The urban project got the nod from the Prime Minister in 2008, but now the two sides are still negotiating land rents and land use fees.
The city has handed over 260 hectares in Nhon Duc and Phuoc Kieng communes to the investor. Meanwhile, GS E&C has advanced US$93 million of the total US$131 million pledged to carry out compensation for site clearance, heard the meeting on Monday.
Regarding different understandings of the payments given in the contract signed between the two sides in 2004, Director of the HCMC Department of Finance Dao Thi Huong Lan explained: "Nha Be Metrocity is not just an investment project. It is related to the field of real estate trading.”
"Therefore, under the prevalent law of Vietnam, in addition to land rents, the foreign investor must pay land use fees for commercial apartments,” she said.
At present, GS E&C cannot kick off the project on schedule due to the slow removal of the high-voltage power line and slow site clearance.
GS E&C initially expected to spend about US$189 million on infrastructure development from 2009 to 2010, and then begin construction of other facilities in 2011.
The investor can lease the land use right over the areas with complete infrastructure to secondary investors, or use the land use right as capital contribution to set up subsidiaries with lifespan of up to 50 years.
Besides the Nha Be Metrocity, the two sides also discussed the 27-story building set for development in Thu Thiem in District 2.
Huh expressed his concern: "Based on the planning of HCMC in 2005, we decided to build a 27-story building there. However, the Department of Planning and Architecture recently informed the new planning only allows a height limit of 12 floors.
"If this is the case, GS E&C will have to abandon this project due to its lack of commercial viability,” he stressed.