In the first two months of this year, nearly 600 businesses in Quang Nam province had to temporarily suspend operations, while the number of newly established businesses was only about 1/4 of this figure. From the beginning of the year, Quang Nam province has focused on implementing solutions to remove difficulties for businesses and restore production and business activities.
Mr. Luong Nguyen Minh Triet, Secretary of the Quang Nam Provincial Party Committee (in a suit) listens to the project investor’s report on difficulties encountered during the project implementation.
Many real estate businesses in Quang Nam province said that they had never faced such difficult situations as now. After a long period of being affected by Covid-19, real estate project investors are facing a series of pressures from loans, land clearance progress, tax debts, and land use rights certificates debts. Many businesses have to dissolve or go bankrupt; some businesses are operating hesitantly. Many real estate projects have been “stalled” for a long time due to difficulties in land clearance when local residents do not agree. The current compensation price is too low according to the current regulations, and people in the project area do not agree with the approved plan and do not receive compensation. Land clearance obstacles have created more difficulties for real estate businesses.
A group of real estate and construction businesses are facing many difficulties.
Some real estate businesses have mentioned the current situation where the land clearance costs that investors have spent a large amount of money have been kept in the budget for a long time. The time to complete 100% of the land clearance to settle the entire project takes a long time, with some projects lasting more than 10 years, while businesses are lacking financial resources.
Real estate businesses in Quang Nam province have suggested that the provincial People’s Committee soon have solutions to remove a series of current difficulties. Businesses believe that the procedure to extend the progress of real estate projects encountering land clearance obstacles, in which the responsibility of local authorities is not required to ask for opinions from departments and branches. However, in reality, this procedure still has to be carried out, taking a lot of time.
Mr. Le Tu Tam, Chairman of the Dien Ban Town Business Association, Quang Nam province, said that real estate businesses are facing countless difficulties, especially in accessing capital. Businesses have suggested that Quang Nam province consider a mechanism for investment phased allocation for real estate projects according to the approved plan. Projects that have completed more than 50% of land clearance, completed infrastructure systems and legal procedures, Quang Nam province should create conditions to issue land use right certificates to help businesses stabilize their financial situation and continue to implement projects.
Mr. Le Tri Thanh, Chairman of the Quang Nam Provincial People’s Committee (on the right) inspects the progress of key projects in Quang Nam province.
Mr. Le Tu Tam, Chairman of the Dien Ban Town Business Association, Quang Nam province, suggested: “For the province to be able to implement the investment plan in phases, businesses must ensure the completion of all financial obligations. We hope that Quang Nam province will consider applying this mechanism to support real estate businesses facing current difficulties. There are businesses that have borrowed hundreds of billion VND from banks to pay taxes to the state, but the projects have not been extended, leading to banks not allowing project owners to borrow, and they still have to bear the pressure of previous loan interest as well.”
Construction businesses in Quang Nam province are also facing difficulties as construction material prices, from transportation costs to the construction sites, are much higher than the prescribed rates. For over a year, construction material prices have increased compared to the initial estimates. The prices of sand and land for foundation filling have increased, causing businesses to incur more losses.
Mr. Phan Ngoc Minh, Chairman of the Quang Nam Young Entrepreneurs Association, said that during the period affected by Covid-19, the Government and Quang Nam province had a mechanism to reduce land rent by 30% for businesses operating in the construction material production sector. However, by 2023, the land rent will double compared to 2022, while during this period, businesses are facing many difficulties.
Some real estate projects in Quang Nam province are delayed due to land clearance obstacles.
“The natural resource tax rate in Quang Nam province is VND170,000 / m3 of raw land. This price has been adjusted by Quang Nam province 7 years ago (in 2017), but it is still much higher than some other provinces and cities such as Thua Thien Hue, Binh Dinh, Gia Lai, Kon Tum… which apply the rate of VND70,000 / m3 of raw land to VND110,000 / m3 of raw land”. said Mr. Phan Ngoc Minh.
According to the data from the Quang Nam Provincial Tax Department, in the first two months of 2024, the whole province only had 143 newly established businesses, while there were up to 595 businesses temporarily suspending business activities. This figure also reflects the difficulties that businesses in Quang Nam province are currently facing. How to remove difficulties for businesses at this time?
From the beginning of the year until now, the Standing Committee of the Quang Nam Provincial Party Committee has organized many task forces to go directly to project sites, meet and dialogue with businesses.
Mr. Le Van Dung, Deputy Secretary of the Quang Nam Provincial Party Committee, surveys the production and business situation of businesses in the province.
Mr. Le Van Dung, Deputy Secretary of the Quang Nam Provincial Party Committee, affirmed that businesses play a crucial role in the province’s economy, and if the difficulties that businesses are currently facing are not resolved in a timely manner, Quang Nam’s socio-economic development will be very difficult to achieve the goal of becoming a relatively developed province in the country by 2030.
“We must be responsible for removing difficulties together with the business community in general, in which we need to pay attention to real estate businesses. With the province’s responsibility, this is a big issue, so the participation of authorized agencies is necessary. For example, when extending projects, it must go through the Provincial People’s Council. These issues must be addressed as soon as possible because businesses are facing difficulties and cannot wait.” Mr. Le Van Dung demanded.
