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BUSINESS IN BRIEF 14/5
Foreigners grab bigger stakes in HHS
Two foreign investors recently purchased a 11.45 per cent
stake in Hoang Huy Investment and Service Joint Stock Company (HHS).
The Ton Poh Thailand Fund last week bought more than 5.9
million HHS shares, amounting to a 5.32 per cent stake.
Established in
At the same time,
HHS, which was established in the northern
In the real estate market, HHS owns the
HHS earned its largest-ever revenue of VND1.123 trillion
($51.9 million) and after-tax profit of VND246 billion ($11.38 million) in
the first four months of 2015.
The group said it would hold the general meeting of
shareholders on May 18 in
HHS share, which was listed on the HCM City Stock Exchange in
2012, yesterday closed at VND22,900 ($1.06).
Syrena Viet
Syrena Viet
Little Vietnam, which covers 3.3 ha in the Halong Marina Urban
Area and features linked infrastructure with the central city of Ha Long-a
popular tourist spot in Quang Ninh Province, has a unique architectural
design which replicates Ha Noi's Old Quarter and Hoi An's Ancient Town but is
still in harmony with contemporary designs.
The project, expected to be put into operation in November
this year, attracted a large number of investors for its comfortable
accommodation and promoting profits, with all of the units it released for
sale being bought within two months.
"Winning this Asia-Pacific property award will help to
showcase our ongoing efforts to provide real estate products that meet the
highest international standards and quality measures," Syrena Viet Nam's
Deputy General Director Le Minh Dung said.
Dung said the award would provide an impetus to Syrena Viet
PVGas appoints new general director
The PetroVietnam Gas Joint Stock Corporation (PVGas) has
appointed Duong Manh Son as its general director and a member of the
management board of the company.
Son, who holds degrees in mechanical engineering and business
management, had been the deputy general director of the firm since 2009. He
has been working in the oil and gas sector since 1994.
The company said in an online statement that Son had
"well accomplished heavy responsibilities in the business activities of
PVGas, in particular, and the gas industry in general."
In April, the firm said it had earned nearly VND73.65 trillion
(US$3.51 billion) in total turnover and VND14.37 trillion ($684.28 million)
in after-tax profits – the highest profit among businesses listed on the
domestic stock market – last year.
Lam
Authorities of the Central Highlands
The provincial People’s Committee, the Japan International
Cooperation Agency and the Vietnam Academy of Social Sciences are conducting
a project to assist Lam Dong in developing its multi-sector farming approach
and improving its business climate, said Vice Chairman of the provincial
People’s Committee Pham S.
It is focused on establishing an agriculture zone, a
post-harvest centre and a flower wholesale market in Da Lat while modernising
vegetable and flower cultivation, marketing and workforce training as well as
increasing studies for mid and long-term development.
The Japanese ambassador and accompanied economists and
enterprises pointed out local strengths and weaknesses including limited
access to capital, sporadic production and weak brand protection and
recognition.
Minister of Agriculture and Rural Development Cao Duc Phat
asked for Japanese support in applying Good Agriculture Practice standards
and improving food hygiene.-
Ha Giang businesses attend customs dialogue
The first 2015 customs-business dialogue in the northern boder
Since last year, the provincial Customs Department has
streamlined customs bureaucracy in an attempt to stimulate export-import
activity, said Deputy Head Le Ngoc Hieu at the dialogue, adding that Ha
Giang, which shares a borderline with
It also consulted with the provincial People’s Committee on
infrastructure upgrades in border and wholesale markets, especially those in
rural areas as well as in the Thanh Thuy, Xin Man and Pho Bang border
economic zones.
Participants were also updated on new legal regulations at the
event.
From 2011-2014, the locality recorded cross-border trade worth
over 2.1 billion USD.
From January-April 2015, total export-import value approached
60 million USD with nearly 40 billion VND (1.9 million USD) contributed to
the State budget.-
Finance Ministry proposes inspection of essential commodity
prices
The Ministry of Finance has sent a document proposing
authorized agencies nationwide to intensify inspecting the price of essential
commodities and relevant taxes and fees, aiming to prevent them from
irrationally rocketing after petrol and electricity price increases.
