Golden land space waits for potential investors

VATM's golden land space waits for potential investors

The Vietnam Air Traffic Management, which manages the state-owned land plot, is seeking the Ministry of Transport’s (MoT) approval for its plan to exploit a large land plot at 58 Truong Son road in Ho Chi Minh City’s Tan Binh district, which leads towards Tan Son Nhat Airport.

As per the company’s (VATM) proposal, the plot would be turned into a mixed-use development consisting of workspace for organisations and businesses as well as office space for lease, a trade centre, and hotel components.

The VATM, which is a unit belonging to the MoT, contemplates holding public auctions to select investors to jointly establish an investment project in the business co-operation contract (BCC) form.

In its latest plan submitted to the MoT earlier this month, the VATM proposed making capital contribution with its existing assets on the land plot, but not in cash or other physical assets, to avoid affecting its core business lines.

At project completion, the VATM would receive part of the constructed area of about 5,000sq.m to serve as workspace for its member units, or to lease out to investors under market rates.

The investor would use the remaining area for business purposes as regulated in the business registration certificate.

Previously, in late 2015, the prime minister had approved the MoT’s proposal allowing the VATM to use existing assets and infrastructure on the land plot and seek suitable investors for project development to bolster business efficiency.

As of now, the VAMT unveiled that a raft of investors have expressed interest and sent proposals for business co-operation in the land plot‘s exploitation, including Vietnam Investment JSC, Vietnam Football Media JSC, Vietjet JSC and Sovico Holdings, and C.T Group.

According to VATM chairman Pham Viet Dung, besides Vietnam Investment JSC, other investors have only made initial proposals on business co-operation, leaving it impossible to assess investment plan efficiency.

In 2014, the VATM had reached an agreement with Vietnam Investment JSC on how to exploit the land plot. Accordingly, the project would be implemented under the BCC form and be divided into two phases.

In phase 1, the two sides would jointly exploit assets on the land and prepare for phase 2 investment.

In phase 2, the VATM would make capital contributions through compensation and site clearance cost (equalling the liquidated value of assets on the land), whereas the partner would bear the entire investment and construction cost, land use expense, and be responsible for operating and managing the work at completion.

Although negotiations were finished, the co-operative agreement between the VATM and Vietnam Investment JSC reached an impasse, as by that time, the government had enacted a decree banning state-owned businesses from making capital contributions to the real estate field, except with prior approval from the prime minister.

Dung said that after getting the prime minister’s approval, the VATM had worked with its partner Vietnam Investment JSC, and both advocated for seeking other potential investors to jointly exploit the well placed land plot.