According to feedback from the Ho Chi Minh City Real Estate Association (HoREA), some transitional construction - transfer (BT) contract projects are facing obstacles because the time to determine land price payment is prolonged too long after the project has been completed.
HoREA cited the case of the BT project in Thu Thiem New Urban Area implemented by MHL Company. Accordingly, the enterprise completed the handover of the project in 2018 and was audited by the State Audit Office, but until 2025, Ho Chi Minh City issued a land allocation decision. This caused the land price to be determined according to the time of land allocation instead of the time the project was handed over.
Similarly, another infrastructure business also said that determining the time of land valuation for BT investors is a "bottleneck", greatly affecting the business's financial problem if financial obligations are calculated at the time of late land allocation, instead of the time of signing the BT contract.
Talking to Lao Dong Newspaper reporters, Mr. Le Hoang Chau, Chairman of HoREA, said that he has just sent a document to the Government and the Ministry of Finance, proposing to amend some contents of Decree 257/2025/ND-CP, focusing on the mechanism for payment of BT projects with land funds.
According to the Association, after 7 months of implementation, many provisions of Decree 257 have begun to reveal problems, especially for large-scale infrastructure projects with long construction periods.
One of the biggest problems lies in the fact that the value of BT projects is almost "locked down" from the beginning. According to current regulations, the final settlement value of projects must not exceed the approved estimate when signing the contract.
Mr. Chau said that this approach is not practical, because infrastructure projects are often strongly affected by fluctuations in material, labor or fuel prices. Just the increase in sand, gasoline or construction costs in a few years of construction, total investment capital can also increase significantly.
What worries businesses more is that while the value of the project is fixed, the land price paid is determined at the actual land allocation time. Meanwhile, land prices tend to increase over time, especially for large land plots or located in potential locations.
This leads to a situation where investors have to bear both increased construction costs and the risk of reducing the scale of the land fund received or having to pay additional land use fees due to increased land prices after many years of waiting for land allocation.
According to Mr. Le Hoang Chau, Chairman of HoREA, this mechanism creates a "double risk" when businesses are both under pressure to increase input costs and face land price fluctuations in the future.
In addition to the land price story, HoREA also clearly stated that the current payment mechanism makes it difficult for investors to mobilize capital. According to regulations, although businesses are allocated land funds early to implement BT projects, they still cannot exploit or sell counterpart projects if the BT project is not completed and has not been recorded as revenue - expenditure of the state budget.
The reason is the overlap between Decree 257 and the Law on Real Estate Business. Specifically, the Law on Real Estate Business requires investors to fulfill financial obligations for land before exploiting the project, while Decree 257 allows early land allocation but calculates revenue - budget expenditure according to the actual volume of BT works that have been accepted.
As a result, businesses have land but still cannot mobilize capital from counterpart projects, leading to cash flow being stuck, and the policy of early land allocation is almost meaningless.
To overcome this, HoREA proposes to allow investors to deposit money into a freeze-off account to serve the construction of BT projects. This amount will be recorded as revenue and expenditure of the budget corresponding to the value of the land fund for payment, helping businesses both construct and have a legal basis to mobilize capital.
In addition, the Association also proposed to gradually reduce the value of bank guarantees according to the construction progress or according to the amount of money deposited into the frozen account.This mechanism will reduce financial pressure, open "room" for credit, and create conditions for BT businesses to easily mobilize capital and deploy counterpart projects earlier.