Average electricity price has moved up while petrol price has
also hiked twice since early this year, which might affect production costs
and prices of some goods and services.
Therefore, the ministry proposed the agencies to keep a close
eye on goods supply, demand and prices in local and international markets in
order to stabilize prices and curb inflation across the country.
Relevant agencies should strictly handle those raising their
prices unsuitable with input costs and market prices. Names of the violators
will be publicly announced on the media.
Vietnamese police have demanded that two local men refund an
advance of $415 to two Dutch travelers who canceled a tour offered by the
men, local media reported.
Police officers in the central province of Thua Thien-Hue on
Monday said they had obliged two men, Tran Van Vinh and Le Van Thanh, both
31, to return VND9 million ($415) to Susan Reiniera Erna, 25, and Lisette
Dollekamp, 23, two women of Dutch nationality.
According to their May 3 complaint to police, the Dutch women
hired Vinh and Thanh to drive them from
During the trip, Vinh offered to the foreign guests a five-day
tour from Hoi An to Nha Trang, a seaside town that is the capital of the
south-central
Both the Dutch women agreed and each of them paid VND4.5
million as a deposit to the two men, the portal of Thua Thien-Hue police
said.
The foreign tourists informed Vinh over the phone later the
same day that they wanted to cancel the tour, as they would be unexpectedly
busy during the duration of the tour.
Vinh replied to the women that he would repay only VND2
million to each of them and requested that the women return to
On May 2, the two women came back to
After an investigation, police officers summoned Vinh and
Thanh for questioning and they then handed in VND9 million to police to
return to the foreign tourists.
T&T
wants to invest in Ha Noi Railway Station
The T&T Group has requested the transport ministry to
allow it to invest in the Ha Noi Railway Station.
The group said it would abide by current regulations and
ensure a construction schedule to meet the travel requirements of the local
people and tourists.
Ha Noi Railway Station was established in 1902 by the French
colonialists. It was rebuilt in 1976 and has become one of the largest train
stations of the country.
Earlier, property giant Vingroup offered to buy Ha Noi, Sai
Gon and
The plans by private companies to invest in the railways are
in response to the government's policies, which allow various economic
sectors to invest in the rail sector to modernise it and ease the burden on
public funds.
Transport Minister Dinh La Thang had asked the Vietnam Railway
Corporation (VRC) and related entities to plan a road map for selling the
operational rights of railway stations, to attract more investors and to
issue bids to choose the best offers.
VRC said it had to spend VND7 trillion (US$322.58 million) in
the 2011-15 period to upgrade the network and introduce new technologies to
manage the operations.
By 2020, an estimated VND2 trillion ($92.2 million) more will
be needed for continued implementation of these plans, and VND60 trillion ($2.79
billion) for 12 projects to modernise the main routes.
Earlier this year, the T&T group also requested the
ministry to allow it to buy Phu Quoc international airport in the southern
Established in 1993, T&T group operates in the fields of
finance, industry, minerals, real estate and export. It has a charter capital
of VND2.5 trillion ($115 million).
GE expertise, technology strengthens
GE’s Digital Energy, part of US-based energy giant General Electric,
today announced it successfully upgraded and energised 14 of the 18 series
capacitor banks at the Da Nang–Ha Tinh, Phu Lam–Pleiku and, most recently,
the Nho Quan–Ha Tinh transmission lines.
The upgrade marks the latest project milestone for the company,
which has continuously been advancing
“Increased energy demand is putting increased stress on the
grid – both in
“By collaborating with local companies and leveraging our
history and expertise providing advanced series compensation systems to our
customers, we’re able to relieve Vietnam’s grid stress and increase overall
reliability, ensuring the well-being of the country’s economy and residents
in the process,” Turko added.
In 2011, electricity demand in
With demand expected to escalate an additional 16 per cent
over the next four years, electricity shortages were virtually unavoidable.
