Unlocking the Potential of Untapped Assets: Releasing the Value of Dormant Land

On May 2, reporters from the Nguoi Lao Dong Newspaper visited the “golden” land in District 3, Ho Chi Minh City – the site of the Phan Dinh Phung Gymnasium project.

Overrun Costs and Timelines

After observing, it has been more than 7 years since the demolition of the old building was carried out, the 4-frontage area of Pasteur – Nguyen Dinh Chieu – Nam Ky Khoi Nghia – Vo Van Tan streets is still an empty lot surrounded by a tin fence, Inside, trees and grass are overgrown.

On the fence are perspective drawings and basic information of the project. The entrance to the project on Vo Van Tan Street is always closed, with only one security guard on duty. This place was once used as a garbage collection point, but after many complaints, adjustments have been made to make it less unsightly.

The investor of this project is a joint venture between Compensation and Site Clearance Corporation and Phat Dat Real Estate Development Corporation. The project was approved in principle by the Prime Minister for investment under the BT (build-transfer) form since 2008 and was implemented in March 2010.

Initially, the project had an investment level of VND 988 billion. According to the contract, the city paid for the 257 Tran Hung Dao land in the center of District 1 for the investor. However, by 2013, the project cost had increased to over VND 1,352 billion; by 2016, the feasible investment capital of the project exceeded VND 1,950 billion. Therefore, in addition to 257 Tran Hung Dao, many other valuable plots of land were proposed to be paid off.

Ending the Drain

In a communique conveying the conclusion of the Chairman of the Ho Chi Minh City People’s Committee Phan Van Mai in a recent meeting of the Working Group on resolving difficulties related to the Phan Dinh Phung Gymnasium project, the Office of the Ho Chi Minh City People’s Committee said that the Chairman of the Ho Chi Minh City People’s Committee agreed to propose suspending investment in the project under the BT form and switching to the public investment method.

The Chairman of the City People’s Committee assigned the Department of Planning and Investment to complete the report, provide advice, and draft a submission from the Ho Chi Minh City People’s Committee to report to the Party Committee of the Ho Chi Minh City People’s Committee on the above issue. The Department of Culture and Sports is assigned to be the agency to carry out the task of preparing for the investment in the Phan Dinh Phung Gymnasium project under the public investment method.

The departments: Culture and Sports, Finance, Construction, and relevant units are tasked with reviewing the legal basis, reviewing the work that the investor has done, determining the reasonable costs, in accordance with regulations to serve as a basis for negotiation, discussion, and finalizing the project in accordance with the principles of reasonableness, harmony, and compliance with regulations. After that, at the end of May, the leaders of the Ho Chi Minh City People’s Committee will meet with the investor. The city plans to complete the project proposal dossier before July 2024 to submit to the Ho Chi Minh City People’s Council.

Decision Supported

In an interview with a reporter from the Nguoi Lao Dong Newspaper, Mr. Nguyen Nam Nhan, Deputy Director of the Department of Culture and Sports, confirmed the department’s viewpoint is to continue the Phan Dinh Phung Gymnasium construction project to meet the needs of sports activities in the central area, in line with the wishes of many generations of city residents to preserve and maintain the operation of a place of historical value as well as avoid wasting the “golden” land.

According to Mr. Nguyen Nam Nhan, the large investment and complicated investment form are just two of the issues that have caused the project to be stalled for the past 7 years, resulting in serious waste. Following the latest instructions from the Chairman of the City People’s Committee, the department is assigned to carry out the task of preparing for investment in the project, organizing the preparation of the project proposal dossier in accordance with the correct procedures and regulations, and completing it before July 2024. “The deadline before July 2024, although quite urgent, but the Department of Culture and Sports is still determined to complete it,” – Mr. Nhan affirmed.

Dr. Nguyen Huu Nguyen, Ho Chi Minh City Urban Planning and Development Association, commented that the city’s policy of switching from a BT project to a public investment project is very good. For projects of key importance and urgency, public investment capital should be used. If the city can arrange for funding and start working immediately, it will always be much faster.

If the Phan Dinh Phung Gymnasium project completes the procedures as directed by the Chairman of the Ho Chi Minh City People’s Committee to start construction on the occasion of the 30th of April next year – the 50th anniversary of the Liberation of the South, the reunification of the country, it will be very wonderful, and the people will be very supportive.

Also according to Mr. Nguyen, in the context that the city also has limited investment budget, calling for projects in the cultural and sports sector in the form of PPP (public-private partnership) is necessary. The city has the advantage of a superior mechanism from Resolution 98/2023 of the National Assembly allowing the calling for PPP projects in a number of areas. If the city takes full advantage of the ability to call for investment from these mechanisms and regulations, there may be many projects in the cultural and sports sector to meet the needs of the people.