Unveiling the Truth: Exposing FLC’s Project Scandals on Prime Real Estate

Mr. Do Viet Hung, Chairman of Pleiku City People’s Committee (Gia Lai), said that the Provincial People’s Committee has assigned the Provincial Inspectorate to advise and implement the next steps to handle in accordance with regulations the FLC Commercial Hotel and Townhouse Complex project (at No. 29 Nguyen Van Cu Street, Pleiku City) invested by FLC Group, with an area of 3.1 hectares.

According to Tien Phong‘s investigation, on July 19, the Government Inspectorate concluded its inspection of the Provincial People’s Committee’s responsibility in managing and using agricultural and forestry land; sand, soil, and gravel exploitation; and investment construction management in Gia Lai Province.

This conclusion highlights the violations in the FLC Commercial Hotel and Townhouse Complex project at 29 Nguyen Van Cu Street.

Specifically, the project was put up for land-use right auction to select an investor, but after two auctions, FLC was the only participant, so the auction was unsuccessful. The People’s Committee of Pleiku proposed that the Provincial People’s Committee allocate and lease the land to FLC.

From there, several violations occurred during the project implementation. Particularly, the Department of Natural Resources and Environment issued a decision on the selection of a land price appraisal consultant, with signs of adding document numbers to legalize the Provincial People’s Committee’s previous decision to approve the land price appraisal plan. In addition, the Department signed a contract with a consulting unit to determine the specific land price before the decision on approving the auction of land-use rights was issued, violating Clause 1, Article 6 and Clause 1, Article 9 of Inter-ministerial Circular No. 14/2015 dated April 4, 2015, of the Ministry of Natural Resources and Environment and the Ministry of Justice.

Furthermore, the Government Inspectorate also pointed out that the Southern Information and Valuation Company, during the process of determining the specific land price (using the surplus method), included bank loan interest expenses (for two years) in the calculation method, contrary to regulations, leading to a reduction in the value of the land lot to be appraised.

Additionally, the decision No. 1653 dated August 16, 2019, of the People’s Committee of Pleiku City adjusted the criteria for conditions and application dossiers for auction participation, setting extremely high criteria compared to the project scale, limiting the participation of other investors. After two auctions, FLC was the only participant, and the actions of the People’s Committee of Pleiku City did not ensure competition, fairness, and transparency in the auction of land-use rights, creating an advantage for FLC to be allocated land and leased land without going through an auction, with a fixed starting price, potentially causing state budget losses due to the unchanged land price.

Notably, the Gia Lai Provincial People’s Committee issued Decision No. 523 dated November 10, 2018, on the adjustment of the master plan, in which the land lot at 29 Nguyen Van Cu was added with a commercial townhouse item, which was inconsistent with the purpose and function of the land lot according to the previously approved master plan. The People’s Committee of Pleiku City adjusted the detailed planning but did not make a plan for the adjustment of the urban planning, did not fully collect the opinions of the community, and did not publicize it as prescribed, violating the procedures and processes for adjusting the detailed planning.

On the other hand, according to the planning and land-use plan for 2018, the land lot for the project had the purpose of being a cultural facility. However, on March 1, 2019, the People’s Committee of Pleiku City approved the detailed construction planning of the FLC Commercial Hotel, Supermarket, and Townhouse Complex project, violating the 2013 Land Law, causing inconsistencies between the land-use planning and the construction planning.

The implementation of the construction planning adjustment, which changed the function of the land lot (from an exhibition and commercial center to a residential function), also violated the 2009 Urban Planning Law.

Moreover, the project has other violations, such as not extending the land-use schedule for an area of over 7,400 square meters, causing budget losses; the public works and technical infrastructure of the project must be completed before May 21, 2020, to be handed over to the People’s Committee of Pleiku City, but the construction progress was slow, and the Provincial People’s Committee did not require FLC to pay land rent after the deadline, resulting in budget losses; and dividing the land lot to issue separate land-use right certificates for 90 land lots when the houses had not been built yet, contrary to regulations.

Given these violations, the Government Inspectorate has identified the responsibility of the Chairman of the People’s Committee of Pleiku City, along with the directors of the Departments of Planning and Investment, Finance, Natural Resources and Environment, and Construction, the Southern Information and Valuation Company, and related organizations and individuals during the respective periods. The case has been referred to the Ministry of Public Security for handling in accordance with regulations.