3:26:21 PM | 7/8/2005
Urgent Issues on Land and Production Areas for Enterprises to be Addressed Soon
To optimise land rent and use, and help enterprises overcome difficulties in land and production areas, the Vietnam Chamber of Commerce and Industry (VCCI) and the Ministry of Natural Resources and Environment organised a dialogue with enterprises on
Land is a special commodity, an asset of high value which boosts the competitiveness of enterprises in the market economy, and in particular
One of the important changes in the 2003 Land Law is the equality between different economic sectors. Accordingly, all State-owned and private enterprises are equal before the law in land use, the rights and obligations of land users, administrative procedures for land allocation, land use right reception, and procedures for the implementation of the rights of land users. This was welcomed by investors. However, according to the results of a survey conducted by VCCI, there are still some urgent issues in State management, planning and allocation of land for enterprises.
Enterprises said that ministries and agencies with functions of consulting the Government in the land field were assigned to develop legal documents for the National Assembly to approve, but localities are in charge of developing master plans, allocating and managing land. Some other ministries and agencies also get involved in management according to their specific features. This has created a management overlap, causing difficulties for enterprises when they want authorised agencies to help them address land issues. Also, the development of master plans has focused on regions only, but not socio-economic effectiveness. Furthermore, enterprises have to pay land rent but cannot use their land use right as mortgage and capital contribution, or lease their land.
Answering questions from enterprises about the fact that some localities cause problems for investors in site clearance, Mai Ai Truc, Minister for Natural Resources and Environment, said that a new draft decree on the Land Law would break this barrier, clarifying which kind of land would be recovered by the State and which kind of land enterprises would be able to transfer, lease and use land as capital contribution. This mechanism will facilitate enterprises’ dynamism and autonomy. The Government will no longer interfere in negotiations between investors and land owners in land rent for production and business purposes.
Senior officials from the Ministry of Natural Resources, VCCI and relevant agencies, representatives from the People’s Committees of cities and provinces, and around 200 enterprises discussed the issues in an open atmosphere. Mai Ai Truc affirmed with enterprises that the Ministry of Natural Resources and Environment as an agency consulting the Government in land management would make further efforts in co-operating with other relevant agencies to help enterprises address their urgent issues, helping them gain the best results in their production and business activities.
Land prices should be based on the income of enterprises
Vu Duy Thai, Vice Chairman of the
The Land Law stipulates that all economic sectors are equal before the law in land rent and use. However, small and medium-sized enterprises and newly-established enterprises have budget constraints while land rent is often very high. In my opinion, the Government should calculate land rent based on the income of enterprises.
Presently, in some places conflicts occur between enterprises and those who lease their land (i.e. local authorities and people) because those who lease their land add their requirements after the two parties have signed agreements. This has troubled investors. I propose that the Government should act as the intermediary when enterprises negotiate on land rent. Also, localities should be unique in addressing procedures with investors.
Enterprises’ use of production areas should be examined
Tran Thu Huyen, Director of My Binh Company
The Land Law stipulates that there is no priority for any enterprise of any economic sector when they rent and use land. However, State-owned enterprises use State budgets to rent land while private enterprises have to use their own assets as mortgage. This is a disadvantage for private enterprises, especially small and medium-sized ones. Even though the law stipulates that there is no priority, State-owned enterprises enjoy financial subsidies.
As far as I know, in the Quang Minh industrial park in Vinh Phuc province, many land lots have been rented for three years but are yet to be used. Meanwhile, many enterprises need land for their production and business activities. Why are these lands yet to be recovered and leased to other enterprises in need of land? Management agencies should examine closely enterprises’ use of production areas. If enterprises rent land but do not use it, management agencies should recover these lands to avoid waste.
Government should provide financial support for enterprises in site clearance
Nguyen Trung Thuc, chairman of the Vietnam-Germany Association of Small and Medium-sized Enterprises
Presently, many people ask for increases in land rent or cause problems for investors. I propose that the Government should provide a legal assurance for all transactions between investors and local authorities and people.
Another urgent issue for small and medium-sized enterprises is site clearance costs. We all know that this cost is often huge while small and medium-sized enterprises face budgetary constraints. I think that the Government should bear this cost and allow enterprises to pay the Government later when they begin their production and business activities.
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