Vingroup’s mega project contributes over $1 bln in land-use fees, land lease to HCMC’s 11-month budget

A mega urban project by Vietnam’s leading private conglomerate Vingroup (HoSE: VIC) contributed VND27.36 trillion ($1.04 billion) to Ho Chi Minh City’s budget revenue in the first 11 months of this year, the local government said.

Can Gio Tourist City Corporation, a Vingroup subsidiary, paid VND21.7 trillion ($822 million) in land-use fees and nearly VND5.66 trillion ($214.87 million) in land lease for its Vinhomes Green Paradise project, a large-scale sea encroachment tourism-urban development.

The figures were disclosed in a report by the municipal People's Committee on the city's 11-month socio-economic situation.

The payment helped lift the city’s 11-month budget revenue to VND709.92 trillion ($26.97 billion), up 15.3% from a year earlier, fulfilling 105.7% of the full-year target.

The city’s land-use fee collections surged 323.7% year-on-year to VND52.91 trillion ($2.01 billion) in the period.

In April, Vingroup broke ground on the project, which is estimated to cost VND217.05 trillion ($8.44 billion). With a scale of 2,870 hectares, a population of 230,000 people, and special ecological advantages, it seeks to become a leading ESG urban area in the world, according to a Vingroup release.

Vinhomes Green Paradise is located in Long Hoa commune and Can Thanh township, all in the coastal district of Can Gio, about 50 km southeast of HCMC's center. It will be connected to the inner city via the HCMC-Can Gio high-speed urban railway, with a maximum speed of 250 km per hour.

Last month, HCMC authorities aproved the land price for Novaland Group’s (HoSE: NVL) flagship Nam Rach Chiec development, known as Lakeview City, marking a major step toward resolving long-standing legal and financial bottlenecks that have stalled the project for years.

The total land-use and leasing fees, previously estimated at nearly VND5.18 trillion ($196.66 million) under a 2021 tax notice, will be recalculated under the new assessment. The revised valuation will serve as the legal basis for Novaland to begin issuing land-use right certificates to Lakeview City homeowners.

Lotte Properties HCMC Co., Ltd. has expressed its wish to proceed with its smart city project in Thu Thiem New Urban Area after having sought to terminate it.

In a meeting with local authorities in October, CEO Jun Sung Ho said Lotte is seeking approval to adjust the shareholding structure among its member companies for internal restructuring, permission to bring in external investors with stakes of up to 35% for capital addition, and an exemption from the 5.4% supplementary land-use fee.

The VND20.1 trillion ($761.8 million) Lotte Eco Smart City project broke ground in September 2022, yet it has not taken shape to date, reportedly due to legal entanglements including “exorbitant” land use fees.