The Ho Chi Minh City People’s Committee Office has recently announced the conclusion of the Chairman of the Ho Chi Minh City People’s Committee, Phan Van Mai, regarding the suspension of investment in the Phan Dinh Phung Sports Center construction project (Phan Dinh Phung Stadium) at No. 8 Vo Van Tan, District 3 under the public-private partnership (BT Contract) form, and the conversion to public investment method.
The Chairman of the People’s Committee has assigned relevant departments and agencies to review the legal basis, examine the work performed by the investor, and determine reasonable costs as a basis for negotiation with the investor in the direction of a definitive settlement on the principle of harmonizing interests and in accordance with regulations.
After 7 years of dismantling the old structure, the Phan Dinh Phung Stadium renovation project has seen a new legal development. The project will be handed over to the Ho Chi Minh City Department of Culture and Sports as the investor. Therefore, Ho Chi Minh City must negotiate to refund reasonable costs to the investor.
Double the capital, “covered up” for nearly a decade
Located on the “golden land” area of District 3 with 4 sides facing Vo Van Tan – Pasteur – Nguyen Dinh Chieu – Nam Ky Khoi Nghia streets, Phan Dinh Phung Stadium is a place for training, practicing, and organizing competitions for a number of Ho Chi Minh City sports.
The old stadium was built in 1977 and put into operation in 1985. Despite being renovated many times, Phan Dinh Phung Stadium has now shown signs of degradation. In 2008, the Ho Chi Minh City People’s Committee had a policy of building a new stadium.
It is known that the initial investment level of the stadium project was announced at VND 988 billion. When there was a new design plan in 2013, the total expected investment capital of the project increased to VND 1,353 billion, excluding sports equipment and tools.
Perspective of Phan Dinh Phung Stadium project. Source: PDR
In 2016, when the Ho Chi Minh City People’s Committee approved the feasibility study report, the project increased its capital to nearly VND 1,954 billion. At the beginning of 2018, Ho Chi Minh City considered adding 3 hectares of land at Phu Tho Racecourse, District 11, as payment to the investor. However, this option was rejected, and the Ho Chi Minh City People’s Committee directed the search for alternative land funds.
After that, the investor was assigned the land at 257 Tran Hung Dao (District 1) for payment. However, due to increased construction costs causing the project to exceed its budget, the Ho Chi Minh City People’s Committee requested the addition of land at 3-3 bis Phan Van Dat (District 1) and other land to pay the investor.
In early 2017, the Phan Dinh Phung stadium was dismantled. Since then, this “golden land” area of over 14,400 m2 has been left empty, falling into a state of “covering”.
“Embracing” the project for more than a decade and then losing sight of it
Phan Dinh Phung Stadium project was approved by the Prime Minister for Ho Chi Minh City People’s Committee to pilot investment under the BT Contract (construction – transfer) form since 2008. The investor of this project is a consortium between the Compensation and Clearance Joint Stock Corporation and Phat Dat Real Estate Development Joint Stock Company (stock code PDR).
Phat Dat once said that it planned to start the Phan Dinh Phung Stadium project in 2018 and complete it after 2 years.
With the BT Contract to build a new stadium, the investor will be compensated with 257 Tran Hung Dao land and land of equivalent value.
Phat Dat introduces project information outside Phan Dinh Phung Stadium land. Photo: ZNews
As of September 2019, the investor and the Ho Chi Minh City People’s Committee have signed the minutes of completing the negotiation, initialed the investment agreement, and the draft BT contract. However, the Ministry of Finance had previously requested that localities temporarily suspend the use of public assets to pay for BT contract projects.
How much has Phat Dat spent on Phan Dinh Phung Stadium project?
In the consolidated financial statement of the first quarter of 2024, Phat Dat recorded VND 77.1 billion in construction in progress for the Phan Dinh Phung Stadium project. This cost remained unchanged from the end of 2023.
Source: PDR
In the investment portfolio in associated companies, Phat Dat also reported an investment of nearly VND 17.3 billion in Phat Dat Construction Investment Company Limited (Phat Dat Construction Company).
Phat Dat Construction Company was established on July 3, 2018, and its main activity is real estate business. This is the company responsible for investing in the construction of Phan Dinh Phung Stadium.
Source: PDR
At the end of the first quarter of 2024, Phat Dat contributed nearly VND 17.5 billion out of VND 147 billion of Phat Dat Construction Company’s charter capital. During the period, Phat Dat recorded a capital contribution transaction of VND 771 million and a capital commitment of nearly VND 130 billion at Phat Dat Construction Company.