Understanding the implications to its economy and its 89
million citizens, the country has created a long-term plan to address
electricity shortage, centering on
To support necessary growth in the existing transmission
system, Electricity of Vietnam (EVN) and the National Power Transmission Corporation
(NPT) needed 18 series capacitor banks throughout the country in a tight
timeframe. Based on its proven expertise in the design and deployment of
Flexible AC Transmission Systems (FACTS) within the region, GE’s Digital
Energy business was chosen by EVN and NPT to install and upgrade these
capacitor banks.
Key to GE’s success is its focus on localisation. To better
understand
“We take pride in our ability to use local companies and
resources,” said Turko. “By combining our knowledge with that of Vietnamese
resident experts, we’ve successfully been able to navigate local challenges
and strengthen the country’s electricity – together.”
GE shares a long history energising
GE’s Energy Consulting arm, along with the Electricity Regulatory
Authority of Vietnam (ERAV) and Ministry of Industry and Trade (MoIT), also
recently completed a year-long “renewable energy integration study” aimed at
developing wind power as a reliable energy source into the national grid.
The project was funded by the US Trade and Development Agency
(USTDA) under the Grant Agreement between the
AusCham to host HCMC urban development seminar
The Australian Chamber of Commerce (AusCham)
The seminar’s keynote speaker, Nguyen Thanh Nha- vice director
of Ho Chi Minh City Department of Planning and Architecture- will deliver
speech on the department objectives as well as how it believes it can lead
the city’s growth in a stable and positive manner.
Nha will also discuss other related issues such as the effect
of climate change from a local and global perspective, the role of heritage
buildings in a development city, zoning and legal changes that may impact
developers and project owners.
The seminar will also offer perspectives from highly regarded
industry representatives.
For example, Khuong Van Muoi, a renowned architect and vice
president of the Vietnam Architectural Association, will speak on the role of
green architecture in the city’s development whereas Nguyen Ha Trang, deputy
director of APAVE Asia Pacific, will speak on practices and techniques to
effectively tackle risks facing projects in
Deputy general director of Saigon CO-OP Investment and
Development, Pham Trung Kien will share the needs and experiences from the
part of a leading local retailer.
The seminar offers AusCham members and partners great access
to government and industry leading experts who are key decision makers and
influencers in the local market.
It also promises to be an important opportunity for attendees
to gain understanding and insights into the ongoing and fascinating urban
development of
Japanese stationery firm to build third factory
Japanese stationery supplier King Jim Co. Ltd planned to build
its third plastic paper file factory in
The 9,000-square-metre plant is expected to be built at a cost
of 700 million yen (US$5.88 million) near the existing factories in
In addition to facilities in
It is set to reduce the manufacturing of 3 million products in
A King Jim representative said
In the Japanese market alone, paper file sales in 2014 rose by
20 percent from the previous year to 53 billion yen ($445.37 million),
indicating a need for the company to expand its operations to meet domestic
demand.
VietinAviva opens first agent office in Hanoi
Life insurer VietinBank Aviva (VietinAviva) on May 9
officially opened an agent office in
VietinAviva, which started operation in October of 2011, is a
joint venture between
“VietinAviva inherits the value of Aviva and the prestige and
support of Vietinbank,” said VietinAviva’s general director Nguyen Ngoc Trang
at the opening ceremony.
In 2015, VietinAviva is going to open agent offices in
In 2014, VietinAviva’s premium grew by 264 per cent on year.
The company is one of the three life insurers with the highest growth in the
year.
Singapore company seeks to expand Vung Ang Port
Freight Link Capital based out of
As proposed the wharfs would be operated by a 100% foreign
owned entity. The venture to alleviate the overcrowded port has already been
given the green light by the management board of the Vung Ang Economic Zone.
Once constructed the two wharfs would span a total length of
500m capable of handling vessels of up to 50,000 DWT with the added capacity
to service cargo and containers for not only the Formosa Ha Tinh Steel
Complex but the entire region.
Li Weimin, Freight Links Capital President said the two
additional wharfs are needed to meet the future projected demand for
unloading cargo, machinery and equipment and clear congestion due to
increasing cargo volumes.
