VietNamNet Bridge - Four investors from Vietnam and Japan, namely BRG, Phu Cuong Real Estate Investment, Motor NA Vietnam, Hanoi Service & Real Estate and Sumitomo Corporation, have asked for Hanoi authorities’ permission to develop a smart city capitalized at $4 billion.

Investors are seeking permission to develop a smart city in Hanoi

Covering an area of 271.82 hectares in Hai Boi and Vinh Ngoc communes in Dong Anh district, the project is estimated to cost VND94.348 trillion, or $4.138 billion, of which the investors would contribute VND14.26 trillion ($625.4 million) and the remaining would be from Japanese ODA (official development assistance) and the government of Vietnam.

Nguyen Van Dinh, deputy chair of the Vietnam Real Estate Brokers’ Association, said that real estate developers alone would not be able to carry out smart city projects, because they were focused on generating real estate value.

“We will need the participation of enterprises from other business fields and support of state agencies through policies for the city to develop,” Dinh commented.

“When developing a smart city, it is a must not to assign all works to real estate firms,” he said.

Nguyen Chi Thanh from Thanh Binh JSC also said the optimal goal of all real estate firms is making profit. Local authorities need to find out what the project would bring to the city and how it would benefit people.

Thanh predicted that the Vietnamese investors will be in charge of administrative procedures and site clearance, while the Japanese investor will build the smart city on ‘clean’ land.

Pham Sy Liem from the Vietnam Construction Federation also noted that most of the investors of the project are real estate firms. “This shows that the Japanese investor has found clients,” he said.

Regarding the policy for the smart city, according to Liem, it would be better to ask investors to build infrastructure items in the area. Local authorities would not take on this job.

“The municipal authorities should not build infrastructure items, so that investors can make profits from these,” he said.

“If investors want to have full rights to develop a smart city, it must do from A to Z. The local authorities may not collect land leasing fee, and in return, the investors have to develop infrastructure items,” he explained. 

“So while leaving the whole work to investors, the local authorities will have a new city and can collect tax from the business activities in the city,” he said.

If the investors cannot make profits after building infrastructure, Liem suggested that municipal authorities may consider supporting investors to build the Nhat Tan-Noi Bai highway, which connects the city and the airport.

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