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Lack of funds chokes social housing projects

Update: March, 14/2014 - 08:56
A shortage of funds has stopped work on many social housing projects for low-income earners in southern Dong Nai Province.— File Photo

HA NOI (VNS)— A shortage of funds has stopped work on many social housing projects for low-income earners in southern Dong Nai Province.

Nguyen Khac Son, manager of Son An Urban Development and Investment JSC, said 408 apartments in Tam Hoa Commune, Bien Hoa City, were left unfinished at the third-storey level. According to the design, the housing project should have 23 storeys.

Son said he had no idea when the project would be resumed.

Another project to build 500 apartments in the city's Buu Hoa Commune by Minh Luan Co, Ltd is in a similar situation. The VND229 billion (US$10.7 million) project was brought to a halt after site clearance was completed.

Figures from the provincial Department of Construction show that seven social housing projects providing a total of about 6,000 apartments had been approved in the province.

However, according to project investors, at least four projects were forced to halt due to a serious shortage of capital.

Most banks in the province refuse to lend money for these projects due to high risks.

Tran Quoc Tuan, director of Dong Nai's State Bank, said enterprises offered their apartments as security for borrowing money, but many lacked capital or were experiencing bad debts.

This has caused prices for apartments to spiral, putting them out of range for many low-income earners. Many apartments in the social-housing range remain unsold.

Tuan cited apartments built by Son An Urban Development and Investment JSC as an example. Low-income workers and civil servants could not afford to buy housing worth VND500-600 million ($23,500-28,200).

Investors have asked the department to help them get favourable loans from the Government and the State Bank's VND30 trillion ($1.4 billion) credit package so that they can complete their projects. — VNS

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