Decree 69 sees golf courses hit the rough

Hoang Cong Huan, director of Hong Lam Limited Company - developers of  the 222-hectare Madagui golf course project, said: “Most of new golf course projects in the province can’t go into operation as scheduled due to land compensation problems as a result of Decree 69.”

Huan said earlier last year, land prices withing Madagui project ranged from $6,312-$7,900 per hectare, calculated in accordance with the previous legislation, Decree 198, and based on the stipulated land price set by the municipal people’s committees at the beginning of each year.

However, Decree 69/2009/ND-CP, dated August 13, 2009 provides that land compensation is based on market land prices, and as a result, Madagui project’s  land prices have rocketed up to about $31,600 per hectare.

About 200 households, who had to  quit their land to make way for construction of the Madagui project, accepted the compensation. However, the rest of 16 households requested much higher pay and refused to negotiate. Hong Lam finally decided to narrow the scale of its golf-course from 18 to nine holes.   

“Decree 69 completely changed our initial plan, especially that compensation is far exceeding our calculations in advance and timeless negotiations with local residents about their compensation took us a lot of time,” said Huan.

The 335ha Madagui tourism area planned to get off the ground in December. It will include a 100ha horse-racing course, a nine-hole golf course and hotel, restaurant and villas.

Another project, the 440ha K’ren tourism area, developed by Korean-Vietnamese joint venture company in Hiep An commune, has been delayed for three years and faced fierce disagreements from local residents.

Pham Phuong Dung, director of Lam Dong’s Investment and Planning Department, said the K’ren golf course covered 120ha of paddy fields and agricultural land. Most paddy field owners disagreed with the compensation and those who handed  over the land  requested high compensation, at least $40,000 per hectare.

“Developers confirmed to try their best to build the project. However, it is not easy,” said Dung.

Korean-backed Jinsung Vina’s 250ha golf course project has also been delayed as its mother company, Jinsung Construction Corporation, went bankrupt. The corporation could be saved by the Korean government, but might not come back to Vietnam. Nguyen Thai Bao, a representative of Jinsung Vina, said: “Under Decree 69, land prices in Bao Lam commune jumped by four-times and that pushed up the investment capital.”

Chinese-backed Acteam International, the developer of 567ha Royale City Resort project, compensated residents in 2007 with land prices at only $9,000 per hectare and planned to open the first phase with nine holes of its 36-hole golf course in December.

However, the developers complained that after Decree 69 became effective, many people who received compensation two years ago returned to request more money.

Lam Dong province has six golf-course projects, of which one went into operation 18 years ago by Danao International Holdings.