The Steel Company’s Six-Year Standoff: City of Ho Chi Minh Issues Eviction Notice, No Compensation

On June 2nd, Binh Tay Steel Mesh JSC announced that it had received a document from the Ho Chi Minh City People’s Committee regarding land retrieval at 165/5 Nguyen Van Luong Street, Ward 10, District 6, and 792 Pham Van Chi, Ward 7, District 6.

The notice informed of an enforced retrieval of land in accordance with legal regulations. Additionally, the document stated that there was no legal basis to consider compensation for assets on the land or investment costs.

Moreover, authorities will inspect and review any administrative violations committed by Binh Tay Steel Mesh JSC. If the case exceeds their jurisdiction, the People’s Committee of District 6 will forward the case to the appropriate authority for handling.

These two plots of land have been embroiled in violations for many years without a comprehensive resolution. In the company’s 2024 annual report, it was mentioned that on May 11, 2018, the Ho Chi Minh City People’s Committee issued a decision to retrieve the two plots of land leased to the company in 2006, citing that the land was state-owned and leased for a limited period without extension.

Specifically, the Ho Chi Minh City People’s Committee entrusted the Land Development Center under the Department of Natural Resources and Environment to take charge of the two plots of land for auction as directed by the Prime Minister. They were also tasked with coordinating with relevant departments and units to establish a plan for supporting and relocating assets on the land (if any) as per regulations.

On May 17, 2018, the company submitted an appeal to the Vice Chairman of the Ho Chi Minh City People’s Committee, requesting that the city administration refrain from retrieving the two plots of land and allow the company to continue its investment project at 165/5 Nguyen Van Luong, Ward 10, District 6.

On June 8, 2018, the People’s Committee’s Office issued Document No. 6265/VP-DT, forwarding the appeal to the Department of Natural Resources and Environment for consideration and implementation as per regulations. On June 11, 2018, the Land Development Center issued Document No. 499/PTQD-THD, requesting the company to hand over the two plots of land before June 23, 2018.

In response, the company sent two letters dated June 13, 2018 (Document No. 76/CV-VDT), and June 28, 2018 (Document No. 85/CV-VDT) to the Land Development Center, requesting them to determine the value of the company’s assets on the two plots of land and provide compensation and support for relocation before the handover.

The assets at 165/5 Nguyen Van Luong, Ward 10, District 6, included:

• A one-story office building with a floor area of 128 square meters.
• A brick wall factory with a zinc roof and a concrete floor, covering an area of 2,973.2 square meters.

These assets were appraised by the company in a fixed asset liquidation report dated December 30, 2009, with a residual value of VND 1.4 billion to prepare the site for handover as per the contract for the Hong – Binh Tay Apartment Project. 

The assets at 792 Pham Van Chi, Ward 7, District 6, included:

• A one-story office building with a floor area of 120 square meters.
• A brick wall factory with a zinc roof and a concrete floor, covering an area of 1,060.2 square meters.

These assets were not in use for production, and their residual value was VND 529.2 million. They were being leased out by the company.

In response to the company’s requests, the Land Development Center issued several documents stating that the assets on the two plots of land were not eligible for compensation. The company would only receive support for the cost of dismantling and relocating its remaining assets on the land. Regarding the support for relocation costs, the Center requested the company to submit a relocation plan and cost estimate for approval by the competent authority. The company was also required to hand over the two plots of land before June 23, 2018.

On November 1, 2019, the company sent a document to the Provincial People’s Committee, requesting them to reconsider the decision and allow the company to continue its investment project at 165/5 Nguyen Van Luong, Ward 10, District 6, Ho Chi Minh City. The company also emphasized that the determination of compensation and support for assets on the land should be made by the competent authority, as the company lacked the function to do so independently.

For the past five years, the company has neither handed over the two plots of land to the Land Development Center nor stopped paying land rent as per the annual rent notices.

Binh Tay Steel Mesh JSC was privatized in 2013, with the Vietnam Steel Corporation (VnSteel), a unit under the Ministry of Industry and Trade, as its major shareholder, holding over 40% of the shares. 

A representative from VnSteel shared that based on Ho Chi Minh City’s planning for the two plots of land, which were to be used for urban, service, and commercial purposes, the company had collaborated with two other enterprises to request permission from the Ho Chi Minh City People’s Committee to change the land use purpose and construct high-rise apartments with commercial services.

Notably, before obtaining permission for land use purpose conversion, Binh Tay Steel Mesh JSC had leased the two plots of land to numerous individuals and organizations for parking lots, restaurants, factories, and warehouses.

According to Nguoi Lao Dong newspaper, over the years, while leasing the two plots of state-owned land (after the land use certificate had expired), Binh Tay Steel Mesh JSC had paid the state only about VND 270 million per year for the land at 165/5 Nguyen Van Luong. However, the amount earned from subleasing the land was not disclosed in any reports.