Four more Vinashin officials arrested

Police arrested four senior officials at Vinashin and its subsidiaries Friday amidst an investigation into the state-owned shipbuilder which was on the verge of bankruptcy.

Board members Tran Quang Vu and Tran Van Liem were arrested on charges of "deliberately acting against the state’s regulations on economic management, causing serious consequences.” Vu, also Vinashin chief executive officer, and Liem were suspended last weekend.

Two other officials – Nguyen Tuan Duong, chairman of Cuu Long Vinashin Steel Company and CEO of Cai Lan Steel Company, and Nguyen Van Tuyen, director of Hoang Anh Shipbuilding JSC – were also taken into custody Friday on similar charges, just one day after their sacking.

Police said in a statement published on the government website that the decision to arrest the officials was based on evidence gathered so far as well as statements given by Vinashin former chairman Pham Thanh Binh, who was arrested August 4.

Investigation into the shipbuilder's management is continuing, according to the statement.

The investigation began in July as Vinashin was about to go under with debts amounting to US$4.5 billion.

The government has pledged to restructure the shipbuilder, reverting to a focus on its core areas of operation.

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Retail sales up 26% in first eight months

HA NOI — Retail sales reached an estimated VND1 trillion (US$51.3 million) during the first eight months of the year, an increase of more than 26 per cent compared to the same period last year, according to the General Statistics Office (GSO).

A GSO report showed that tourism services saw the highest increase during the first eight months, climbing 35.4 per cent to VND90.4 billion ($4.6 million), while sales in goods and services rose 27.3 per cent to VND797.8 billion ($40.9 million).

Increasing foreign tourists arrivals during the period contributed strongly to these growth figures, said officials at the GSO's trade department.

The Viet Nam Retail Analysis for the 2008-12 period, carried out by global market research and information analysis company RNCOS, said the country was fast emerging as a preferred tourism destination, with an estimated compound annual growth rate of about 8 per cent during the 2008-12 period.

And tourist arrivals would help keep the country's retail sector busy, the report said.

In the first eight months, foreign retailers achieved a turnover of VND29.7 billion by selling goods and services in domestic markets, representing a year-on-year increase of 49.2 per cent.

The State-run sector, meanwhile, posted a revenue of VND103.9 billion ($5.3 million) from retail sales in the same period, while the private sector gained a turnover of VND345.9 billion ($17.7 million).

Analysts from the US-based Research and Market Company said the rapid growth in Viet Nam's retail market meant it remained an attractive destination for retail investment due to its strong GDP growth, changes in the country's regulatory structure favouring foreign investors, and increasing consumer demand for modern retail concepts.

"We expect that despite the 2008 financial turmoil, the retail industry turnover in Viet Nam will continue growing. Government support and favourable consumer confidence will result in positive outlook for retailers in Viet Nam," said the firm.

"Traditional retail channels will continue to dominate the market, but a Government decision to allow 100 per cent entry to foreign retailers under WTO commitments will mean that continued high growth is unrealistic," they said, forecasting that the country's retail industry would surpass $85 billion in revenues by 2012.

"We also expect a short wave of consolidation during the next four years as foreign retailers will try to consolidate their position and deepen their market penetration."

The GSO officials added that the upcoming holidays and growing consumption power would continue to fuel stronger retail sales towards the end of the year. — VNS

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Ha Noi property market goes west

The Nam Trung Yen apartment building in the west of Ha Noi's Trung Hoa District. The western areas have great opportunities and resources for real estate development projects. — VNA/VNS Photo Tuan Anh

HA NOI — Ha Noi's western areas have great opportunities and resources for real estate development projects, according to real estate experts.

Dang Hung Vo, former deputy minister of Natural Resources and Environment, told participants at a recent workshop focused on real estate and investment opportunities in the west of Ha Noi that investors and individuals had shown an interest in developing the western part of the city.

The decision to develop Ha Noi towards the west was decided by the Government and city authorities several years ago. This tendency towards westward development was confirmed again in the city's recent master construction plan.

Vo said the master plan of expanded Ha Noi was divided into two zones: nuclear urban area and neighbouring regions.

An overall plan for Ha Noi was established to expand these areas. The inner city area will stretch from the left bank of the Red River to the second ring road, reaching a population of about 1.2 million by 2030. High-rise buildings are restricted in this area.

