Inspection Conclusion on the $90 Million Hotel and Apartment Project in Khanh Hoa

The inspection agency has conducted an inspection of the Mixed-Use Complex Project, comprising a hotel, services, and apartments (the Project), developed by Nha Trang Bay Joint Stock Company. The project is located at 25-26 Pham Van Dong Street, Bac Nha Trang Ward, Khanh Hoa Province.

The project has a total investment of over VND 2,052 billion and began construction in 2017, with substantial completion achieved. According to reports, the investor has sold all 704 apartments and commenced operations, but buyers have not yet received their property ownership certificates.

The inspection conclusion highlights that there is no documentation indicating that the Ministry of National Defense prepared a plan for the rearrangement and handling of the land and property at 25-26 Pham Van Dong Street, submitted to the Prime Minister for approval after obtaining input from the Ministry of Finance and Khanh Hoa Provincial People’s Committee, or reached an agreement with the Khanh Hoa Provincial People’s Committee and reported it to the Prime Minister for endorsement.

The Signal Corps Command, Ministry of National Defense, agreed in principle to transfer the land at 25-26 Pham Van Dong Street, Vinh Hai Ward, former Nha Trang City, Khanh Hoa Province, to the Khanh Hoa Provincial People’s Committee for allocation to Nha Trang Bay Joint Stock Company to execute the project without a land use rights auction, which violates the 2003 Land Law and regulations on the use of defense land.

Additionally, the inspection agency found that the Provincial People’s Committee’s allocation of land to Nha Trang Bay Joint Stock Company without a land use rights auction also violates the 2003 Land Law.

The Provincial People’s Committee approved a specific land price for calculating land use fees for the project, which was lower than the land price announced in 2014. The committee also allowed Nha Trang Bay Joint Stock Company to deduct VND 72 billion in compensation and support payments from the project’s land use fees, which is not in compliance with regulations.

The Khanh Hoa Provincial People’s Committee has not yet determined the land price following the adjustment of the 1/500 detailed construction planning. The inspection agency clearly states that responsibility for the identified issues, limitations, and violations lies with: the Ministry of National Defense, Signal Corps Command, Signal Officer Command and Technical Academy, and related organizations and individuals during the 2010-2014 period; the Provincial People’s Committee, Department of Natural Resources and Environment, Department of Finance, Provincial Tax Department, and related organizations and individuals over various periods; and the investor.

Based on the inspection results, the Government Inspectorate recommends that the Prime Minister direct the Minister of National Defense to, within their authority, organize a review and clarify responsibilities for handling, in accordance with regulations, the involved collectives and individuals from the 2010-2014 period related to the identified issues, limitations, and violations in the project.

The Khanh Hoa Provincial People’s Committee and its Chairman, within their authority, should organize a review and clarify responsibilities for handling, in accordance with regulations, the involved collectives and individuals over various periods related to the identified issues, limitations, and violations in the inspection conclusion.

The Government Inspectorate recommends that the Ministry of National Defense organize and direct a review and clarification of responsibilities for handling, in accordance with regulations, the involved collectives, individuals, organizations, and units related to the identified issues, limitations, and violations in the project.

Simultaneously, they should inspect and review the management and use of the VND 72 billion compensation and support payment (VND 55 billion to the Ministry of National Defense and VND 17 billion to Thanh Thanh Tourism LLC and CYBEER LLC), which the Khanh Hoa Provincial People’s Committee agreed to deduct from the project’s land use fees.

This includes scrutinizing the VND 17 billion compensation and support payment to Thanh Thanh Tourism LLC and CYBEER LLC, which poses a risk of state budget loss. If any legal violations are discovered during this process, they should be addressed in accordance with regulations.

The inspection agency also recommends that the Khanh Hoa Provincial People’s Committee and its Chairman direct the review and clarification of responsibilities for handling, in accordance with regulations, the involved collectives, individuals, organizations, and units related to the identified issues, limitations, and violations in the inspection conclusion. They should also instruct relevant agencies, units, and individuals to focus on addressing and thoroughly rectifying the identified issues, limitations, and violations. If any indications of criminal violations are found during this process, they should be referred to the competent authorities for consideration and handling in accordance with regulations.