Costs of resettling people displaced by Yangtze River Delta projects a sensitive and uncertain issue for property firms China Overseas Land & Investments, one of the mainland's biggest developers, said the costs of resettling people displaced by its new residential projects in Yangtze River Delta cities are reaching prohibitive levels. 'Resettlement compensation fees are rising like a rocket in Shanghai,' said Ge Yafei, general manager of subsidiary COB Development (Shanghai). In central Shanghai resettlement costs are now more than 10,000 yuan per square metre, China Real Estate Business, published by the Construction Ministry, reported at the end of September. One of COB's two projects in Shanghai is a 230,000 square metre development in Jianguo Road, Luwan district. Plans call for 700,000 square metres of gross floor area after completion, including 400,000 square metres for commercial use. 'We are doing the resettlement in several phases,' Mr Ge said. 'We have just finished one block of the seven that need to done. I estimate it will cost at least 20 billion yuan for the whole project. 'So far we have paid out less than 10 per cent of what is needed for resettlement,' he said, without detailing the resettlement cost per square metre. 'It's very sensitive,' he said. Mei Wenyuan, a member of COB's management department, said it is 'very difficult to resettle residents and develop a project, there are so many uncertainties. It's hard to calculate the accurate costs for resettlement'. Several big projects by other developers in Shanghai have stalled due to the difficulties in resettlement. China Resources Land delayed its Dong Jia Du project in Huangpu district after the government issued a new resettlement policy. The company acquired the land for 760 million yuan in 2002. COB has also had problems adding to its Shanghai land bank, which now stands at 750,000 square metres. It represents an investment of 5.2 billion yuan. 'We haven't increased our land bank in Shanghai for two or three years now,' Mr Ge said. 'We are doing research to decide whether we will attend the public tender for the third batch of land released by the government this year.' Mr Ge said COB had failed in its bid to obtain land in Huangpu district in August; the lot it wanted at the time was part of the first batch of land released for public tender by the House and Land Resources Administration Bureau in Shanghai. The company is still considering whether to bid for land in the second batch put out to tender last month. COB said it earned more than 400 million yuan on each of its two newest residential projects in Shanghai. China Overseas Land added several lots to its land banks in Beijing, Nanjing and Suzhou in the first half of this year. The company has invested eight billion yuan in five projects in Suzhou since it entered that city in 2004. The company also has invested seven billion yuan in Nanjing but resettlement compensation fees are becoming a problem there too. Nanjing China Overseas Property, the group's subsidiary in the city, has undertaken three projects in the city. The first on the west side of the Qinhuai River did not generate high resettlement costs because the area was relatively uninhabited. However, the other two are in Gu Lou district, the oldest part of Nanjing. The company paid 300 million yuan and 30 million yuan, respectively, for the two pieces of land on which the projects stand. 'We haven't estimated the total costs for the two projects yet,' said general manager Chen Cheng. 'The land prices for the two projects are relatively cheap.' The total investment in the two projects will be five to six billion yuan, the company said.