38th
ADFIAP to be held in Nha Trang
The 38th Annual Meeting of the Association of Development
Financing Institutions in Asia and the Pacific (ADFIAP) is scheduled to be
held in Nha Trang, in the Central Coastal
Themed ‘DFIs and Sustainable Infrastructure: Policy Framework,
Operational Best Practices and Challenges’, this year’s meeting is hosted by
the Vietnam Development Bank (VDB). The event expects to welcome hundreds of
delegates, mostly CEOs and senior officials, from over 30 countries.
According to Nguyen Quang Dung, Chairman of the VDB Board of
Management, the conference aims to provide a good opportunity for ADFIAP
members to exchange experience as well as seek opportunities for co-operation
to overcome challenges, to develop towards a green economy, to improve
institutional capacities and maintain sustainable development for the common
benefit of the respective nations.
Other highlights of the annual meetings include the 21st
Ordinary Meeting of the General Assembly, the 81st Board of Directors
Meeting, the Conference Proper, Delegate-Meets-Delegate session, the ADFIAP
Awards 2015 and the Fellowship Tour.
ADFIAP is the focal point of all development banks and other
financial institutions engaged in the financing of development in the
Asia-Pacific region. Its mission is to advance sustainable development
through its members. Founded in 1976, ADFIAP currently has 131 member-institutions
in 45 countries.
ADFIAP is also a founding member of the World Federation of
Development Financing Institutions, comprising of regional associations in
Africa, Asia-Pacific, Latin America and the
Techcombank lends VND2 trillion to VNPT
Vietnam Technological and Commercial Joint Stock Bank
(Techcombank) last week struck a deal to make a loan of over VND2 trillion
(US$92.3 million) for Vietnam Posts and Telecommunications Group (VNPT) to
fund its operations.
The credit is part of a comprehensive cooperation deal between
Techcombank and VNPT. The lender will offer 40,000 staff of VNPT banking
products and services with preferential policies and help collect telecom
charges via its nationwide network for the group.
In addition, VNPT will get consulting from Techcombank on cash
flows and payment management to save costs and optimize the efficiency of its
operations.
Meanwhile, VNPT will assist Techcombank’s branches and
transaction offices nationwide in telecom and information technology
services, including data transmission within
VNPT will also design products and services appropriate to
Techcombank’ employees including those for mobile phones and the Internet
MyTV.
Sai Gon home furnishing fair comes to Hanoi
The 2015 Vietnam furniture & home furnishing fair (VIFA
HOME Sai Gon) will come to Hanoi for the first time from August 6-9, bringing
about 110 exhibitors with 418 pavilions.
The fair will be a networking venue for industry stakeholders
and consumers, making it easier for them to extend distribution channels as
On display will be interior and exterior decor, wooden toys
and furniture for offices, restaurants, hotels, resorts, condominiums and
design consultation services.
For the first time, the organising board will launch an online
showroom where exhibitors can introduce their products and services at the
lowest possible costs.
Head of the Ministry of Industry and Trade’s Domestic Market
Department Vo Van Quyen said the domestic wood industry is worth 2-2.5
billion USD annually.
The event is hosted by the HAWA, Lien Minh Wood Handicrafts
Jsc, the Ministry of Agriculture and Rural Development’s Agro-Forestry-Fisheries
Processing Department and the Vietnam Wholesale.
Tra Vinh to enhance SME management
Result-based management (RBM) of small- and medium-sized
enterprises (SME) is the focus of a training course that kicked off on May 12
in the Mekong Delta
The three-day training course, part of activities of the
Canada-funded SME development project, aims to enhance the capability of
project management staff in applying RBM tools.
Dr Ngo Tho Hung from the Asian Institute of Technology in
The project was launched earlier this year with a total
investment of 11.7 million USD, 11 million USD of which was sourced from the
Canadian Department of Foreign Affairs, Trade and Development.
It will be carried out over six years with three major
components: developing major local products, improving local infrastructure
facilities and enhancing the capacity of public management staff.
