23/04/2024
Bidding in general and bidding for projects involving land use specifically are activities of a market economy with the principle of adopting a market economic model under state management, where land becomes valuable. Bidding for projects involving land use will help curb corruption in land allocation and leasing. Through bidding for projects involving land use with strict constraints on rights and obligations, many entities will have the opportunity to access and register to participate, allowing them to choose the land-use projects to bid on, and the investors with the best technical and financial capabilities to carry out the projects. Combined with existing land resources, projects will be implemented quickly and smoothly, bringing benefits to the state, investors, and society. However, organizing the selection of land-use projects for bidding at the local level still faces various issues such as lack of specific criteria for project selection, unclear coordination between land management agencies and related organizations, and challenges in land procedures such as land fund management, land clearance compensation, land recovery, compensation prices for land users, and land use forms for investors. Therefore, the Land Law 2024 has innovated legal provisions regarding bidding for land-use projects to enhance the efficiency of land management and utilization, ensuring a harmonious balance of interests among the state, investors, and land users in the context of Vietnam's international economic integration.
Bidding to select investors to implement projects involving land use complies with the Land Law and bidding work regulations in general.
1. Common issues in land use bidding
Currently, the issue of bidding for projects involving land use is receiving a lot of attention from investors. This activity not only promotes the competitiveness of investors both domestically and internationally but also indirectly drives the economic development of each country. This will bring transparency and efficiency in land management and utilization. However, to have a better understanding of bidding for land-use projects, it is necessary to clarify some of the following issues:
The concepts relating to bidding for land use bidding
According to legal regulations: "Bidding is the process of selecting contractors to sign and implement contracts for providing consulting services, non-consulting services, goods procurement, construction; selecting investors to sign and implement investment project contracts in the form of public-private partnerships, land-use investment projects based on ensuring competition, fairness, transparency, and economic efficiency" [1].
A land-use investment project is a comprehensive set of solutions in economics - finance, construction - architecture, engineering - technology, organization - management to use existing resources rationally, including land use, to achieve certain economic - social results and objectives in the future.
Bidding for land-use investment projects is one of the methods to manage the establishment and implementation of investment projects, through which investors are selected to meet the project requirements based on competition among investors. Therefore, bidding for land-use investment projects can be understood as the process of selecting investors to sign and implement land-use investment project contracts based on ensuring competition, fairness, transparency, and economic efficiency.
Objectives of bidding for land-use projects
Bidding for land-use projects aims to: enhance competition in bidding; standardize the management of project investment expenditure; transparency in bidding; ensure fairness in bidding; ensure the effectiveness of bidding activities; prevent corruption in bidding.
Principles of bidding for land-use investment projects
Bidding for land-use investment projects is carried out basing on four fundamental principles: efficiency principle in finance and time effectiveness; competition principle: creating conditions for investors to compete with each other to the widest extent possible; fairness principle: ensuring equal treatment of participating bidders; transparency principle: this is the most important but difficult and challenging principle to implement and verify.
Role of bidding for land-use investment projects
Bidding for land-use projects plays a role in ensuring four contents: efficiency - competition - fairness - transparency. Efficiency can be in terms of financial or time aspects or any other criteria depending on the project's objectives. To ensure project efficiency, it is necessary to create conditions for open competition in the broadest possible scope to create fairness and ensure benefits for all parties. For projects with large total investments, economic or social value, the bidding process is an essential step that cannot be overlooked, and bidding must comply with state regulations or financial organizations providing capital loans. Bidding brings significant benefits to investors and the national economy as a whole.
2. The current status of legal regulations on land use bidding
Legal provisions on bidding for land-use projects before the Land Law 2024
The Land Law 1987, the Land Law 1993 did not have provisions regarding the bidding work for land-use projects, until Decree No. 04/2000/NĐ-CP dated February 11, 2000 on the implementation of the Law amending and supplementing some articles of the Land Law introduced provisions on bidding for land-use projects to raise funds for infrastructure construction. Article 22 of Decree No. 04/2000/NĐ-CP stipulates the establishment and approval of land use project plans to raise infrastructure construction funds, which are established by provincial People's Committees and approved by the Prime Minister, including a list of projects using land funds for infrastructure construction; land use plans for infrastructure construction. Article 23 of Decree No. 04/2000/NĐ-CP regulates the procedure for implementing land use projects to raise infrastructure construction funds, including organizing bidding to select investors to implement projects, if multiple units participate. In cases where only one unit applies to implement a project, direct appointment is allowed. Although the Land Law regulates bidding for land-use projects, in practice, for projects involving land use during this period, mainly direct appointment rather than widespread bidding is prevalent.
