At the Credit Conference for Real Estate and Social Housing Development organized by the State Bank of Vietnam (SBV) in coordination with the Ministry of Construction on November 13, a representative of Novaland said that the Group is implementing a cluster of projects in the central area of Ho Chi Minh City, the Aqua City project, the NovaWorld Ho Tram project and the NovaWorld Phan Thiet project.
The above projects also receive active support and funding from commercial banks such as TPBank, MBBank, VPBank, PVcomBank.
However, projects, whether handed over or under development or undergoing project development procedures, still face legal problems that have not been resolved.
The legal "iceberg" is gradually being removed but has not yet achieved high efficiency
In 2023, the direction of the Prime Minister and the Special Task Force has touched on most of the hot spots that need to be resolved. This is a positive and breakthrough signal to break the legal "iceberg" that has existed for many years. However, in the actual implementation process, we found that there are still two important difficulties that make the resolution not very effective.
Novaland representative at the Credit Conference for real estate and social housing development. Photo: SBV
First, with the Ho Chi Minh City project cluster, currently 2 Novaland projects are being prioritized by the Ho Chi Minh City People's Committee to remove obstacles from the beginning of 2023. Currently, Novaland is still waiting to receive an early conclusion from the City to remove the final legal difficulties at the 100 Co Giang Apartment Project (The Grand Manhattan) and the 32ha Binh Khanh Project (The Water Bay). These are two projects that Novaland has seriously committed to fully arranging the area for social housing and resettlement. In particular, the 100 Co Giang Apartment Project (The Grand Manhattan) has completed the handover of resettlement.
Second, with the Aqua City project (Dong Nai), this is a key project of Novaland that is facing many legal problems. At the same time, Novaland has more than 70,000 billion VND to collect according to the progress from customers at this project, waiting for the approval procedures to be cleared to continue maintaining cash flow for project development.
“This is the project we transferred from Dona Coop and has all the legal documents such as paying the land use fee, having the 1/500 planning approved and the Provincial Party Committee approving the transfer of the residential land project. However, because we requested to adjust the 1/500 planning to suit the market on the basis of maintaining the approved criteria, many problems still arise,” said a representative of Novaland.
Since the beginning of 2023, based on the direction of the Prime Minister, the People's Committee of Dong Nai province has allowed the investor to prepare and submit for appraisal the adjustment of the detailed planning 1/500 in parallel with the approval of the C4 subdivision planning project. In addition, the competent authority has created conditions for the investor to continue to invest in construction and sales of items in accordance with the approved detailed planning to fully implement its commitments to customers.
However, the approval progress of the project to partially adjust the General Planning 1/10,000 and the C4 Sub-Zone Planning has been prolonged in the past time, which has greatly affected the progress of approving the adjustment of the Detailed Planning 1/500 of the projects, construction legal procedures, and sales legal procedures.
Next, at the NovaWorld Ho Tram project (Ba Ria - Vung Tau), the Provincial People's Committee directed strongly to remove difficulties and speed up legal procedures. Currently, basically all problems have been resolved and some procedures have been completed. However, Novaland found that there are still many lengthy administrative procedures that slow down the project's progress. These are core issues when the project investment period is usually allowed to be 24 months, but in reality, the enterprise has spent up to 18 months to resolve legal procedures.
Finally, one of the Group's key projects - NovaWorld Phan Thiet (Binh Thuan) also recorded some positive signals from the legal side. Specifically, the project has completed the approval of the detailed planning adjustment 1/500 for all items for the entire project. In addition, Binh Thuan province is also taking the next legal steps to adjust the form of land rental payment from annual to one-time payment at the project. Currently, the Group is waiting for the Decree amending Decree 44/2014/ND-CP to be issued to determine land use fees, complete legal procedures to sign sales contracts with customers.
Novaland representative stated that in 2023, the State Bank of Vietnam has issued many timely instructions to provide maximum support to the business community in accessing capital. However, for Novaland, legality is a key factor because the company still has a large amount of receivables from sold products, but if the legal issues are not resolved, the bank will not release the temporarily locked money and at the same time, it will be a barrier for banks to disburse new capital as well as continue to finance home buyers.
This led to the Company having to delay the construction and handover of houses to customers, causing very serious consequences: failing to keep its commitments to customers, unable to boost the huge cash flow receivable from sold products. The cash flow was blocked and Novaland had to pay tens of billions of VND in interest every day, negatively affecting investment efficiency, wasting social assets and the survival of the Group.
Novaland wants more support on legal and loans
Novaland representative requested the Prime Minister to direct the early issuance of a Decree amending Decree 44/2014/ND-CP in order to have a final plan for land use management; calculating land use fees at Novaland projects and stalled projects nationwide.
Novaland wishes to provide further legal and loan support. Illustrative photo
This real estate company also hopes that the People's Committees of provinces/cities will complete the master plan, creating conditions for real estate businesses to develop projects in sync with assigned targets.
Novaland proposes that the Government and the National Assembly consider reviewing and improving the Investment Law so that the Investment - Land Allocation - Planning - Construction Permit Process can take place quickly, transparently, and save capital for society.
Novaland hopes that the Government will have solutions to thoroughly resolve problems related to unsynchronized legal procedures, problems over time and not retroactively; ministries, departments and branches will have policies to reduce taxes and extend corporate income tax for real estate enterprises to remove difficulties and focus on stabilizing business in 3 years (2022, 2023 and 2024).
In terms of credit access, Novaland proposed that the State Bank and the Government unanimously support in restructuring loans and reducing interest rates for projects to be implemented in the next 2 years (2024 and 2025) to extend payment flows for businesses.
The State Bank of Vietnam has amended and supplemented Circular 08/2020/TT-NHNN, allowing credit institutions to use up to 34% of short-term mobilized capital for medium- and long-term lending as at present, instead of 30%. This will enable reasonable use of short-term mobilized capital for medium- and long-term lending, as well as improve access to credit for businesses and people, without posing safety risks to the credit system.
Novaland hopes that the State Bank will consider extending the debt to a maximum of 24 months according to Circular 02 (instead of the current maximum of 12 months), applied to both corporate and individual customers to meet the requirements of comprehensive debt restructuring and remove difficulties for the economy.
Source
![[Photo] Prime Minister Pham Minh Chinh chairs Government Conference with localities on economic growth](https://vstatic.vietnam.vn/vietnam/resource/IMAGE/2025/2/21/f34583484f2643a2a2b72168a0d64baa)
Comment (0)