HCMC proposes 5-year extension for Mercedes-Benz land lease

Ho Chi Minh City's government has suggested that the Prime Minister allow Mercedes-Benz Vietnam to lease for another five years a 10.5-hectare land lot for its factory in the inner district of Go Vap.

Mercedes-Benz Vietnam is a joint venture between state-owned Saigon Transportation Mechanical Corporation (Samco) and vehicle giant Mercedez-Benz. The joint venture’s 30-year lease of the land lot for its assembly factory is set to end in mid-2025.

The automaker had proposed a five-year extension of the lease in 2021, but it saw little progress since.

Under Decree 167/2017 and Decree 67/2021 on state asset management, the land lot in this particular case has to be recovered once the lease ends. The current legal framework does not provide details for the next steps like extending the land lease or making land use bids.

In the latest development on this issue, HCMC Chairman Phan Van Mai has called on the prime minister to handle the case as the latter can issue directions in special cases in line with the decrees.

City authorities have specifically suggested that the PM approve a five-year extension for the land lot as a solution for state asset management in this case.

They have noted that Mercedez-Benz Vietnam, a high-tech business, employs 800 locals and contributed VND5.5 trillion ($220.7 million) to the state budget ever year in the 2017-2021 period.

The extension will help the city retain its cooperation with Mercedes-Benz as a strategic partner and facilitate later relocation of the business into an industrial park specialized for automobile activities, municipal authorities have argued.

They have also emphasized that Mercedes-Benz Vietnam’s facility in Go Vap, one of the most crowded districts in HCMC, does not pose any environmental problems.