RESEARCH ON LAND USE RIGHTS AUCTION IN YÊN MÔ DISTRICT, NINH BÌNH PROVINCE
RESEARCH ON LAND USE RIGHTS AUCTION IN YÊN MÔ DISTRICT, NINH BÌNH PROVINCE
Ðỗ Văn Nhạ
Nguyễn Khắc Việt Ba
Vũ Thị Thu
Nguyễn Ðức Lộc
Faculty of Natural Resources and Environment, Vietnam Academy of Agriculture
Nguyễn Thị Dung
People’s Committee of Yên Mỗ District
Abstract:
The auction of Land Use Rights (LUR) plays an important role in state management of land, contributing to effective land use and generating capital for the socio-economic development of localities. The study aims to assess the implementation of the auction in Yên Mô District, identify difficulties and limitations, and propose some solutions for improvement in the near future. Commonly used methods include investigation, data processing, comparison, and evaluation.
The research results show that during the 2018-2020 period, a total of 1,073 plots of land were auctioned with an area of 11.12 hectares, generating over 406 billion VND for the locality. Surveys of 90 residents and 30 civil servants directly involved in the auction at 3 pilot projects indicate that the LUR auction was conducted in accordance with legal regulations on procedures, sequences, and regulations, and was carried out transparently. However, the assessment also pointed out some limitations, such as the starting price being lower than the market price, resulting in a high difference between the starting price and the market price.
Keywords: Land Use Rights Auction; Yên Mô District; Land Use Rights (LUR).
I. INTRODUCTION
In the process of renovation, the economy has developed according to the market economy mechanism, gradually forming strong economic components. Consequently, it is inevitable that all input factors for production and output products become commodities, including land. The purchase and transfer of land use rights occur in various forms and gradually integrate with the market.
The auction of Land Use Rights (LUR) is the process where the competent People’s Committee organizes a public auction of land plots to generate capital for local project development. The auction winner is the one who offers the highest bid for the registered land plot (higher than the starting price) and is approved by the Chairman of the People’s Committee (Đặng Thị Bích Liễu, 2012).
The 2013 Law on Land clearly stipulates that the principles of LUR auction are public, objective, continuous, equal, honest, protecting the rights and interests of participants, and in accordance with the legal procedures on land and asset auction (National Assembly of the Socialist Republic of Vietnam, 2013). Thus, the auction of LUR is a popular form and plays an important role in the current socio-economic development (Nguyễn Thu Thuỳ et al., 2020).
The auction of LUR aims to exploit and use land resources effectively and economically, create healthy competition among investors, and maximize revenue for the state budget (Xuân Thi Thu Thảo et al., 2014; Nguyễn Minh Tâm, 2016; Võ Thị Phương Lan, 2024). However, research by Nguyễn Thị Hồng Nhung (2023) points out several issues, such as determining the starting price, which plays a crucial role in ensuring transparency in the LUR auction process, minimizing negativity, and promoting economic development and social-political stability. Additionally, the issue of “price raising, deposit forfeiture” can affect the interests of the state and some auction participants (Thân Trọng Lý & Hà Thị Ái My, 2022).
Yên Mô District, Ninh Bình Province has a total natural area of 14,609.77 hectares and a population of 118,693 people (People’s Committee of Yên Mô District, 2021). It has a favorable geographical location and relatively complete infrastructure network. Currently, in the district’s economic structure, the industrial, small-scale industrial, and construction sectors have the highest proportion, accounting for 46.5%; the agriculture, forestry, and fisheries sectors account for 27.3%; the service sector accounts for 26.2% (People’s Committee of Yên Mô District, 2021).
The land use rights (LUR) auction in Yên Mô District has been carried out in accordance with legal documents. From 2018 to the end of 2020, to meet the housing needs of the people and serve economic development, the LUR auction in the district has always been a priority. The auction results have significantly contributed to generating capital for the local development. However, the determination of the starting price has not been in line with the market price, and issues related to mechanisms and policies may affect the LUR auction in the locality.
