State land no longer for let

It is hoped the new law will ensure better use is made of state premises and land

Sadly, this famous spot is likely to be shut down in the near future as the site will be handed back to the tenant – the state-owned National Cinema Agency.
According to Le Ngoc Khoa, deputy director of the department of Public Assets Management under the Ministry of Finance (MoF), Hanoi will see the closure of not only the bo tung xeo restaurant but also a number of other bars, restaurants and entertainment areas that are located on land hired from state-owned administrative agencies.
This is a direct consequence of a new regulation released by the MoF on the management of state-owned lands last week which comes into force within a fortnight.
The newly-issued Circular 83 stipulates that all state administrative agencies are not allowed to lease their lands or office buildings to third parties.
In other words, they are not allowed to make profit or do non-government business on their land because it is an asset that belongs to the State.
Agencies which have already leased their office buildings or land will have to withdraw the contract immediately and seize the rented areas.
“The new law aims to impose tighter controls on the use of state premises, which tend to be wastefully used for the wrong purposes,” said Khoa. “It will therefore help save a lot of money for the state budget.”
Khoa pointed out that for a long time there has been a very contradictory situation regarding land owned by state administrative agencies.
On one hand, there are some newly-established agencies that do not own land and therefore have to rent office space at standard market prices. The huge cost for renting these buildings is drawn from the state budget.
On the other hand, there are agencies who own large amounts of land and buildings that far exceeds their actual needs. The unused property is often put on the market for lease for businesses such as bars, restaurants, tennis courts or playgrounds. In principal, the rental fee should be collected and put back into the state budget but in reality the money always finds its way into the pockets of the agencies’ staff.
“That illegal use of public assets is unacceptable and must be stopped, no matter what the cost,” Khoa said.
However, Khoa’s determination does little to allay rumours among the public about whether the State has enough power to force its administrative agencies to strictly follow the new rule.
The problem is that most of the rental contracts for state land and premises are long-term leases and perfectly legal.
The unilateral termination of such contracts means that state agencies will have to compensate the tenants they evict.
The MoF has yet to determine where the funds will come from to finance such payments.
“We are aware that this is a complicated issue, similar to the issue of land clearance,” Khoa admitted. “But we will work hard to find the most appropriate solutions for each particular case.”
Khoa added that in cases where foreign partners are involved, special consideration will be given, but he refused to provide any concrete examples.
According to MoF statistics, 17 million square metres of land are currently provided to state administrative agencies.
However, Khoa said this figure was far less than the actual amount since the statistics were mainly based on reports from state agencies and most of those reports are not trustworthy.