deserted.”

Le Minh Kha, representative of Ariyana Da Nang Resort, said the investor has to pay rent for 22 hectares of leased land.  The company now has to pay VND120 billion a year, or VND30 billion higher than 2018 and 2019.

According to Kha, the high land rent has put a heavy burden on the business, when revenue from apartments, villas and conference palace, the major sources of income, is not high enough to cover land rent.

The businessman has proposed that Da Nang municipal authorities design the land rent in accordance with land use functions. He said that it is necessary to reconsider the land leasing fees to make them suitable to coastal projects, because the building density of coastal projects is very low compared with neighboring areas.

Da Nang’s Vice Mayor, after hearing the complaints, requested departments and agencies to study the issue and submit solutions to the municipal authorities for consideration.

“The city’s leaders will have a working session to listen to voices from local businesses about the problem,” he promised. “If necessary, we will organize private meetings with every investor."

“The problems coming within the municipal authorities’ jurisdiction will be settled by the local authorities, while the problems which don’t fall within the competence of the municipal authorities will be forwarded to superiors,” he said.

Prior to that, a number of businesses providing tourism services in the coastal area in the two districts of Son Tra and Ngu Hanh Son, lodged a complaint to the Da Nang City Party Committee, People’s Council and People’s Committee about the high land leasing fees which could not be covered by the businesses’ profits.

In the petition, the businesses made three proposals: allow businesses to continue to lease land at the price fame set before 2020; Da Nang People’s Committee should ask the National Assembly and government not to raise land leasing fee during the Covid-19-affected period (2020-2023); businesses’ accounts will not be blocked, and their properties will not be foreclosed if they owe land rent after huge increases in rent.

Cong Sang