Based on these premises, the research aims to evaluate the results of the LUR auction, identify limitations and causes. On this basis, propose some solutions to help management agencies and specialists to better implement the LUR auction in the locality.
II. RESEARCH METHODS
- Secondary Data Collection
Investigating and collecting data and documents related to the results of the Land Use Rights (LUR) auction in Yên Mô District, Ninh Bình Province, during the 2018-2020 period. This includes data on natural conditions, socio-economic aspects, and auction results from several projects in the research area.
- Research Site Selection Method
To assess the detailed situation of the LUR auction in the district, the study selected three LUR auction projects to evaluate their success and existing issues.
– Project 1: Đồng Nuốn area, Yên Từ Commune, with 146 plots of land, an area of 16,626.1 m², attracting 301 applications from individuals participating in the auction.
– Project 2: Đồng Luận area, Khánh Thịnh Commune, with 25 plots of land, an area of 3,094.9 m², attracting 201 applications from individuals participating in the auction.
– Project 3: Núi Sậu to Lam Sơn Road area, Khánh Thượng Commune, with 66 plots of land, an area of 9,477.1 m², attracting 220 applications from individuals participating in the auction.
- Primary Data Collection
Conducting surveys and interviews with residents participating in the auction and officials involved in the LUR auction process. The total number of surveyed and interviewed samples includes 90 residents and 30 officials at the three selected projects, with 30 residents randomly chosen from each project. The survey focuses on various issues related to the LUR auction process, such as land prices, auction information, and auction regulations.
- Statistical, Analytical, and Comprehensive Processing Methods
Based on the collected data and documents, statistical analysis and data processing were conducted regarding the results of the Land Use Rights (LUR) auction and the capital generated. Excel software was used during the process of statistical analysis and data synthesis.
- Comparison and Evaluation Methods
Evaluating the achieved results and existing issues in the LUR auction process in Yên Mô District, at three pilot projects.
– Calculating the Margin of Difference (MOD) between the winning bid price and the starting price to evaluate the project’s efficiency:
MOD = | Winning Bid Price |
Starting Price |
– Calculating the percentage of participants versus winning bidders:
Percentage (%) = | Number of Participants | X 100 (%) |
Number of Winning Bidders |
– Comparing the collected data to identify the advantages and difficulties in the LUR auction process in the research area. Some criteria used for evaluation:
+ Transparency and publicity related to auction projects.
+ Starting price compared to winning bid price and market price.
+ Process of LUR auction sessions.
+ Difficulties faced by auction participants.
III. RESEARCH RESULTS AND DISCUSSION
- Results of Land Use Rights Auction for the 2018-2020 Period
The results of the Land Use Rights (LUR) auction in Yên Mô District over three years show that a total of 1,073 plots were successfully auctioned across 22 areas, with a total auction area of 11.12 hectares, and 3,134 participants.
The LUR auction results for the 2018-2020 period are presented in Table 1.
Table 1. LUR Auction Results for the 2018-2020 Period
No. | 1 | 2 | 3 | Total |
Year | 2018 | 2019 | 2020 |
|
Number of Communes and Towns with Auctions | 12 | 05 | 05 | 22 |
Number of Auctioned Plots | 535 | 281 | 257 | 1073 |
Number of Participants | 922 | 1033 | 1179 | 3134 |
Area (m²) | 46,393.7 | 32,321.6 | 33,265.2 | 111,980.5 |
Estimated Revenue Based on Starting Price (thousand VND) | 75,916,544 | 91,787,820 | 67,466,810 | 235,171,174 |
Revenue Obtained from Winning Bids (thousand VND) | 123,714,088 | 162,174,085.4 | 120,949,292.6 | 406,837,466 |
Average Revenue per m² (thousand VND/m²) | 2,667 | 5,017 | 3,635 | 3,633 |
The results show that over the three years, 1,073 plots were successfully auctioned in 17 communes and towns in Yên Mô District, generating capital of 406.84 billion VND. Compared to the starting price, the auction brought in 171.76 billion VND more, which is 73% higher than the starting price.