The extensions of the nuclear urban centre, including a chain of urban areas along the fourth ring road and the southern region of the Red River, are expected to reach a population of 1.25 million people by 2030. Investors are being encouraged to build high-rise buildings in this area to shift the population from the inner city.

The series of urban areas to the north of the Red River will consist of Me Linh District, with about 0.45 million people, Dong Anh District, with 0.55 million and Long Bien-Gia Lam districts, with about 0.7 million by 2030.

Five urban satellite towns will include Hoa Lac, Son Tay, Xuan Mai, Phu Xuyen, Phu Minh and Soc Son. Each satellite town will include one or more specific characteristics to support and share the need for urban housing, high-quality training, industry and services, and job creation.

Duong Duc Tuan, deputy director of the Ha Noi Planning and Architecture Department, affirmed that with such development, the western area of Ha Noi would have many opportunities and resources to carry out real estate investment projects. He added that land funds were available for infrastructure projects in the form of build-transfer (BT) and build-operate-transfer (BOT) in this area.

According to many experts, finance problems have posed a challenge. Capital resources from official development assistance (ODA) and foreign direct investment (FDI) are currently difficult to mobilise and the State budget cannot afford the estimated US$70 billion investment.

As a result, capacity to implement the master plan can only rely on resources from the land fund. Appropriate mechanisms and policies should be developed to encourage real estate investors to get involved in the implementation of the master plan in combination with efficient use of land resources.

Land bubble

In the first quarter this year, a land bubble phenomenon occurred in the area around Ba Vi which saw land prices increase unexpectedly. Increases varied between 35 per cent to 45 per cent depending on the specific area, according to the Kim Bai and Ba Vi administrative centres.

During this land fever, land in the west of Ha Noi fetched high prices. For example, land in Van Khe, Ha Dong District ranged from VND70 million ($3,589) to 80 million ($4,102) per sq.m, and in Nam An Khanh the price was around VND30 million ($1,538) per sq.m.

However, fewer transactions are now taking place because many land traders have fled the area. Land prices have fallen by 70 per cent compared with peak land fever prices.

Vo said land fever in Ba Vi did not follow market rules. Traders did not carefully study information about the land but simply rushed to buy land under the herd mentality. Unfortunate consequences are inevitable, he said.

Nguyen Tran Nam, deputy minister of Construction, said commodity prices would follow the market rule which centred around the law of supply and demand and the law of value. Although real estate was a special kind of good, it still complied with economic laws and other factors.

Authorised agencies could regulate prices by increasing supply, he said.

Currently, major capital for the real estate market comes from banks, but financial institutions are beginning to narrow the flow of capital with strict regulations in order to prevent a real estate bubble.

The Ministry of Construction has proposed potential channels for mobilisation of capital for the real estate market in the future, such as real estate trust funds and savings funds on housing. — VNS

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HCM City's central real estate becomes upmarket

HCM CITY — Retail space in the central areas of HCM City has become the target of many famous fashion brands, restaurants, cafes, banks and schools.

Many of these organis-ations are prepared to pay high premiums to rent space on main streets such as Dong Khoi and Le Loi but many of them are struggling to find suitable space due to a lack of availability.

Tran Huyen Chieu Tran, Director of Gau Bong Company, said her company had failed to find any space in the city centre after searching for three months.

Last year, her company paid US$3,000 per month to hire a property on Nguyen Hue Street but it was demolished for development so they were forced to look for another premises, she added.

Tran said that doing business in a good location would bring higher profits but it was difficult to find a good location because they were all full.

Another shopowner on Dong Khoi Street paid $4,000 per month to rent a 50sq.m space last year. This year, that figure increased by $500 per month for a similar space on the same street.

These two examples are clear indicators that demand for retail space in the centre of HCM City is on increase and likely to continue to rise, despite escalating prices.

In central streets such as Dong Khoi, Le Loi and other areas surrounding the HCM City Theatre, property is currently $150-200 per square metre.

And the situation is the same on neighbouring streets such as Mac Thi Buoi, Nguyen Thiep and Ngo Duc Ke. Sort after corner properties on these streets can even be 20-50 per cent more expensive but despite the price, they are always occupied.

According to reports by market research companies, the occupation rate of retail space in the second quarter of this year increased by 2 per cent over the first quarter, reaching 98 per cent.

However, in the near future, HCM City's retail property market likely to cool as supply begins to catch up with demand.

