Investors shunning underground car park projects
09-01-2013
There are currently four underground parking projects in downtown HCMC, located at Le Van Tam Park, Trong Dong Outdoor Theater, Hoa Lu Stadium and Tao Dan Stadium.
Investment and Development for Underground Space Corporation (IUS) is the owner of the project at Le Van Tam Park, while Urban and Industrial Zone Development Investment Corporation (IDICO) is in charge of the one at Tao Dan Stadium. The other two will be developed by Indochina Group.
The HCMC Department of Transport last month suggested the municipal government cancel the projects at Hoa Lu Stadium and Tao Dan Stadium if Indochina Group and IDICO failed to submit the development schemes for approval by June 30, 2013.
Bui Xuan Cuong, deputy director of the department, said underground car park projects in the city were all inactive because of the inexperience of project owners and consultants, difficulties in determining land rents and making financial plans, along with high lending rates.
“So far, no underground car park project has got off the ground,” he said in a document sent to the city’s government.
Recently, Nguyen Van Loc, general director of Indochina Group, wrote to the HCMC government saying that partners in the underground car park at Hoa Lu Stadium had pulled out of the project due to financial distress. They include Water Supply and Sewerage Construction and Investment JSC (Waseco) and HCMC Finance and Investment State-owned Company, holding a respective 18% and 12% in the project.
Therefore, Loc proposed the city’s government postpone the project until Indochina Group has found new partners. However, he said his firm would have no complaint if the municipal authorities decided to cancel the project.
Meanwhile, the underground parking project at Le Van Tam Park is constantly delayed. In the latest report sent to the HCMC government, IUS general director Le Tuan pledged the project would get going on June 30 this year.
As for the project by Indochina Group at Trong Dong Outdoor Theater, the transport department has asked relevant agencies to help the project owner promptly carry out the project.
However, so far, the department of natural resources and environment has not set the time for land allocation, so the department of finance cannot determine financial obligations. Therefore, Indochina Group cannot kick off the project as it can only apply for project commencement after land rent is determined and land use right certificate is issued.
Similarly, IDICO has not finalized its financial plan for the car park at Tao Dan Stadium, and thus it cannot ask the Ministry of Construction for opinion on the basic design for the project.