The results indicate that the starting price was 2.1 million VND/m², while the winning bid price was 3.6 million VND/m², with a margin of 1.71 times. The participation rate was 2.92 applications per plot. This demonstrates that the auction process significantly contributed to generating capital for the local socio-economic development.
Thus, it can be seen that the auction process during this period was relatively effective compared to the set starting prices, with a margin of 1.71 times and competitive bidding with nearly 3 applications per plot.
- Auction Results of Some Projects in Yên Mô District
The study conducted a detailed evaluation of three auction projects during the 2018-2020 period to identify successes and limitations in generating capital for the locality. The results of the three pilot projects in three communes, namely: Project 1 in Yên Từ Commune, Project 2 in Khánh Thịnh Commune, and Project 3 in Khánh Thượng Commune, are presented in Table 2.
Table 2. Auction Results of the Three Pilot Projects
No. | Indicator | Unit | Project 1 | Project 2 | Project 3 |
1 | Total auction area | m2 | 16626.1 | 3094.9 | 9477.1 |
2 | Total number of plots | lô | 146 | 25 | 66 |
3 | Smallest plot area | m²/plot | 72.3 | 103.5 | 125 |
4 | Largest plot area | m²/plot | 145.5 | 137.7 | 304.7 |
5 | Average plot area | m²/plot | 113.9 | 123.8 | 143.6 |
6 | Total number of applications | apps | 301 | 201 | 220 |
7 | Number of auctioned plots | plots | 146 | 25 | 66 |
8 | Auction participation rate | % | 206.16 | 804.00 | 333.33 |
9 | Starting price | 1,000 VND/m² | 1924 | 2300 | 2860 |
10 | Winning bid price | 1,000 VND/m² | 3740 | 4430 | 5700 |
11 | Margin of Difference | % | 194.39 | 192.61 | 199.30 |
12 | Estimated revenue from auction | billion VND | 31.99 | 7.12 | 27.09 |
13 | Revenue obtained from winning bids | billion VND | 62.17 | 13.708 | 54.02 |
14 | Additional revenue from auction | billion VND | 30.18 | 6.59 | 26.93 |
Detailed results from the three projects show that the auction participation rate ranged from 2 to 8 times the number of auctioned plots, with Project 2 having eight times the number of applications compared to auctioned plots. This indicates higher competition in the auction, leading to potentially higher prices and greater financial effectiveness.
Regarding the revenue obtained from the auctions, the results showed an increase of nearly twice the starting price, with a price difference margin of nearly 2 times. Thus, the LUR auction process has brought certain effectiveness, generating significant resources for the locality.
The research also indicates that most auction participants are not local residents. Therefore, the issue of meeting the local residents’ housing needs cannot be fully resolved through the LUR auction process.
- Evaluation of the Land Auction Process in Yên Mô District for the 2018-2020 Period
The study conducted a survey of 90 auction participants from three pilot projects, with 30 participants per project. Five evaluation criteria groups were investigated from the perspective of the auction participants, as shown in the table below:
Table 3. Survey Evaluation of Auction Participants in Yên Mô District, Ninh Bình Province
No. | Evaluation Criteria | Project 1 | Project 2 | Project 3 | Number of Respondents | Percentage (%) |
1 | Information Transparency | 30 | 30 | 30 | 90 |
|
| Very transparent | 30 | 30 | 30 | 90 | 100.00 |
| Transparent | 0 | 0 | 0 | 0 | 0.00 |
| Not transparent | 0 | 0 | 0 | 0 | 0.00 |
2 | Starting Price Compared to Market Price | 30 | 30 | 30 | 90 |
|
| High | 1 | 2 | 2 | 5 | 5.56 |
| Average | 19 | 23 | 21 | 63 | 70.00 |
| Low | 10 | 5 | 7 | 22 | 24.44 |
3 | Deposit Amount | 30 | 30 | 30 | 90 |
|
| High | 4 | 3 | 2 | 9 | 10.00 |
| Average | 26 | 27 | 28 | 81 | 90.00 |
| Low | 0 | 0 | 0 | 0 | 0.00 |
4 | Price Difference Between Winning Bid and Starting Price | 30 | 30 | 30 | 90 |
|
| High | 21 | 24 | 27 | 72 | 80.00 |
| Average | 8 | 5 | 3 | 16 | 17.78 |
| Low | 1 | 1 | 0 | 2 | 2 |
5 | LUR Auction Process | 30 | 30 | 30 | 90 |
|
| Appropriate | 29 | 30 | 29 | 88 | 97.78 |
| Less Appropriate | 1 | 0 | 1 | 2 | 2.22 |
| Inappropriate | 0 | 0 | 0 | 0 | 0.00 |
Source: Survey Results
The research results show that the Land Use Rights (LUR) auction has been well-implemented according to legal regulations. Specifically, the process was transparent and publicly announced through mass media and at the auction site, with procedures in line with legal regulations and convenient for the public.
