D'Edge Thao Dien project halted due to claim of unreasonable compensation

By Quynh Nhu - May 25, 2018 | 05:54 PM GMT+7

TheLEADEROne household still does not accept compensation from CapitaLand for damage caused by the construction of D'Edge Thao Dien.

D'Edge Thao Dien project halted due to claim of unreasonable compensation
Project D'Edge Thao Dien, Nguyen Van Huong street, Thao Dien ward, district 2, Ho Chi Minh City

Project D'Edge Thao Dien (Nguyen Van Huong street, Thao Dien ward, district 2, Ho Chi Minh City) has the total area of 8,000 square metres, including two 25-storey towers with 273 apartments. The project is expected to be completed by June 30th, 2020.

CapitaLand Thanh Nien Ltd. (CTN) is the owner of D'Edge Thao Dien. CTN was established in early 2017 with the chartered capital of VND162 billion (roughly $7.2 million), 90% of which is owned by Sophia VN Ltd, a subsidiary of CapitaLand. The remaining 10% was from Saigon Trading and Travel Service JSC.

In mid-April 2018, the People's Committee of Thao Dien ward (district 2, Ho Chi Minh City) received complaints about being affected by D’Edge from six households adjacent to the project.

The letter clearly stated: "Our walls have been cracked and so ramshackle that we cannot close the windows or the doors. These damages seriously affect our daily life and our business. At present, some brick walls and stone columns are starting to break. They may collapse or cause a fire at any time, which endangers our life."

In mid-May 2018, Inspectorate of the Construction Department of Ho Chi Minh City decided to halt the project. A few days ago, the Construction Department of Ho Chi Minh City issued the decision on sanctioning administrative violations against CTN and Tuan Le Construction, the main contractor of the project. 

Each company was fined VND25 million (about $1,100) for "violating the regulations on project quality management, causing cracks in the adjacent works.

Besides, the Inspectorate also requested CTN to restore the original status for six households and offer them compensation.

CapitaLand claimed that the company was strictly complying with these requirements.

Chen Lian Pang, General Director of CapitaLand Vietnam, said: "In construction, the fact that adjacent houses are affected by foundation construction is sometimes inevitable. As a company with international construction experience, we have precautions to minimise the incidents."

According to Chen Lian Pang, one of the basic precautions that CapitaLand often takes is asking construction units to buy insurance for the risks that might emerge during the construction process. The insurance costs are large enough to ensure that problems like this incident will be solved. The company bought insurance for the D'Edge Thao Dien project before the construction starts.

So far, five out of the six affected households have accepted the repair agreements of the construction unit. Only one household has not agreed yet as they are asking for unreasonably higher compensation compared to their house status. They also did not cooperate in the process of assessing their house, so the evaluation was slowed down, and no conclusion has been made.

"When third parties are still trying to investigate the matter, the owner cannot accept a compensation claim that is too high, as it does not follow the working principle. We are a listed Singapore company; we have long-term and sustainable strategies in Vietnam. The company always chooses ethical business practices over short-term results,” Chen Lian Pang clarified CapitaLand's position in solving the unwanted incident.

CTN leader also said that the request to halt the project to ensure the safety of surrounding households was unreasonable.

From the personal perspective of Chen Lian Pang, a construction engineer with more than 30 years of experience, the project should complete the adjoining walls and the basements as soon as possible to ensure the safety for adjacent households. The rainy season is coming, and the rain will soften the soil, which will affect the texture and safety of the neighbourhood even more.

"We always prioritise the safety of the residents; hence, we look forward to completing the work to make it safer. The company is making great efforts to resolve the incident with goodwill," said CapitaLand Vietnam.