Usilk City urban area project case in Hanoi referred to police for investigation over alleged violations

Vietnam's Government Inspectorate has decided to refer the case related to the expanded Van Khe urban area project (Usilk City) to the Ministry of Public Security for investigation and handling in accordance with the law, after identifying a number of wrongdoings.

Usilk City was among the 23 urban area and residential projects in Hanoi inspected by the inspectorate recently, with findings released on Monday.

The project was assigned by the former Ha Tay People's Committee (Ha Tay province was merged into Hanoi in 2008) to Song Da-Thang Long JSC as the project developer despite the company not meeting required financial capacity conditions.

The developer also signed property transfer, home sales, and loan contracts, and issued bonds, raising a total of VND8.46 trillion ($321.37 million). However, VND5.3 trillion ($201.33 million) of the funds was used for improper purposes, resulting in project delays, with more than 750 apartments yet to be handed over.

The above-said inspection focused on compliance with laws governing land management and use, urban planning and construction permitting in Hanoi. The Government Inspectorate delegation identified a series of longstanding violations during the 2011-2022 period, with wrongdoings found across most stages of the 23 projects.

The agency pointed out that the Hanoi People's Committee has not developed implementation plans for government resolutions on restructuring and handling land and housing assets. It has also failed to fully review land use at equitized enterprises and has been slow in issuing land use right certificates, particularly for commercial housing projects.

The management of the 20% land fund reserved for social housing has also shown serious violations. During the inspection period, eight projects larger than 10 hectares failed to allocate the required 20% land quota, four were allowed to make cash payments in lieu of land but have not done so, and three allocated insufficient land area in accordance with regulations.

Moreover, the city has not separately tracked revenue generated from this land fund and has not allocated budget resources for social housing development, despite the funds collected being “substantial”, raising concerns over inefficient use of land resources. Notably, as many as 10 projects that have already set aside land have yet to see state-funded social housing development.

In urban planning, many projects have been slow to implement and of low quality, requiring repeated revisions. Localized adjustments to planning have become widespread, including the conversion of public land into residential land in already densely populated areas, placing significant pressure on urban infrastructure.

Other violations include the selection of developers without competitive bidding, land allocation without auction, and investment approvals issued beyond authorized competence.

During construction management, many violations were not detected or addressed in a timely manner, while enforcement and demolition measures were not stringent enough, leading to the legitimization of violations.

Illegal and non-compliant construction, along with population density increases exceeding planning limits, has become widespread, placing significant pressure on transport infrastructure, schools and the urban environment.

Given this, the Government Inspectorate has recommended that the Prime Minister direct the Hanoi People's Committee to implement a series of corrective measures.

The city needs to review all projects and fully address violations related to land, planning and construction, particularly at equitized enterprises, while accelerating the issuance of land use right certificates, according to the agency.

For the social housing land fund, Hanoi must ensure sufficient land allocation at non-compliant projects, require developers to implement projects on schedule, or recover the land for reassignment to other entities. Where implementation is not carried out, proceeds from the 20% land fund should be used for state-budget-funded development.

The agency also called for a review and adjustment of master plans in a manner that strictly controls population density and avoids legitimizing violations, while recalculating land-use fees for projects with revised planning.

In the construction sector, the city is required to improve its architectural management regulations, tighten the issuance of building permits, and strictly handle non-compliant projects.