Special mechanism for Long Thanh airport project gets thumbs-up

HCMC – Prime Minister Nguyen Xuan Phuc has told the Ministry of Transport to design a special compensation, support and resettlement mechanism for the Long Thanh airport project in Dong Nai Province, the Vietnam News Agency reports.

The ministry should coordinate with the Ministry of Natural Resources and Environment, the government of Dong Nai Province, and relevant agencies to map out a plan for compensation, support and resettlement, treat it as a separate component, and report results to the PM.

The special plan should be submitted to the National Assembly (NA) before the NA passes the feasibility study for the big-ticket airport project.

The Transport Ministry will work with authorities of Dong Nai to devise a policy framework for compensation and resettlement assistance.

The project would affect around 4,700 households with nearly 15,000 people in Binh Son, Suoi Trau, Cam Duong, Long An, Long Phuoc and Bac Can communes.

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Around 40 kilometers from HCMC and 30 kilometers from Bien Hoa City, the airport would meet 4F standards of the International Civil Aviation Organization (ICAO).

Phase one of the project is scheduled to get off the ground in 2019, with one runway and one terminal to be put into operation by 2025 to handle 25 million passengers and 1.2 million tons of cargo a year.

One more runway and terminal would be built in the second phase to increase the airport’s annual capacity to 50 million passengers and 1.5 million tons of cargo. The airport would handle 100 million and five million tons a year after phase three is complete.

More than VND336.76 trillion (over US$16 billion) will be needed for the project, including nearly US$5.5 billion for the first phase. The funding will be sourced from the State budget, official development assistance (ODA) loans, investment of enterprises, proceeds from equitization of State-owned enterprises and other sources.

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Chinese contractors sue Vietnam hydropower project owner

HANOI - A consortium of Chinese contractors has filed a case against the Vietnamese owner of the Upper Kon Tum hydroelectric project for termination of the contract, according to a report which the Government has passed to the National Assembly.

The report deals with two hydropower projects – Song Bung 4 and Upper Kon Tum. Vinh Son-Song Hinh Hydropower JSC (VSH) is the owner of the Upper Kon Tum hydropower project on the Dak Nghe River, the upstream tributary of the Sesan River.

The consortium comprising East China Investigation and Design Institute under China Hydropower Engineering Group and China Railway 18th Bureau Group has sent a petition against VSH to the Vietnam International Arbitration Center (VIAC).

This move comes after VSH cancelled the contract with the Chinese contractors and reclaimed the entire contract execution and advance payment guarantees.

The termination of the contract resulted from “serious delays” in the construction of the plant and power lines, as well as from the “unfriendly behavior” of the contractors, says the report.

VIAC set May 23, 2016 as the date for verbal argument, with a ruling by the arbitration council expected to come out by the end of this year.

Due to the complexity of the case, the completion of necessary papers, the gathering of evidence and the addition of legal documents must be sufficiently and carefully done. The verbal argument was rescheduled to April 20, 2017, and the ruling is expected in the middle of next year.

The Government says in the report that after the Chinese contractors filed the case, VSH filed a self-protection statement and a proposal to VIAC seeking arbitration in the consortium’s breach of contract terms.

VSH signed a legal consulting service contract with local and international law firms, namely YKVN Singapore with a branch in Vietnam and EP Legal Vietnam. After a review of the records, the two legal consultants proposed VHS invite Singapore’s Drew & Napier LLC to join the case.

VHS is now working with counsels over evidence and documents to prepare a testimony.

The Government said this case is complex with many potential risks. Since the ruling of the arbitration council is slated for mid-2017, the progress and efficiency of this project will be certainly affected.

The Government report notes that VHS has reassessed the remaining workload for the power transmission lines and hydropower plant, which is actually the job of the Chinese contractors. Currently, new contractors have taken over the job of constructing the transmission lines and plant.

The Government says the total investment cost of this project is VND7.4 trillion.

Source The Saigon Times

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Experts present three scenarios for property market next year

Experts, speaking at a conference in Hanoi on Tuesday, gave three scenarios for the 2017 domestic property market, with the most likely one being that the market will move sideways. The other two scenarios are that the market will continue growing, which are the least probable, or will go down.

The conference on prospects for the real estate market next year was held by Nha Dau Tu magazine, the Vietnam Real Estate Association (VNREA) and Dau Tu newspaper in Hanoi on Tuesday.

Tran Kim Chung, vice president of the Central Institute for Economic Management (CIEM), told the conference that the property market would cool in the coming time as speculation has eased.

Chung said certain housing projects with a strong financial position remain attractive to homebuyers. However, real estate credit will drop since banks are tightening short-term capital for the property sector.

He said big-ticket projects costing VND5 trillion (US$224.2 million) or VND7 trillion or VND10 trillion each will become rare next year compared to 2016.

Chung suggested three scenarios for the 2017 real estate market.

First, it will be better than in 2016, which is desired by many. The scenario will only become a reality if the global economy grows well and does not enter a recession and Vietnam’s economic growth reaches its peak. Chung said this scenario would unlikely happen.

