The VND10 trillion (appropriate US$381 million) project began construction in 2016 under a public-private partnrship (PPP) model, specifically a build-transfer (BT) contract, in which the investor would be compensated with land.
The project aims to control tidal flooding across an area of 570 square kilometers, protecting about 6.5 million residents along the right bank of the Saigon River and the center of Ho Chi Minh City. However, it was suspended at the end of 2020 due to disputes over land payment and BT contract adjustments.
Following the directive of the Chairman of the Ho Chi Minh City People’s Committee, a special working group has been established to review land resources for payment and adjust the BT contract, in an effort to remove obstacles and restart the project.
As reported by the Ho Chi Minh City Department of Finance, the land plots at 420 No Trang Long Street, Binh Loi Trung Ward, and 257 Tran Hung Dao Street, Cau Ong Lanh Ward currently meet the conditions to be included in the BT contract negotiations.
The department also noted that the working group proposed that the VND10 trillion anti-flood project must be settled through land fund payments based on an equivalent value principle.
In case of final settlement, there is a discrepancy between the value of the BT project and the land fund, the difference will be compensated in cash.
To ensure proper compensation, the working group has proposed three additional land plots to be used for the BT contract payment. These sites include No. 232 Do Xuan Hop Street, 762 Binh Quoi Street, and Lot C8A, Area A of the New South Saigon Urban Area in Tan My Ward.
According to the Land Fund Development Center, the total value of the five land plots proposed as payment to the investor of the VND10 trillion anti-flood project is estimated at VND8,099 billion (US$308 million), accounting for 81.1 percent of the BT project’s value before adjustments to the total investment. These land plots have not yet had their planning criteria.
The municipal Department of Finance stated that to resolve the outstanding issues arising during negotiations, members of the working group have proposed that the Ho Chi Minh City People’s Committee authorize the group to negotiate directly with the investor to finalize the contents of the contract appendix.
The completed draft would then be submitted to the Standing Committee of the Ho Chi Minh City People’s Committee Party Committee for review and approval before signing.