"It is estimated that by 2013, HCM City will have 1.3 million square metres of retail space," CB Richard Ellis said. — VNS

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Work starts on Metro 2 highway

HCM CITY — HCM City has started work on Metro No2 highway backed with US$1.25 billion borrowed from the Asian Development Bank, European Investment Bank and Kreditanstalt Fur Wiederaufbau (Reconstruction Credit Institute). The 20km-long road will stretch from the new urban area of Thu Thiem to An Suong bus station. It is expected to be open in six years.

15-floor housing block under way

HCM CITY — Pacific Property and Infrastructure Development JSC (PPI) and Hung Thuan Investment Joint Stock Co started work on an office and residential building in HCM City last week. It will cost VND213 billion (US$10.92 million). The project will cover 20,279sq.m and include 15 floors and a basement.

New urban area for Hung Yen

HUNG YEN — Work has started on the 92.5ha Long Hung urban area in the northern province of Hung Yen.

The project will cost VND2.48 trillion (US$127.33 million). This year, about VND1.29 trillion ($66.61 million) will be spent for ground clearance and compensation.

Hoan Kiem trade centre to open

HA NOI — The VND250 billion (US$12.82 million) Hang Da Trade Centre project will open in Hoan Kiem District later this year. The project, covering 9,312sq.m and including five floors and two basements, will provide a retail area of nearly 7,000sq.m leasing at $6,000-10,000 per sq.m. — VNS

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Ports, wharves to be made safer, cleaner

Goods being unloaded at Lotus Port on the Sai Gon River in HCM City. —VNA/VNS Photo Thanh Phan

HCM CITY — Managers of domestic ports and wharves in HCM City have committed to ensure safety, order and environmental hygiene, according to the Department of Transport's Domestic Waterway Division.

Ngo Dinh Quang, head of the division, said that drivers of boats and owners of ports and wharves had complied with waterway laws, especially storm and flood-prevention regulations, following a successful education campaign.

In addition, his office has offered training in waterway transport laws for owners of ports and wharves.

Despite the new effort to encourage compliance with regulations, the number of ports and wharves operating without a license has increased, up to 52 from 47 in 2009.

The fines for non-compliance are too low, according to Quang.

As part of its campaign, the waterway division said it had been working with People's Committees at the district level to organise forums and conferences with the participation of more than 40 companies that own ports and wharves.

The authority pledged that it would ensure procedures for issuing licences for domestic ports and wharves would adhere strictly to the law.

By the end of 2009, there were 268 ports and wharves operating, of which 47 worked without a licence.

Of the 221 ports and wharves operating with licenses, 44 of them have reached "model standards" set by the city's Transport Department, an increase of 65 per cent compared to 2008. — VNS

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Private firms may back resettlement

HCM CITY — HCM City authorities have invited the private sector to invest in the city's half-completed resettlement plan for canal-side residents.

Nguyen Van Danh, deputy director of the Department of Construction, said the city wanted the sector to invest in the resettlement projects because the local government's budget was too slim.

Nearly half of the 15,000 canal-side residents of HCM City have already been relocated to flats as part of the city's resettlement plan.

The plan belongs to a city programme to clear the view along canals by demolishing houses along and on the canals, including communities in Tan Hoa – Lo Gom, Tham Luong – Ben Cat, Vam Thuat, Nuoc Len, Doi, and Te canals.

The plan still needs capital for demolition of 7,642 shacks and the resettlement of the families in districts 6,8, and Binh Thanh.

In return for investors demolishing houses, they would receive some vacant land along the canal.

The socialisation of the resettlement plan was piloted in District 8, but failed because 55 invited businesses refused to participate.

Last year, the city assigned a State-run real estate company – RESCO to be the investor of the projects.

The company has completed 629 houses and paid compensation to 784 out of 905 families removed from District 8's U Cay Canal; handed over 600 resettlement flats in District 7's Tan My Area, 176 flats in District 12's An Suong Area and would complete 350 other flats for residents being relocated from District 8's Ba Dinh Wharf.

Many of the resettlers were pleased to move away from their stilted houses by and on the canals. "I had a hard time living by the canal in District 8 as my husband and I had to stay alert at night to bail out the house when the tide got too high," said Huynh Thi Hong, a new resident in Tan My Apartments.

Nguyen Ho Hai, deputy chairman of District 8 People's Committee, said the plan had helped beautify the district and improve people's general welfare.

The construction department suggested that the People's Committee attract investors by offering them a 10-year loan of VND100 billion (US$5.1 million)at very low interest.

It also suggested that the occupancy rate on the land be raised. — VNS

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