It targets 200 local enterprises and more than 194,000
residents in 20 remote communes across the province.
Dak
Lak works to attract foreign investment
The Central Highlands
The projects are mainly in agricultural products and animal
feed processing, bio fuel manufacturing, trade and services, said Y Dham
Enuol, Deputy Standing Chairman of the provincial People’s Committee.
An Indian-invested coffee processing factory with a capacity
of 10,000 tonnes per year is now the biggest and most effective FDI firm in
the locality, he said.
Dak Lak also has 23 ODA projects worth a combined 8.3 billion
VND (382,381 USD) together with a number of grants worth 23.89 million USD
from non-governmental organisations for poverty reduction and social
welfares.
However, the official held that the investments are still
modest and make limited contributions to the socio-economic growth of the
locality.
Enuol said the province will urge local Departments of Foreign
Relations and Planning and Investment to provide information on local
projects and policies to call for more investments.
The province will also propose the Foreign Ministry help
introduce Dak Lak’s potential to foreign investors while supporting the
locality in choosing suitable partners for long-term partnerships.
Meanwhile, the province will organise trade promotion
programmes to fully tap its potential, contributing to improving local living
conditions, added the official.
Trade cooperation boasts huge potential for
Enterprises from
This forecast has arrived after the Vietnam Chamber of
Commerce and Industry on May 12 held a meeting with the Korean companies and
signed a cooperation agreement with Daegu Technopark .
Hee Jun Cho, from the research institute Deagu Technopark,
said that RoK enterprises have recently shown great interest in
He hoped that with support and cooperation from the two
countries’ governments and business communities, the two sides will realise
their potential in trade and investment exchanges.
Pham Quang Thinh, Deputy Head of the VCCI’s International
Relations Division, said the RoK is one of
Thinh said besides many bilateral and regional trade and
investment agreements, the two countries recently signed the Vietnam-RoK Free
Trade Agreement (FTA), providing a legal framework for policy enforcement and
trade exchange.
The RoK has 4,140 valid projects in
Quang Tri to foster community involvement in state budget
management
An 810,000 EUR project will be implemented in central Quang
Tri province to encourage the local community’s participation in State budget
management.
The project was launched at a conference on May 12 in Quang
Tri by the provincial Women’s
The project, funded by the European Union, will be carried out
from April 2015 to March 2018. In that time it aims to enhance awareness
about the issue for more than 6,000 women and disadvantaged people living in
six communes in Gio Linh and Hai Lang districts.
It also aims to strengthen the role, competency and
responsibility of People’s Councils – which directly represents local
residents - at all levels in supervising public budget usage.
Under the project, beneficiaries are expected to get deeper
understanding about public budget collection and spending, and involve
themselves in the process via local programmes on poverty reduction and
development.
Meanwhile, People’s Committees at grassroots and provincial
levels are to facilitate the practical participation of civil social and
community organisations in the development of the public budget and
monitoring the financing of social programmes.
Participants have suggested a number of approaches for the
project implementation, including ranking the transparency of public budget
users.
Dong Thap: 24 billion VND mobilised to support farming
conversion
The Mekong Delta
Accordingly, the province will support farmers with up to 2
million VND (95 USD) each hectare to buy seeds for the summer-autumn,
autumn-winter and winter-spring harvests.
The province has requested authorised agencies to instruct
farmers on cooperating with enterprises to boost consumption while
encouraging production in accordance with Vietnam Agriculture Practice
(VietGAP) certificates to ensure safe farm products.
The Lap Vo, Hong Ngu and Cao Lanh districts have transferred
over 4,000 hectares of ineffective rice-growing areas to planting sesame,
increasing local income to 10-20 million VND (476-952 USD) per hectare.
Farmers in Hong Ngu district earned nearly 40 million VND
(1,900 USD) per hectare after switching to other crops.
Local farmers are encouraged to forgo ineffective rice-growing
areas to plant other geographically suitable crops in order to boost
production and meet market demand in terms of both quality and quantity.
