Cheap land?
The traffic project connecting Provincial Road 514 and National Highway 47C, Trieu Son district is a project with a total initial investment of more than 79 billion VND, implemented by the Joint Venture of Tien Dat Construction Joint Stock Company - Viet Thanh Joint Stock Company (BT Trieu Son Company Limited). This is one of the last projects in Thanh Hoa province to be implemented in the form of public-private partnership, BT contract type (build - transfer), before this type was officially "terminated" (effective from January 1, 2021) due to many shortcomings, high risk of negativity, causing great loss of state assets.
To implement this project, Thanh Hoa province initially planned to use 5 beautiful plots of land, with a total area of nearly 28 hectares in Trieu Son town and neighboring communes of Trieu Son district to make counterpart payments for the project.
The BT project of the traffic road connecting Provincial Road 514 and National Highway 47C, Trieu Son district is under construction.
On that basis, on November 27, 2020, Thanh Hoa Provincial People's Committee allocated the first phase of land to the contractor joint venture, Trieu Son BT Company Limited, with a total area of 198,998.8 m2 (nearly 20 hectares), in Decisions No. 5086/QD-UBND, Decision No. 5085/QD-UBND, Decision 5084/QD-UBND. The remaining 2 out of 5 land plots expected to be paid in counterpart to Trieu Son BT Company Limited have not yet been handed over.
However, recently, Thanh Hoa province has officially decided to adjust the counterpart payment from 5 areas to only 3 land areas mentioned above, equivalent to a reduction of 9.3 hectares for the reason of "excess counterpart", after considering ensuring the principle of parity according to the provisions of the Law on Management and Use of Public Assets 2017, and Government Decrees and other relevant legal provisions.
In parallel with land allocation, Thanh Hoa Provincial People's Committee also issued a decision on approving specific land prices as the basis for determining land use fees paid to the State budget.
For example, on November 3, 2021, the People's Committee of Thanh Hoa province issued specific land prices as the basis for determining land use fees paid to the State budget to implement the Nam Cong Cheo new residential area project in Trieu Son town, Trieu Son district (phase 1). Accordingly, the specific land price corresponding to the land area allocated by the State with land use fees, after deducting costs (excluding site clearance costs) at this site calculated per square meter is 2,201,099 VND/m2.
The specific land price mentioned above is determined under the condition that the investor must invest in all technical infrastructure according to the investment project, the approved detailed planning for the land area assigned to implement the project and the State allocates land with land use fees for an area of 34,029.3 m2 of residential land. Notably, provisionally, with only the area and price at a Nam Cong Cheo project, the State basically collects over 74 billion VND, equivalent to about 93% of the counterpart capital on the total investment capital of the above BT project.
Nam Cong Cheo land has a very beautiful location, divided into 330 plots of land and utility works in Trieu Son district, Thanh Hoa. (Photo: Lam Linh Land)
Returning to the issue of determining land prices corresponding to the land area allocated by the State with land use fees collected at the Nam Cong Cheo new residential area project, according to Ms. Pham Thi Thu Huong, a practicing price appraiser, there are many methods to determine, however, normally in the above case, the determination of land prices will be carried out according to the surplus method and the equivalent market price at that time is only an input basis.
Specifically, determining land prices by the basic surplus method is calculated by taking development revenue minus development costs. In which, basic revenue is the money received after implementing the project, basic development costs include infrastructure investment costs, contingency costs, project management costs, advertising and sales costs... and "soft" costs such as commercial advantages, other costs according to regulations... and investor profits.
Joint venture "hits big" on BT Trieu Son project?
According to actual records, the new residential area project Nam Cong Cheo (commercial name is Trieu Son New Central project) since its opening for sale has immediately become a "hot" product in many newspapers, media, and is sought after by real estate floors.
According to the introduction from one of the above units, the new residential area project of Nam Cong Cheo has many favorable geographical location factors, very suitable for customers who plan to buy land for both residential and business purposes. Specifically, the North of the project is adjacent to Provincial Road 514 connecting to National Highway 47 connecting Thanh Hoa city with Tho Xuan International Airport; the West is adjacent to the 36m dual carriageway connecting National Highway 47C with Nghi Son - Sao Vang Expressway; the South is adjacent to the planning area of Xuan Hung high-class urban area with an area of 20 hectares... From the project, it only takes 20 minutes for people to reach Thanh Hoa city; 15 minutes to Tho Xuan Airport and within a radius of 500m is the cultural - sports center, hospital, Giat market, Trieu Son district administrative center, The City Supermarket, 50ha inter-commune industrial park...
Nam Cong Cheo land has a special location in Trieu Son district as described by the media. (graphic: Lam linh land)
In fact, at noon on July 15, Nguoi Dua Tin was present at the site of the Nam Cong Cheo New Residential Area project in Trieu Son district, in the role of a "land broker" (freelance real estate broker). The land has a very wide frontage, about 300m running along the central road of Dat town, while the depth is moderate, close to utility centers as advertised.
At the site, Nguoi Dua Tin approached a middle-aged woman who was selling water opposite the Trieu Son New Central project and was willing to double as a "land broker" and said that the site cost from 14 to 25 million VND per square meter, depending on the location.
“If you like to buy here, that’s fine, around 1.4 to 2.5 billion VND per lot. If not, I have another lot of land that I bought at auction last year, a few kilometers away, also on this road but further from the center, with an area of 100 square meters, when I bought it at auction it was nearly 1.7 billion, now I’m selling it for exactly 2 billion,” she said.
Expressing his interest in buying land at the Nam Cong Cheo project, Nguoi Dua Tin was introduced to a person named Toan, who was said to be a “relative” of the Director of one of the joint venture companies investing in the BT project. Because this person was on a business trip, he was introduced to a person named Cuong, who worked at the project.
According to Mr. Cuong, his plot of land is located on the street, purchased under a diplomatic quota, the selling price is about 25.5 million VND per square meter, equivalent to about 2.5 billion VND.
“The land here is beautiful, my lot is not in any way problematic, I was able to buy it under a diplomatic quota. However, to buy my lot, I have to build 4 floors to get the certificate, the remaining lots inside do not need to be built, just buy and get the certificate right away,” said Mr. Cuong.
According to Mr. Cuong, the amount of money collected from selling 330 plots of land is a lot, but to implement the project, the company also has to spend money to clear the land of about 120 sao of rice fields, each sao is 60 million VND, equivalent to about more than 7 billion VND. At the same time, the company also has to invest in technical infrastructure up to tens of billions of VND, investment capital for the BT project and importantly, other "soft" costs.
Thus, with the Nam Cong Cheo site, along with the remaining two sites, if lucky, the Joint Venture of Tien Dat Construction Joint Stock Company - Viet Thanh Joint Stock Company, which are familiar contractors when "winning" many projects in Thanh Hoa province, can completely "win big" in one of the final BT projects after deducting related costs.
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