However, land prices were also a concern for the participants. The starting price was perceived as low, which led to high competition in the auction to maximize profit. The price difference between the winning bid and the starting price was considered quite significant. This indicates that auction participants understood market prices and placed bids closer to market value, leading to higher efficiency in the local auction process.
These evaluations can serve as references for management agencies to adjust certain aspects, such as the starting price and auction steps, to better align with market conditions and increase local revenue from land for local development investments.
To provide a more comprehensive evaluation, the study conducted a survey of 30 officials directly involved in the Land Use Rights (LUR) auction process. The survey results are shown in the following table:
Table 4. Evaluation by Civil Servants and Public Employees on the Implementation of Land Use Rights Auction in Yên Mô District
No. | Evaluation Criteria | Number of Officials Surveyed | Percentage (%) |
1 | Auction Process | 30 |
|
| Appropriate | 30 | 100.00 |
| Less Appropriate |
|
|
| Inappropriate | 0 | 0.00 |
2 | Auction Implementation Plan | 30 |
|
| Appropriate | 30 | 100.00 |
| Less Appropriate | 0 | 0.00 |
| Inappropriate | 0 | 0.00 |
3 | Starting Price | 30 |
|
| High | 0 | 0.00 |
| Average | 26 | 86.67 |
| Low | 4 | 13.33 |
4 | Auction Regulations | 30 |
|
| Appropriate | 25 | 83.33 |
| Less Appropriate | 5 | 16.67 |
| Inappropriate | 0 | 0.00 |
5 | Information Transparency | 30 |
|
| Very transparent | 29 | 96.67 |
| Transparent | 1 | 3.33 |
| Not transparent | 0 | 0.00 |
Source: Survey Results
The survey results indicate that officials directly involved in the local auction process evaluated it positively based on several criteria. Specifically, the auction process was conducted according to legal regulations, with detailed auction plans approved according to the law. However, the evaluation pointed out that the starting price was generally at a medium level, leading to certain limitations in increasing revenue from the LUR auction process. The local LUR auction regulations were found to be generally appropriate and transparent. However, the diversity of information and participants in the auction was limited and should be expanded in the future.
The evaluation of the LUR auction process in Yên Mô District shows that it has brought significant benefits to the locality. The auction process was carried out in accordance with legal regulations, with coordinated implementation and public consensus. The LUR auction process generated substantial revenue for the locality, supporting infrastructure investment and social welfare projects for residents in Yên Mô District. However, certain issues need further research to develop more reasonable solutions, such as high price differences, low starting prices compared to market prices, and limited participation from local residents in the auction process.
- Proposals for Enhancing the Land Use Rights Auction Process in Yên Mô District, Ninh Bình Province
Based on the evaluation of the Land Use Rights (LUR) auction process in the district and the study of three LUR auction projects, the following solutions are proposed to improve the effectiveness of the LUR auction process in Yên Mô District:
4.1. Setting the Starting Price for Land Use Rights Auction Close to Market Value
LUR auction projects still face limitations in determining the starting price, directly affecting the LUR auction process. This has led to collusion and manipulation to “lower the price” for illicit gains. Therefore, establishing solutions to set the starting price for LUR auctions closer to market value is essential for ensuring the accuracy and fairness of future LUR auction projects.