French, Vietnamese scientists talk construction
The French-Vietnamese Conference on Innovation in Construction
(CIGOS 2015) took place at the
President of
Ha Minh Cuong, a lecturer at Cachan, said the goal of the
conference was to recommend ideas and development projects to minimise
pollution, preserve energy, ensure sustainability and promote the
environment.
The conference also discussed the training cooperation between
The CIGOS was organised for the first time in 2010, and the
second time in 2013.
VASEP
forecasts shortage of material shrimp
This resulted in farmers wavering breeding shrimp and fish and
shortages of materials for seafood processing.
Vietnam Seafood Exporters and Producers (VASEP) Vice Secretary
General Nguyen Hoai
This year, the world’s supply increases as shrimp producers in
The results of the US Department of Commerce (DOC)’s
anti-dumping duty review in January 2015 signified that anti-dumping taxes
were higher than previous ones, causing more difficulties for tra fish
exporters. Moreover, the US Agricultural Act of 2014 partially affects
Vietnamese tra fish exports to the highly lucrative market.
Foreign exchange rates also hinder Vietnam seafood exports as
more than 90% of import-export contracts use US dollar for payment.
Thailand’s plastic leading producer opens branch in Vietnam
SRITHAI SUPERWARE, Thailand's leading producer of melamine and
plastic tableware, plans to invest US$44.5 million in expanding its business
in India, Indonesia and Vietnam as its foresees strong demand in those
markets, while expecting domestic sales to account for a smaller proportion
of its revenue in the coming years.
Sanan Angubolkul, chairman and president of the listed
company, said Srithai Superware would focus on expansion via new overseas
factories this year in light of strong export growth to key target markets.
In expanding its business overseas, Sanan explained that the
company would concentrate on building up its manufacturing presence largely
via mergers and acquisitions, as such a strategy would enable it to generate
income in the short-term.
"As a result of or planned expansion abroad, our target
is to double sales to Bt20 billion by 2020, from this year's expected Bt10.05
billion. This year's estimated sales will be 7% higher than the value
achieved in 2014, while volume will rise by 10%. Also, sales from overseas investment
will increase significantly compared to the Thai market," he said.
Currently about 22 per cent of the firm's sales are from
direct exports, and 20% from regional investment, mainly from Vietnam and
Indonesia, while the remainder is from the domestic market.
Sanan said the share of the company's income from overseas
sales would increase over the next five years, under its firm strategy of
focusing on expanding investment in other countries.
Income from its Vietnamese business is expected to exceed that
generated in Thailand within the next 10 years, he added.
Under the investment plan, Srithai Superware will spend about
US$14.8 million in establishing a third Vietnamese factory, in the city of
Hanoi.
The new plant is expected to start a test run with an annual
capacity of 6,000 tonnes of plastic products in the fourth quarter of this
year.
Srithai Superware currently has two plants for plastic
products and bottle production in Ho Chi Minh City, with an annual capacity
of about 20,000 tonnes.
Soaring bank provision anticipated for bad debt control
Loan-loss provisions of local banks are expected to mount up
in the upcoming months to reach the goal of driving the banking sector’s bad
debt rate to below 3 per cent by the end of year.
To facilitate the sector’s objective, the central bank has
required local commercial banks to scale up efforts in dealing with bad
debts, engaging in mergers and acquisitions to bolster business efficiency
and selling bad debts to the state-owned Vietnam Asset Management Company
(VAMC) to ensure healthy operations. Their provisions would, thereby,
increase remarkably.
According to Do Minh Toan, general director of Asia Commercial
Bank, this year the bank aims to achieve a credit growth of 13-15 per cent
and sell about VND1 trillion ($46.7 million) bad debts to VAMC.
The bank has also made plans to tackle VND1.6 trillion ($76
million) in bad debts and set aside VND2 trillion ($93 million) to make
provisions, striving to bring bad debt below 3 per cent before the end of
this year.
Standard Chartered Bank (SCB), an influential banking entity
based in Ho Chi Minh City, has sold about VND11.4 trillion ($532 million) of
bad debts to VAMC, in the course of the past three years, bringing its ratio
to just 0.5 per cent by the end of last year.
