Lotte Confirms Commitment to Eco Smart City Project in Thu Thiem Urban Area

The above information was presented by the CEO of Lotte Properties HCMC (a subsidiary of Lotte Group) during a meeting with the Ho Chi Minh City People’s Committee, chaired by Mr. Nguyen Van Duoc, Chairman of the City People’s Committee.

According to Mr. Nguyen Van Duoc, upon receiving the document from Lotte Properties HCMC regarding issues with the Eco Smart City project in Thu Thiem, city leaders promptly met with the investor to address their concerns.

On September 12th, the Ho Chi Minh City People’s Committee submitted a report to the Prime Minister outlining the investor’s requests, including the exemption of the 5.4% additional fee under Decree 103/2024, the adjustment of shareholding ratios among Lotte Group subsidiaries, and the allowance of external investors with a maximum stake of 35%.

The Government has requested relevant ministries to review and provide feedback on these proposals.

Lotte representatives stated that the group has held discussions with Ho Chi Minh City leaders regarding project challenges. The city has acknowledged these concerns and submitted a report to the Prime Minister.

To resolve these issues and continue the project, Lotte proposed three key points.

First, allow the group to adjust capital contribution ratios among its joint venture companies.

Second, approve external investors to contribute capital to the project, up to a maximum of 35%.

Third, consider waiving the additional financial obligation for land use fees.

The group also requested that authorities issue a new land use fee payment notice and revoke the previously issued one.

“We agree to continue discussions and proposals to proceed with the project. If our requests are addressed, we are committed to its implementation. Lotte confirms its commitment to immediately commence work if the city’s proposals are approved by the Government,” said Mr. Jun Sung Ho, CEO of Lotte Properties HCMC.

Mr. Phan Van Dung, representative of the Ho Chi Minh City Tax Department, stated that land use fee and land rent payment notices have been issued and sent to the company as per regulations. According to the law, the payment deadline has passed, resulting in a late payment penalty of VND 120 billion as of October 3rd.

During the meeting, Lotte requested a temporary suspension of the land use fee payment notice until the Government addresses their concerns.

However, the Tax Department representative noted that this request is currently not covered by existing regulations. Therefore, the Ho Chi Minh City People’s Committee must include this in their proposal to the Prime Minister for consideration.

Concluding the meeting, Mr. Nguyen Van Duoc affirmed that the city acknowledges and will forward Lotte’s requests. Ho Chi Minh City hopes the investor will continue its commitment to the project, contributing to the city’s development in the new phase.

The Chairman of the Ho Chi Minh City People’s Committee will discuss each investor request with relevant departments to find solutions.

Additionally, the Chairman stated that the city will issue an official press release immediately after the meeting to ensure transparency. This aims to reassure investors and prevent misunderstandings in public opinion.

“I urge Lotte Group and foreign investors to maintain confidence in Ho Chi Minh City’s investment environment. We pledge to support investors to the fullest extent within the legal framework,” Mr. Nguyen Van Duoc emphasized.

Previously, on August 20th, Lotte Properties HCMC sent a letter to the Ho Chi Minh City People’s Committee, expressing their intention to terminate the contract for the Thu Thiem Eco Smart City project in the new urban area of Thu Thiem.

The company stated its inability to proceed with the project, including fulfilling land use fee obligations, and requested contract termination and the return of the land allocation and lease decision issued on August 24, 2022.

Following Lotte’s announcement, another company submitted a proposal to the Ho Chi Minh City People’s Committee to take over the project.

However, the Department of Finance responded that there is no basis for considering this proposal, as Lotte remains the project’s investor according to regulations.

The Thu Thiem Eco Smart City complex in functional area 2A of the new Thu Thiem urban area has a total investment of nearly USD 1 billion (excluding compensation and site clearance costs). It is considered the most prime project in the Thu Thiem peninsula, located near the Saigon River tunnel exit, opposite the under-construction Empire City.

Lotte planned to invest in this mega-project over approximately 72 months, with a 50-year operation period.

In early July, Ho Chi Minh City approved the land price for Lotte’s Thu Thiem Eco Smart complex at VND 16,190 billion.