Second, the property market will move sideways with some segments plunging and some others edging higher. Chung said this is the most likely scenario but the market structure will change.

Third, the real estate market will cool if the world economy remains unstable and Vietnam’s economy faces unfavorable developments.

Do Thu Hang of Savills Vietnam said housing supply next year will stay high in both Hanoi and HCMC. Many more social housing projects will come on stream to meet rising demand of middle-income people and workers at industrial parks.

Of some 2.6 million workers at industrial parks, 75% are migrants, 75% are under 35 years old, and they have annual income of US$2,500 on average. They are potential customers of the social housing market, Hang said.

Chung of CIEM said the social housing segment would be the spotlight of the property market next year. However, the segment needs the Government’s supporting policies to grow.

Nguyen Manh Ha, vice chairman of VNREA, said the real estate market will remain stable in 2017 with the low-end and social housing segments performing better.

He said growth in the social housing and mid- and low-end segments will be impacted by State policies. Meanwhile, the shop-house and villa segments will continue attracting clients as many homebuyers prefer an independent house to an apartment.  

Source The Saigon Times

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Thailand may slap anti-dumping tax on Vietnam steel sheets

HCMC – Thailand may impose anti-dumping tariffs of up to 60.26% on color-coated steel sheets imports from Vietnam, according to the Vietnam Competition Authority under the Ministry of Industry and Trade.

The Department of Foreign Trade (DFT) under the Thai Ministry of Commerce on December 12 released preliminary results of an anti-dumping probe into Vietnam’s color-coated steel sheets, including painted hot-dip galvanized cold rolled steel, or aluminum zinc alloy-coated cold rolled steel, with dumping margins expected to range from 4.51% to 60.26%.

DFT will give relevant businesses and agencies from Vietnam a chance to respond to the investigation results and send evidence to the department by January 6 before a hearing is organized on January 16.

The Thai agency said it had got a dumping investigation petition from NS BlueScope Company for an alleged dumping margin of up to 89.58% in September last year.

Statistics of the Vietnam Competition Authority show that the country’s exported steel products are subject to most anti-dumping lawsuits. As of May 2016, there had been 25 trade cases against Vietnam’s steel products, of which 18 were anti-dumping ones initiated by ASEAN nations like Thailand and Malaysia.

Earlier, the Vietnam Steel Association had requested producers of metallic-coated and color-coated steel sheets to reduce their export shipments and control selling prices to the Malaysian and Thai markets for risks of anti-dumping measures.

Steel firms of these two nations have repeatedly complained about huge volumes of Vietnam’s steel products imported into their countries at low prices, adversely affecting their production.

Source The Saigon Times

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Construction ministry warns against resort real estate glut

HANOI – Investors should be cautious in resort real estate projects as the strong growth of resort real estate this year may lead to an oversupply in the future, the Ministry of Construction advised.

Resort real estate has developed strongly since 2015 with many projects mainly in Danang, Khanh Hoa and Phu Quoc opened for sale, said Pham Van Truong, head of the real estate market management office under the ministry’s Department of House and Real Estate Market Management at a review conference on the real estate market in 2016 and market trends in 2017 held by the Vietnam Association of Property Brokers last Friday.

Many resort projects have been licensed in the coastal provinces. Particularly, there were 46 licensed projects covering more than 3,000 hectares in Khanh Hoa Province and 75 licensed projects occupying more than 2,000 hectares in Vung Tau.

If all of these projects are completed, there will be hundreds of thousands of villas, leading to an oversupply in the market, Truong said.

Nguyen Quoc Khanh, board chairman of DTJ Investment and Distribution Joint Stock Co., said at the conference that resort properties have boomed this year. The number of projects opened for sale has increased sharply this year while last year saw only one to two projects put up for sale.

There have been only two projects opened for sale in Danang and Lao Cai in the fourth quarter this year, the lowest quarterly number in 2016, but in the third quarter, there were as many as 11 projects opened up for sale in Khanh Hoa, Danang and Quang Ninh.

This year has witnessed the recovery of the resort real estate market and a boom in the sector in three major destinations namely Danang, Nha Trang, and Phu Quoc. Some 35 projects with 12,000 apartments and 2,000 villas have been offered for sale, Khanh said.

Source The Saigon Times

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For Vietnam legal matters or services, the clients could reach ANT Lawyers, the exclusive Vietnam law firm members via email at ant@antlawyers.vn or call the telephone at +848 35202779.

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HCMC proposes setting up property market info center

HCMC – HCMC has proposed establishing a center to store and manage data about land, homes and housing projects, heard a meeting last week.

This is one of a number of measures suggested in the city’s property market development plan in 2016-2020 with a vision towards 2030, which was the topic of discussion at the meeting.

The city expects the information center could help it build official real estate market indexes which market participants could use as references.

The plan will develop infrastructure to connect urban areas, diversify property products, boost development of condo buildings, and encourage investors to get involved in projects to build homes for low-income people.  