Some proposed issues include:
– Supplementing and completing regulations on the mechanism for setting the starting price in LUR auctions to increasingly align with market prices.
– Strengthening the supervision of compliance with laws, procedures, and standards in valuation by organizations and valuation enterprises, ensuring the starting price for public assets attached to land use rights falls under the jurisdiction.
– Establishing a legal framework for the starting price valuation activity, issuing amended or new legal documents on determining the starting price, ensuring that auction starting prices align with market prices.
4.2. Financial Mechanism
To ensure the auction process is highly effective and benefits both the locality and participants, certain financial mechanisms need to be addressed as follows:
– Assessing the financial capacity of auction participants to avoid the situation where participants forfeit their deposits after winning the auction with high bids, affecting the real estate market and resulting in a financial loss for the state.
– Implementing strong penalties to limit the situation of deposit forfeiture or price raising, and preventing collusion that hinders genuine bidders from winning the auction.
4.3. Strict Management of Auction Documents
Given that the number of auction participants is significantly higher than the number of auctioned plots, solutions for managing documents include:
– Suspending the organization of LUR auction sessions and canceling auction contracts with the auction organization if collusion to disclose participant information is detected.
– Keeping the information of auction participants confidential to minimize the use of information to distort the auction process.
4.4. Strengthening Inspection and Supervision
State management agencies should regularly inspect the auction process and regulations to ensure the auction is conducted in accordance with legal provisions, creating favorable conditions for the public to participate and avoiding discrepancies and collusion during the LUR auction process.
IV. CONCLUSION
The Land Use Rights (LUR) auction process in Yên Mô District has been fundamentally implemented according to legal regulations. The LUR auction results for the 2018-2020 period met the housing needs of the people and served economic development. A total of 1,073 plots with an area of 11.12 hectares were auctioned, generating nearly 407 billion VND in revenue. This result has made a significant contribution to generating capital for the socio-economic development of the locality.
The study conducted surveys and interviews with 90 residents and 30 officials directly involved in the LUR auction process at three pilot research areas. The results showed that the auction process and regulations were implemented correctly, with transparency and openness. However, some issues need further research, such as the starting price being lower than the market price, and the large difference between the starting price and the winning bid price. In addition to these issues, the study proposed several solutions, including setting the starting price; financial mechanisms; auction document management; and strengthening inspection and supervision.
References
- Võ Thị Phương Lan (2024). Solutions to Enhance the Effectiveness of Land Use Rights Auctions According to Market Land Prices in Vietnam Today. Environment Magazine, Issue 2, 2024.
- Đặng Thị Bích Liễu (2012). Laws on Land Use Rights Auctions in Vietnam. National Political Publishing House, 2012.
- Thân Trọng Lý and Hà Thị Ái My (2022). Auctioning Public Land Use Rights – Legal Gaps to be Addressed. Saigon Economics Magazine, 2022.
- Nguyễn Thị Hồng Nhung (2023). Determining the Starting Price in Organizing Land Use Rights Auctions. Natural Resources and Environment Magazine, Issue 14, 2023.
- Nguyễn Minh Tâm (2016). The Role of Land Use Rights Auctions in Vietnam’s Market Economy. Democracy and Law Magazine, 2016.
- Xuân Thị Thu Thảo, Hồ Văn Hoá, Trần Xuân Miễn (2014). The Situation of Land Use Rights Auctions in Đông Sơn Commune, Đô Lương District, Nghệ An Province. Forestry Science and Technology Magazine, Issue 2, 2014.
- Nguyễn Thu Thuỳ, Nguyễn Thuỳ Linh, Nguyễn Đình Thi (2020). Land Use Rights Auctions in Quảng Xương District, Thanh Hoá Province. Science and Technology Magazine, Thái Nguyên University, Issue 7, 2020.
- National Assembly of the Socialist Republic of Vietnam (2013). The 2013 Law on Land.
- People’s Committee of Yên Mô District (2021). Socio-Economic Development Report 2020 of Yên Mô District.
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