Vietnam - Thu Thiem out of land for residential projects

The opening of Thu Thiem Tunnel and the East-West Highway to traffic has helped facilitate development of Thu Thiem new urban area, which covers 657 hectares to accommodate around 110,000 to 120,000 people.

The Saigon Times Daily had a talk with Trang Bao Son, deputy head of the Investment and Construction Authority of Thu Thiem New Urban Area, over investment attraction in the area.

Excerpts:

The Saigon Times Daily: Can you tell us about the investment situation at the new urban area?

- Trang Bao Son: The opening of the Thu Thiem Tunnel and the East-West Highway to traffic has a great impact on property projects at Thu Thiem new urban area. Local authorities have appointed contractors for two projects next to the highway, a multifunctional tower and a low-rise residential project in southern An Loi Dong ward, or the residential project no. 2. We are also preparing for international bidding for the neighboring residential project no. 3. There are seven bidding applications for southern residential projects. Besides, we are calling for investors for high-rise office and multifunctional buildings along the highway.

Other areas are under compensation and site clearance, which is expected to finish at the end of this year to carry out key projects at the center of Thu Thiem such as an international convention center, the central square, and the international financial and commercial center.

Some say that inadequate infrastructures are challenging investors. How is infrastructure development now?

- First, there are four arterial roads of the urban area, namely the Arc Avenue, the Lakeside Road, the Riverside Road and the Flyover-Delta Valley. The four roads are the backbone of technical infrastructure, creating a connection with other roads. The city government has appointed Vietnam Infrastructure Development and Finance Investment Joint Stock Company as investor of the projects. The company is making designs and expects to start work at the end of the third quarter of 2012. We are working with District 2’s government to hand over land for the roads.

Some people say the government has to develop public works to help speed up others. What do you think about that comment?

- Everybody understands that conditions are needed to make a bustling urban area, including technical and social infrastructure. Investors also understand that such urban areas need a lot of preparation. Sometimes, it is necessary to build works at the same time, not build projects after the roads. The project upon progress may also destroy finished roads. The building progress must be fast, but if we have suitable adjustments in planning, we can ensure timely progress and concurrence of the works.

The core center is the most important part of the project, especially the international financial center. VietinBank is the investor of the center and it will hire consultants and suggest solutions. If the solutions get approval, the city will let Vietinbank and other banking investors expand important projects. The city will begin investment for other works like the central square, the riverside park and public works when the 1/500 scale plan finishes, probably at the end of next year.

Investors now can have cleared land immediately to develop projects as 97% of land has been compensated. Why are they still hesitant?

- Investment cost at Thu Thiem remains higher than elsewhere, at over US$3,000 per square meter. The Government has regulated the floor price for bidding to protect the city’s investment. This factor hampers investors and they are still confused at their projects.

Although high investment cost is a difficulty, it is a factor for ensuring long-term quality of projects. Thu Thiem is an urban development project, not a property trading project that can be sold off to recover capital. There is no place for speculators here and investors have to follow plans, procedures and investment progress. So, investors have to consider their financial capability.

When will the new urban area be finished?

The city has plans to have an urban area in 2015. This is a big challenge for us.

Reported by Dinh Dung

Saigon Times

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