Thanh Hoa Province inspectors have pointed out numerous violations and wrongdoings at the “Ecological Urban Area Along the Banks of Do River” project, developed by HUD4 Investment and Construction Joint Stock Company.
For your information, the “Ecological Urban Area on Both Sides of Do River” project was approved by the Thanh Hoa Provincial People’s Committee as a project using land for investor selection, according to Decision No. 4602/2010/QD-UBND on December 23rd, 2010.
The project spans 68.68 hectares and was built along both sides of the Do River in Sam Son Town (now Sam Son City). The project is scheduled to be completed between April 2012 and April 2023 after an extension.
Overview of the ecological urban area project on both sides of Do River.
According to the Inspection Conclusion, Sam Son Town People’s Committee improperly calculated only the construction value of technical infrastructure projects (642.787 billion VND) in the preparation of bidding documents, the invitation of investors for residential land, service land, commercial land, and high-rise apartment building land without calculating the value of building rough houses, service, commercial, and high-rise apartment buildings into the floor price, thus, affecting the assessment of the investor’s capacity when selecting the investor, which is a violation of Section 2.3, Clause 2, Part III of Circular 03/2009/TT-BKHDT.
In addition, Circular 03/2009/TT-BKH dated April 16th, 2009 of the Ministry of Planning and Investment does not provide for bidding or auctioning of land use fees. Therefore, the floor price for selecting investors as stipulated in Section 2.3, Clause 2, Part III of the Third Circular does not include the land use fees payable. On the other hand, Decision 3563/QD-UBND dated October 28th, 2011 of the Thanh Hoa Provincial People’s Committee only stipulates that: “land use fee of VND 133,927,184,000 is the minimum amount used to prepare bidding documents and select investors”; “The value of the land use right according to the above plan is used to prepare bidding documents for the selection of investors to implement the project using land and is valid for 03 months from the date of approval by the Chairman of the Provincial People’s Committee for implementation”. Therefore, Sam Son Town People’s Committee’s inclusion of land use fees in the bidding documents is a violation of the regulations.
Upon inspection of the determination of land use fees for the first phase (Phase 1), it was found that the adjustment of the detailed planning for the ecological urban area project on both sides of the Do River was last approved by the Provincial People’s Committee in Decision No. 4172/QD-UBND dated October 19th, 2015 (before the decision on land allocation for the first phase in Decision No. 3467/QD-UBND dated September 14th, 2017). Therefore, the land allocation for the first phase was the first time that the Thanh Hoa Provincial People’s Committee allocated land, and the land area allocated to the investor was the area according to the adjusted plan.
On the other hand, before the determination of “additional land use fees”, the Thanh Hoa Provincial People’s Committee had not determined the land use fees (at the time of the decision on land allocation) at any time. Therefore, the Thanh Hoa Provincial Tax Department has not yet had a basis to issue the Notice of Land Use Fees Payable and, therefore, has not determined that HUD4 Company has fulfilled its financial obligations for the land area allocated in the first phase (40,493m2).
Therefore, the determination of land use fees in this case is not made in accordance with Clause 1, Article 10 of Circular 76/2014/TT-BTC.
Regarding the amount of VND 120,989,994,167, “Value of land use rights for the area allocated in Phase 1 before the planning adjustment” stated in Submission No. 1206/TTr – STNMT of the Department of Natural Resources and Environment, the Minutes of the Meeting, and Notice No. 4256/HĐTĐGĐ dated 12/10/2018 of the Land Price Appraisal Council; Submission No. 1274/TTr – STNMT of the Department of Natural Resources and Environment, and Decision No. 4172/QD- UBND dated 24/10/2018 of the Provincial People’s Committee.
The inspection found that before September 2018, the Thanh Hoa Provincial People’s Committee had not yet determined and approved, and the Thanh Hoa Tax Department had not yet issued a Notice on land use fees payable to the state budget for HUD4 Company to implement (the state budget has not yet tracked this amount).
Therefore, the Department of Natural Resources and Environment’s formulation and submission of land price plans, the Land Price Appraisal Council’s appraisal of the results, and the Department of Natural Resources and Environment’s submission to the Provincial People’s Committee for approval of “additional land use fees payable to the state budget due to the adjustment of the Detailed Planning of the Ecological Urban Area Project on both sides of Do River: VND 1,752,548,000” (in Decision No. 4172/QD- UBND dated October 24th, 2018) while there has been no Decision approving the value of land use rights for the area allocated in Phase 1 before the planning adjustment, the amount of VND 120,989,994,167 is a violation of Clause 1, Article 10 of Circular 76/2014/TT-BTC and Clause 3, Article 108 of the 2013 Land Law.
The above actions of the Thanh Hoa Provincial Department of Natural Resources and Environment and the Provincial Land Price Appraisal Council have resulted in the omission and underestimation of the land use fees that the investor must pay to the state budget for Phase 1, amounting to VND 120,989,994,167. Until the time of the inspection, no competent authority had monitored the amount of VND 120,989,994,167 payable to the state budget.
Sam Son City People’s Committee has issued documents requesting that HUD4 Company pay the land use fees (Phase 1) into the temporary account of the Finance Department with the number 22,734,284,298 VND. The amount of land use fees determined at the time of the decision on land
