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Gov't delays slow housing projects

Update: December, 21/2013 - 09:33

HA NOI (VNS)  — Local governments had, as of last month, suspended 524 new urban areas and residential housing projects because they had made little headway in land clearance.

These projects, covering at total of 17,000 hectares, account for 13 per cent of the country's existing new urban areas and housing projects, according to the Ministry of Construction.

The ministry announced these figures after a study of 11 major regions in the country, officials said.

Nguyen Tran Nam, Deputy Minister of Construction, said the main criterion for suspending the projects was progress made in land clearance.

Projects wherein more than 30 per cent but less than 70 per cent of the allocated land has been cleared could be continued or suspended by local authorities, he said.

Those with less than 30 per cent of the land cleared and those whose investors were not deemed financially capable would be suspended, he added.

One of the aims of the suspension was to reduce the supply of commercial housing to a saturated market, Nam said.

"Even if the ministry doesn't examine and suspend these projects, their investors are not financially capable of completing them."

Many investors are at present only capable of finishing site clearance and paying land use fees, after which they have no funds to spend on the project, according to the deputy minister.

However, Pham Sy Liem, former deputy minister of construction and vice chairman of the Viet Nam Construction Association, said such studies should have been conducted earlier.

"The ministry should not have waited until the real estate market had frozen to review projects," he said.

Liem said that the forecasting of land demand for all kinds of project had not been done scientifically and in keeping with the country's socio-economic development strategy.

This resulted in the need for frequent adjustments to land use plans, he said.

Citing Ha Noi's housing development strategy as an example, he noted it estimated demand at 60 million square metres by 2020, but the actual land area that had been allocated to investors was more than 82 million square metres.

The situation has been repeated in HCM City. The estimated demand is around 66 million square meters and the allocated area is nearly 80 million square metres, according to Liem.

Regarding the suspended projects, Liem said that in case the investors were not replaced, the ministry should consider using the land for the actual needs of local residents.

For instance, for projects in suburban areas that had been suspended, local authorities could establish farms to provide fresh food for urban consumers, Liem said. — VNS


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