This year, SCB is set to continue curbing bad debts to ensure
healthy finance.
Along with using drastic measures, the bank’s provision will
also increase.
At Vietnam International Bank (VIB), one of the leading joint
stock commercial banks, though by the end of last year bad debt was kept at
2.51 per cent, well below the regulated level of 3 per cent, its cumulative
provisions have surpassed VND2 trillion ($93 million).
According to the bank executives, this year VIB is set to
tackle VND3.83 trillion ($179 million) in bad debts, ensuring to maintain its
bad debt around 2.5 per cent.
The bank’s bad debt is forecast to swell by around VND300
billion ($14 million) this year, leading to its rising debt provision.
At Eximbank, one of largest banks in total asset value, last
year approximately VND3 trillion ($140 million) was put in provision, leading
to a sharp drop in profits to just VND68 billion ($3.1 million).
This year, the bank plans to sell around VND1 trillion ($46.7
million) bad debts to VAMC and put into provision 20 per cent of the sum to
receive special bonds from VAMC in return.
Bank provisions are forecast to shoot up this year as each
bank must fulfil the goals of selling the bad debt amount assigned by the
central bank (SBV) to the VAMC.
Banks have, therefore, proposed the central bank to scale down
the required provision amount for their bad debts when selling to VAMC from
the current 20 per cent to 10 per cent only.
The bank proposal was advocated by Tran Du Lich, member of the
National Financial and Advisory Monetary Council, who said that lower
provision rates would help alleviate bank pressures in a time of
difficulties.
Government confirms bank guarantee for house buyers
The guarantee fees to be paid on real estate development
projects will have to be borne by the project’s developers who incorporate
this sum into the house price.
At a Government regular meeting held recently in Hanoi,
governmental spokesperson, Minister and Head of Government Office Nguyen Van
Nen said that the level of guarantee fees will depend on the capacity and
prestige of every developer.
The above reflection from the government was released as a
reaction to concerns from developers and buyers on the detailed guidelines
and exact percentage figures regarding bank guarantees to be paid on real
estate development projects.
“The implementation of guarantee payment to the bank from real
estate developers has been regulated in the amended Law on Housing which will
be come into effect this July to ensure the right of the buyer,” Nen
stressed.
Specifically, when the developers sell or lease an unfinished
project guaranteed by bankers, but fail to hand over the units to buyers
according to the agreed schedule, then the banks would be responsible for
repaying this guarantee for the buyers.
Nen stated that the State Bank of Vietnam is currently framing
the guidelines for the details-related issues. These frame guidelines will be
sent to the related bodies very soon.
However, the exact percentage to be paid by the developers has
yet to be revealed as of yet.
According to many developers, this obligatory guarantee will
bump up the overall unit price of properties.
Although the bank guarantee has not been revealed yet,
industry insiders expect that it will be between 1 to 2 per cent of a
project’s total investment capital, or around VND600,000 ($28) per square
metre.
However, as Nen stressed, the guarantee will be tied to the
reputation of the developer and so the guarantee fee could change from one
developer to another, depending on their record.
This information has received varying reactions from buyers.
Hoang Manh Hung, a real estate agency in Lieu Giai Street in Hanoi said that
it will be hard for buyers to take on any additional financial pressures.
“Developers are now doing their best to reduce the price of
every square metre of housing as much as possible in order to attract
customers, they would not be happy to add this sum into the value,” Hung
said.
Meanwhile Nguyen Thi Hoa, a buyer from Thang Long Number 1
project in Hanoi said that she was happy enough with this bank guarantee.
“Even that we [buyers] have to pay more for every square metre
of the house, our right will be ensured by the bank and this is fair enough
for us,” Hoa said.
However Hoa is still concerned over what actual price hikes
will result of the guarantee and whether developers will abuse this.
“We hope that the State Bank’s guidelines will solve all
remaining outstanding issues related to the bank guarantee,” Hoa said.
Source :
VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
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Thứ Năm, 14 tháng 5, 2015
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