Korean conglomerate Lotte Group got the go-ahead from the HCM City People’s Committee on Wednesday to develop the Thu Thiem Eco Smart City in District 2.

The 74,420sq.m project in the core of the Thu Thiem New Urban Area will cost VND20.1 trillion (US$884 million) in addition to the compensation to be paid for land.

It will feature a trading-financial-banking centre, hotels, an office tower, and serviced and residential buildings on 50,120sq.m. The remaining area will be used for roads and other infrastructure.

Construction is expected to take six years and the project is licensed for 50 years.

Affiliate companies like Lotte Asset Development Co Ltd, Lotte Shopping Co Ltd., Hotel Lotte Co. Ltd, and Lotte Engineering & Construction Co Ltd will participate in the project.

Saigon Times newspaper reported that the chaebol had been pursuing the project for years before getting the green light in 2014 and will start construction as early as next quarter.

Lotte has deposited a sum of around VND2 trillion ($88 million) for fees for six lots of land.

The fact that the developer will build some of the infrastructure will ease the burden on the city, which is paying off a VND29 trillion ($1.28 billion) loan it obtained to develop the Thu Thiem peninsula. The interest alone comes to VND2.9 billion a day, according to the city’s administration.

The 657ha peninsula is located to the east of the Sai Gon River, and is adjacent to Districts 1, 7, 9, and Binh Thanh.

It is expected to become a finance, commerce, services, cultural and entertainment hub. — VNS