Hanoi (VNS/VNA) - The Government’smechanism to calculate the compensation rate for residents whose land it takesfor public purposes is "detached" from the market value instead ofrelying on it, leading to prolonged opposition and grievances from thoseaffected.

Such was the unanimous consensus by experts whogathered last week at a conference held in Hanoi on land policies andregulations, one of the ‘hot button’ issue as the country undergoes a boom in infrastructuredevelopment.

Assoc. Prof. Ngo Tri Long, an economist, claimedthat the Government’s limit on how much it is willing to pay only equals 20-30 percentof the market value.

“The low compensation makes those who have theirland expropriated feel unhappy and unwilling to co-operate during the landclearance process. During any project, land clearance is always one of thebiggest bottlenecks that severely delays progress,” Long said.

In Vietnam, the Constitution does not recognisethe private ownership of land but insist that land is owned by ’all people’,and the State is to represent this public ownership, managing the allocation ofland use rights to individuals or organisations and the transfer of land userights.

According to a report from the Supreme Court in2017, the lion’s share of mass complaints is land-related, with 74.6 percent ofthe cases the courts undertake having to do with land disputes.

The Hanoi People’s Committee’s Decision No 96determines the land price along several streets – including Hang Dao, HangNgang and Le Thai To – in the popular Old Quarter and nearby downtown area at 100-160million VND (4,300-6,000 USD) per sq.m. These figures are already among thehighest in the country, but are only a fraction of the real market value. Eachsquare metre of property along these streets could easily reach 500-800 millionVND, or even 1 billion VND, depending on the location.

The controversy that besieges the new Thu Thiemurban area in HCM City, which was originally envisioned to be one of the mostmodern and developed urban areas in Southeast Asia, is a typical case whereinadequate compensation for residents triggered mass protests and a sprawlinglawsuit that has endured for more than 20 years.

“The entire land valuation process is beingcarried out by State administration agencies, sidelining the very ones who havetheir land expropriated,” Long said, adding that in most cases, the landcompensation rate is arbitrary, without independent input.

The land law is an attempt to close the gapbetween what the Government could reasonably pay as compensation so as not togo over budget and the “market value," but no clear definition for theterm has been reached, Assoc. Prof. Hoang Van Cuong, Vice Rector of theNational Economics University and a National Assembly deputy said.

“Residents of course want the ‘market value’ tobe as close as possible to prevailing transactions in the area," he said,adding that the Government has not found any viable land valuation mechanism tobalance its interests and those of affected people.

Another land-related issue highlighted at theconference is the management and use of public land, which has come underscrutiny after the exposure of how lax supervision and legal loopholes have ledto severe losses of State assets and undermined the transparency of the realestate market.

Le Hoang Chau, Chairman of the HCM City RealEstate Association, pointed to selling State-owned land use rights to investorswithout going through a public bidding procedure, underselling State land viaobscurity-plagued equitisation of State-owned enterprises or via theBuild-Transfer (BT) model where the developers would receive certain land areasfor a public-use project they undertake, as usual ways for losses to happen.

There are also cases where State agencies ororganisations partner up with private businesses to develop or carry outprojects on the public land allocated to them, but the new land use price isnot updated when the land is now used for commercial purposes.

Chau urged the Government to soon issue a decreeon the use of State assets, especially land, to have a clear legal framework topay the correct value of land use rights to the projects’ investors that iscommensurate with their expenditures.

Nguyen Van Xa, former head of the public assetmanagement department under the finance ministry, said legal issues andviolations of the law undermine the gains from land, a highly valuableresource.

“One thing needs to be clear, selling ofState-owned land use rights must be done through a public, open biddingprocedure,” Xa said.

At the conference, experts urged the earlyimplementation of the national land management database where information couldbe accessed in a convenient and transparent manner by any citizen or interestedbusiness.

The Government would also need to come up withdetailed mechanisms that enable non-State actors, especially the public, tomonitor the land-related policies and raise the accountability of Stateagencies and officials in their decision-making.-VNS/VNA