Article 58 of the Land Law of 2003 stipulates that the State allocates land with land use fees, leases land through auctioning land use rights or bidding for land-use projects in the following cases: Investing in residential construction for sale or lease; investing in infrastructure construction for transfer or lease; using land funds to raise funds for infrastructure construction; using land for commercial production and business premises; leasing agricultural land within agricultural land funds for public purposes for agricultural production, forestry, aquaculture, salt making; other cases as prescribed by the Government [2].
The Land Law of 2003 regulates bidding for projects involving land use and is detailed in Decree 181/2004/NĐ-CP, Article 62 which regulates bidding for projects involving land use. Article 139 of Decree 181/2004/NĐ-CP regulates the procedures for issuing land use rights certificates to the winning bidder of land-use projects.
The Bidding Law of 2005 and specific regulations on bidding have been established, leading to significant changes in state capital utilization activities to enhance competitiveness, fairness, transparency, and economic efficiency. The enactment of the Bidding Law is a crucial prerequisite for unifying bidding regulations. Improving and unifying the system of legal documents on bidding contribute to creating conditions for implementing agencies to confidently enforce policies, reduce guidance on handling situations arising from differences and inconsistencies between legal documents.
Legal documents provide guidance on selecting investors for land-use projects including: Important investment projects identified in sectoral planning linked to land use rights, land funds with geographical advantages and high commercial value attracting interest from two or more investors; Investment projects using land areas with geographical advantages and high commercial value included in detailed construction plans at a scale of 1/2000 at the local level; Investment projects requiring investor selection for commercial residential construction, real estate business linked to land use rights as regulated by housing laws, real estate business laws, land laws; Investment projects using land areas managed by state agencies, localities, state-owned enterprises if not auctioned off land use rights can select investors as regulated.
Furthermore, legal provisions set certain conditions for selecting investors for projects involving land use including: Having approved detailed construction plans at a scale of 1/2000; Projects included in the announced list as prescribed; Having an overall plan for compensation, support and resettlement for the land area to select investors for project investment; Having an approved investor selection plan; Having an invitation to bid document or approved request document.
During this period, some localities such as Hanoi, Ho Chi Minh City, Hai Phong City,... have started to organize bidding for land-use projects according to the aforementioned regulations but encountered difficulties in determining the land fund for bidding, too many procedures when conducting bidding causing difficulties for investors. Implementing bidding according to both the Land Law and Bidding Law regulations has left management agencies and enforcement agencies confused in handling tasks...
Challenges in regulations and implementation of land use bidding
Although the legal provisions on bidding for land-use projects have achieved certain results at this stage, there are still existing challenges and obstacles, specifically:
Firstly, the implementation process shows that there are still some other related content regarding the work of bidding for land-use projects being adjusted by various documents, leading to inconsistent application in different localities, causing difficulties in bidding that affect the project implementation progress and businesses' access to land.
Secondly, the professional expertise in bidding is uneven and limited in some localities. Strong decentralization enables investors to be more proactive in the bidding process. However, strong decentralization also means that some units may not meet the requirements for professional capacity. This is a reality for units at the commune level, especially in remote areas.
Thirdly, the quality of some bidding preparation work is low. Delaying in budget preparation and approval leads to some bidding packages being organized but unable to select a contractor due to higher bidding prices than the approved package prices, requiring re-bidding. There are still many shortcomings in bid invitation document preparation, low quality bid invitation documents leading to bid cancellation.
Fourthly, regarding bidding organization and bid evaluation. The bidding organization process is quite clearly regulated in the Bidding Law and guiding decrees, and implementing units have largely complied with these regulations. However, there are still cases where some provisions are not fully adhered to: late submission of bid documents by contractors but still being opened and evaluated, contractors violating prerequisite conditions but not being eliminated, contractors not meeting technical requirements but still being evaluated financially, contractors exceeding bid prices not being evaluated technically, adjusting bid invitation documents after bid opening, still organizing bidding when the total value has exceeded the total investment amount...
Fifthly, post-bidding management issues are not regularly implemented. According to reports from localities, in some cases, contract implementation management (signed between the investor and the winning contractor) has not been adequately emphasized.
Sixthly, while the 2013 Land Law does not regulate bidding for land-use projects, the 2013 Bidding Law does address bidding for land-use projects to overcome shortcomings and limitations in implementing the 2005 Bidding Law and provides an important legal basis to ensure competitive, fair, transparent, and economically efficient principles for bidding activities.
The procedural sequences related to bidding for land-use projects are regulated in the 2013 Bidding Law and guiding documents. After selecting the investor through bidding, procedures related to land such as compensation, land clearance, land leasing, issuance of land use rights certificates are carried out according to the provisions of the Land Law and related guidelines [3].
