Shanghai is trying to resolve the fate of more than 3,600 hectares of land held by developers but still sitting idle since Beijing outlawed ways of transferring property. In March, the Ministry of Land and Natural Resources said local governments must sell land for commercial use, tourism, entertainment venues and residential housing by tender or auction. The rules took effect last Tuesday. Beijing enacted the rules after widespread land misuse and the introduction of policies to slow the economy, including a crackdown on property speculation. Local governments previously negotiated directly with developers, which had brought corruption. Central officials ordered a move to a tender system in 2002, but it was only carried out by local governments to varying degrees. Shanghai had 3,670 hectares of unused land that city districts transferred to developers through negotiated deals, state media said yesterday, quoting a city official. Earlier reports put the amount at 6,000 hectares. The city enforced a bidding system for land sales earlier than the rest of the country after the Chau Ching-ngai scandal last year. The property developer, now serving three years in jail, was accused of obtaining land from a city district without paying or providing adequately for the people evicted. Shanghai government spokeswoman Jiao Yang said this week that the city would encourage developers to start construction or the land would be seized. Lack of funds, problems in negotiating compensation with residents and planning snags were the main reasons some companies failed to develop land. But some developers held onto land for speculation or to wait for better market conditions, industry officials say. Shanghai is legally entitled to repossess about 1,000 hectares of land from companies that failed to use the land after more than two years, local media has said. An executive at a large state-owned property development company said he doubted any land would be seized. 'The government won't be able to take back all of this land. Developers will find loopholes,' he said.