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Vietnam Business » Vietnam Real Estate Market News » West West Lake goes north

West West Lake goes north

The deadlocked West West Lake urban area project is about to get moving again. Land clearance and compensation problems appear to have been partly addressed after compensation expenses from the foreign developer were transferred to the capital city.

A representative from the South Korean-backed T.H.T Development Company, the developer of the 207-hectare township next to the Hanois West Lake, declined to comment on the case. However, the Hanoi Peoples Committees Centre for Land Fund Development confirmed the news.

"The foreign investor has transferred VND67 billion ($3.5 million) to compensate the first 105 households at the project site. This transfer is the main factor to make the project go ahead, after more than three years of delays," said Tran Huy Dung, director of the Centre for Land Fund Development.

The West West Lake project has been delayed due to the re-structuring of investor and then land compensation price changes. Developed by a South Korea consortium led by Daewoo Engineering and Construction, the project was licenced in February, 2006 with investment capital of $314 million.

In the same year Daewoo merged with Kumho and the implementation of Daewoo projects in Vietnam was also slowed down. The project the jumped back to life in 2008 when Daewoo split from Kumho.

However, after Decree 69/ND-CP on land prices, withdrawals, compensation and resettlement was put into force in October, 2009, it increased land clearance and compensation costs up to VND7.6 trillion ($400 million), a VND2 trillion ($105 million) jump compared to the previous estimation.

The increase made the foreign investor re-assess the projects feasibility. In a meeting held last week between the investor and Hanoi Peoples Committee and related bodies, Hanois mayor Nguyen The Thao said that the land clearance and compensation activities were too slow, caused by the weak coordination between the developer and citys authorities.

Thao required the developer and citys authorities to take responsibility for this slowness and review all activities to speed up compensation. Thao also requested the investor and citys authorities to finish land clearance and compensation activities of the first 117 hectares before October, this year.

Thao said the land lot reserved for the Thang Long Theatre must be ready by September, to allow for the ground-breaking ceremony to cerebrate Hanois 1,000th year anniversary in October.

Compensation will be divided into two phases. The first phase will clear more than 117ha belonging to 1,420 households in Tu Liem districts Xuan Dinh and Co Nhue communes. The first phase will be implemented within six months with total expense of VND1.9 trillion ($100 million).

The second phase will clear 90ha in Tay Ho districts Xuan La commune and Cau Giay districts Nghia Do commune with total expenses of VND5.75 trillion ($302 million).

Vietnam Business And Financial News Network. Source [english.vietnamnet.vn]

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