3. Regulation changes on the land use bidding
Land is a significant resource that plays a decisive and irreplaceable role in the socio-economic development and national security of the country. Therefore, land must be managed and utilized efficiently, preventing waste and loss. Implementing Resolution 18-NQ/TW dated June 16, 2022 of the 5th Central Executive Committee of the 13th term has set forth tasks and solutions: "Implementing land allocation and leasing primarily through auctioning land use rights, bidding for projects involving land use...." The Land Law of 2024 has been amended to address limitations and shortcomings. This is a solution to eliminate administrative interference in land transactions, establish legal provisions towards complying with market rules in land allocation and leasing to serve state management, and meet the requirements of the strong ongoing socio-economic development. Specific additional and innovative contents regarding the selection bidding of investors to implement land-use projects are as follows:
Firstly, supplementing citizens' rights regarding land, in Article 4 of Article 23 of the Land Law 2024 clearly stipulates that citizens have the right to participate in bidding to select investors to implement land-use projects according to legal regulations. This is a completely new addition compared to previous land laws, ensuring the full rights of citizens in general and citizens' rights regarding land in particular.
Secondly, clear provisions on approving the list of project works involving land use for selecting investors through bidding. Article 5 of Article 72 of the Land Law 2024 stipulates the authority to decide, approve land use planning, plans, including stipulations before approving annual land use plans at district level, provincial People's Committees must submit to the provincial People's Council for approval of the list of works, projects that need land recovery, including projects to recover land for auctioning, bidding.
Thirdly, supplementing the basis for land allocation, leasing, allowing land use change in Article 2 of Article 116 of the Land Law of 2024 stipulates the basis for land allocation, leasing through bidding to select investors to implement land-use projects is the document approving the investor selection result for projects organizing bidding to select investors to implement land-use projects according to legal regulations on bidding.
Fourthly, supplementing Article 126 of the Land Law 2024 stipulates clearly the land allocation, leasing through bidding to select investors to implement investment projects involving land use, including 10 items, including: specific provisions on cases where the State allocates land with land use fees, leasing land through bidding to select investors to implement investment projects involving land use; Land Fund for bidding to select investors to implement land-use projects; conditions for bidding to select investors to implement land-use projects; for projects involving land use, they must also meet conditions as prescribed by sectoral laws and regulations; conditions for organizations participating in bidding to select investors to implement projects involving land use; conditions for foreign investors when participating in bidding to select investors to implement projects involving land use; responsibilities for announcing the list of land areas for bidding for investment projects involving land use, organizing detailed planning, organizing and implementing compensation plans, support, resettlement, land recovery, land allocation, leasing for winning investors or economic organizations established by winning investors according to regulations; time limit for recognizing bidding results, signing contracts and regulations on canceling bid results; sequence, procedures for bidding to select investors to implement projects involving land use in accordance with legal regulations on bidding. This content marks and demonstrates the important role of the land management sector in selecting investors to implement projects involving land use in effectively managing and using land resources, especially during the current strong socio-economic development process.
Fifthly, supplementing Article 160 of the Land Law 2024 stipulates specific land prices applied in cases where the State allocates land with land use fees for winning investors selected through bidding to implement investment projects involving land use. This helps businesses access land transparently, fairly, and leverage land resources effectively [4].
Bidding to select investors to implement projects involving land use complies with the Land Law and bidding work regulations in general. Therefore, to complete procedures related to land concerning bidding for investment projects involving land use in the Land Law 2024 has been supplemented and is completing a system of guiding documents for implementing the Land Law 2024 in general and regulations on bidding to select investors to implement projects involving land use concurrently with implementing the Bidding Law. This innovation is a significant step towards creating a unified legal normative document system between the Land Law, Investment Law and Bidding Law, avoiding overlapping and conflicting provisions regarding investment projects.
MSc. Dam Thi Mai Oanh
Center for Research, Development, and Technology Application of Land
Institute of Strategy and Policy on Natural Resources and Environment
(Source: Vietnam Environment Administration Magazine, English Edition I-2024)
REFERENCES:
1. National Assembly (2003), Bidding Law 2003, National Political Publishing House, Hanoi.
2. National Assembly (2003), Land Law 2003, National Political Publishing House, Hanoi.
3. Đàm Thị Mai Oanh (2016), "Research on the current situation, proposing some solutions to enhance the effectiveness of bidding for projects using land according to the innovations specified in the Land Law 2013".
4. National Assembly (2024), Land Law 2024, National Political Publishing House, Hanoi.
