DIC hardens up its resolve

A Development Investment Construction Joint Stock Corporation (DIC) official told VIR the company did not see the property market fluctuation as a key factor for re-considering its investment strategy, or delaying sales.

“Our target is long-term investments, these fluctuations are short-term only. They could turn around at any time,” he said.

However, the official admitted that since the implementation of Decree 69/2009/ND-CP and Decree 71/2010/ND-CP, the products would be launched next year, instead of this year as previously expected.

Decree 69, the official said, would raise the compensation expenses compared to the previous regulation.

The previous legislation, Decree 198, stipulated that compensation for the land would be based on the stipulated land price set by provincial or municipal people’s committees at the beginning of each year.

However, Decree 69 in effect from September 2009, states that compensation expenses would be based on real prices in the current market. This made the compensation costs triple compared with the previous regulation.

Accordingly, compensation for every square metre of land in the project would increase to more than VND200,000, compared with only VND38,000 under the former regulation.

So far 65 hectares of the project have been compensated under the former regulation. The remaining 130ha will be compensated under the new regulation.

This increase will impact the price of the products, so the company will have to re-calculate pricing levels before launching anything on the market.

Moreover, the above official also said that the newly-issued Decree 71 was unclear on times for investors to call on capital from customers.

“We hoped that Circular 16/2010/TT-BXD would provide detailed guidelines for the implementation of Decree 71. However, we are still unsure on the capital mobilizing conditions stated by this circular,” he added.

With construction beginning in December 2009, DIC is developing a new urban area in Vinh Phuc province, a satellite city of Hanoi.

Developed on an area of around 447ha, the future new urban area will accommodate 30,000 residents when completed in 2023.

It is located in Vinh Phuc province under the command of Dong Tam, Lai Quang and Hoi Hop wards of Vinh Yen, Binh Xuyen and Yen Lac districts.

Located at the gateway of Vinh Yen district, about 50km from Hanoi and about 30km from Noi Bai airport, the area is near National Road  2A, which is currently undergoing expansion, near the highway linking Hanoi and Viet Tri city.

The project will be divided into three phases and will end in 2023. The first project will be developed on an area of 200ha and will be completed in 2013.

The area will consist of public and serviced land for kindergartens, schools, health care centre, hotel and trading centre, villas, semi-detached houses, apartments in high rise buildings and social houses and land for gardens and lakes.

DIC is a popular company listed on the Ho Chi Minh Stock Exchange since September, last year. It is implementing many huge projects including the Chi Linh urban area in southern Vung Tau city, the Dai Phuoc Eco-tourism urban project in southern Dong Nai province and the Ba Sao Entertainment and Eco-Tourism area in Ha Nam province.