The city petitions the Government to establish a general department for housing development and allow it to form a housing development board under the city government.  

The plans also mentions a number of measures to ensure transparency on the market, improve the cityscape and oversee housing development.  

Tran Du Lich, former deputy head of the HCMC delegation of NA deputies, said the plan is well prepared but contains no deep analysis of market conditions. It should point out what is not transparent, and what regulations overlap, he said.

Lich said laws such as the Land Law, the Construction Law, the Housing Law and the Law on Real Estate Business have conflicting provisions which have left negative effect on the real estate market.

Le Chi Hieu, vice chairman of the HCMC Real Estate Association (HoREA), shared Lich’s view, saying many existing regulations are inconsistent, making life difficult for property companies.

High land prices and land-use fees are weighing on businesses and homebuyers, he noted, adding the State should set up a special financing mechanism, such as a housing development fund, to lure more businesses to join low-cost housing projects.

An official of the State Bank of Vietnam’s HCMC branch said the plan does not make clear the financing structure of enterprises involved in property projects. At present, a majority of investors rely heavily on bank loans to fund their projects but this source of capital would drop in the future in line with the central bank’s Circular 06 which sets out a roadmap for tightening lending to real estate projects.

To ensure sustainable development for the property market, bank loans should fall while increasing capital from other sources such as homebuyers, investment funds and corporate bonds, the central bank official said.

Source SaigonTimes

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Vietnam Assembly to Hold Off Building Nuclear Power Plant

It is important for Vietnam to properly re-balance the power supply. Without nuclear power, Vietnam shall need to add additional coal-fired power plants.  Further, Vietnam will need to accelerate more renewable energy, including wind energy, solar energy projects and attract more investment in Vietnam in these energy sectors.

According to the National Assembly Office, the Parliament met the Minister of Industry and Trade on Nov 10th, 2016 whom  will present the draft draft resolution on holding off building the first nuclear power plant in Ninh Thuan, Vietnam.

Back to history, on Nov 25th, 2009, with 382 endorsed delegates (at the rate of 77.48%), the Vietnam National Assembly has decided to approve the investment policy of Ninh Thuan nuclear power plants: Ninh Thuan Phuoc Dinh 1, located in Thuan Nam and Ninh Thuan 2 located in Vinh Hai commune, Ninh Hai district with a capacity of about 2,000 MW per plant.

Key technologies of the two plants is “light water reactor technology improvements, the most modern generation furnace, with proven, guaranteed safety and economic efficiency at the time of the project”.

Recently, there has been concerns among energy experts and Vietnamese people on a number of issues in regard to legal frameworks, technology, safety and expert resources.  It appears that such concern has been listened leading to the possible decision to postpone the deadline to start the the nuclear power project.  According to the new plan, the new clear power plant could be scheduled in the year 2030.

According to energy experts in Vietnam, being cautious is necessary. In order to implement the nuclear power projects, Vietnam will need to take time to prepare.

Firstly, Vietnam will need to evaluate the project, organize international tender, and implement detailed design.  Such will need the help of foreign energy consulting firms to help appraise.

Secondly, Vietnam is sending 300-500 experts to Russia and Japan to study experience about managing the nuclear power plants.  This training period is important to ensure the proper people are well equipped with knowledge and are capable to manage the plants and this process will take time.

Thirdly, Vietnam is negotiating with Russian factories and Japanese factory to import technology in nuclear power plants and the negotiations are still on-going.

Fourthly, number of scientists and people still fear safety problems of nuclear source especially the last two incidents at Chernobyl nuclear power plant in Russia and the Fukushima plant in Japan.  Safe operation is one matter but the handling of residues is also an on-going concerns that Vietnam has to face when investing in nuclear power project.

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Hire Lawyers to Collect Debt

The collection of bad debt and late payment after sales are difficult and sensitive jobs. Therefore, the debt collectors should be well informed about the legal nature of the debt profile and they must have skills on debt recovery.

Depending on the nature of each case and each specific dossier, the debt collectors can be able to make suitable plans to deal accordingly.

So there will be a lot of methods and different solutions in the work of debt recovery. However, the recovery of debt will apply the following two basic methods:

– Mediation and agreement methods are ways that lawyers and legal professionals will come directly to negotiate and persuade debtor to make their debt payment schedule.

– Method to resolve through court proceeding or in coordination with the functional agencies: This method will be applied in the case that debtors are unwilling to cooperate, trying to evade responsibility, or the payment plan is delayed.

Time limit for settling the debt collection:

Time limit for settling the debt collection is influenced by many different factors but the two most important factors are the legality of the documents and the payment capability of debtors.

There are debtors, after being explained the consequences and losses of non-payment, late payment by lawyers and legal experts, they were aware of and make plans to pay debts.

But there are debtors that the creditors require the support and intervention of the functional agencies, and then the debtors accept to pay. Therefore, the duration of the case will be prolonged.

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