Reasons for the delay in implementation of social housing projects in Nghe An

Investors are not really determined

From the reality of learning about the implementation of thesocial housing project for workersIn the area, we see that Nghe An as well as other localities, based on the Government's incentive and preferential policies, since 2010, the Provincial People's Committee has issued support policies for housing projects for low-income people in urban areas and housing for workers in industrial parks (IPs).

In 2012, the Provincial People's Committee approved the housing project for workers at Nam Cam Industrial Park and assigned Nam Cam Industrial Park Investment Company, now Nghe An Industrial Park Infrastructure Development and Construction Investment One Member Co., Ltd., to survey and prepare the project. In 2015, the province approved the social housing project for workers of Trung Do Joint Stock Company on the company's land in Trung Do Ward (Vinh City).

Social housing area for workers and low-income earners of Trung Do Joint Stock Company on Cu Chinh Lan Street, Trung Do Ward. Photo: Nguyen Hai

Then, in 2013, Dai Hue Joint Stock Company also started construction of a social housing project in Dong Dau area, Hung Dung ward (Vinh city) to take advantage of the Government's preferential loan package of 30,000 billion VND; in 2019, approved the construction planning of 2 housing areas in Nghi Xa and Nghi Tien communes (Nghi Loc) to solve accommodation for 2,600 workers.

However, up to now, only the social housing project by Trung Do Joint Stock Company has become a reality with 50 apartments put into use, the rest of the projects have not been implemented. Even Trung Do Joint Stock Company, the unit that successfully implemented the project, frankly said that after this project, the unit has not thought about the next social housing project because the investment procedures are quite complicated. Although the land is available and the capital is mobilized by the company, the project is called social housing so it has to go through many quite complicated procedures, from planning review, when finished, it has to approve the price, approve the buyer... which takes a lot of time.

Perspective of a social housing project for workers in Hung Loc commune, Vinh city, but now not completed. Photo courtesy of Nghe An Newspaper

Most recently, in mid-2021, to anticipate foreign investment projects in Nam Cam Industrial Park, VSIP Industrial Park, WHA Industrial Park... and to attract and retain workers in the locality, the province continued to encourage businesses to invest in social housing projects for workers. The common point of the projects is preferential policies on land rent, and loans with an interest rate of 3%/year from the Social Policy Bank for investment and construction. Thanks to that, the province attracts andAwarding investment policy certificates to 3 social housing projectsfor workers, including 2 projects of MK Central Solar Power Joint Stock Company and BMC International Trading Joint Stock Company in Nghi Long and Nghi Thuan communes (Nghi Loc); 1 project of Kim Thi Real Estate Joint Stock Company in Nghi Xa commune (Nghi Loc)...

According to the plan, after the above projects are approved in principle, the investor will complete the procedures and start construction in the third quarter of 2022; the project of Kim Thi Real Estate Joint Stock Company will be handed over in the second quarter of 2024 and the remaining 2 projects will be handed over in the first quarter of 2027.

Representatives of investors said that the province and district support and create favorable conditions for the projects, but up to now, after nearly 2 years, only the social housing project for workers of Kim Thi Real Estate Joint Stock Company in Nghi Xa commune has shown better results, which is leveling the ground; the remaining projects are in the first stage of adjusting the design and planning.

With the improvement in attracting investment, especially FDI investment, social housing projects for workers are urgently needed to ensure social security and retain workers. A corner of Nam Cam Industrial Park. Photo: Document

At the Conferenceconnecting labor supply and demandAt the end of 2022, the representative of the Southeast Economic Zone Management Board urged social housing project investors to speed up the project progress but also hoped that enterprises in the industrial park would have a clear plan and preferential housing policies for workers. Because one of the plus points in attracting investment is to have housing projects for workers to attract and retain workers, ensuring social security. With thoseinvestment attraction, especially large-scale FDI projects, from now until 2025, the province needs 100,000 more workers, along with other policies, social housing projects must be implemented in parallel...

Investor and partner capacity

After learning more, we learned that the reason why social housing projects for workers in the area are being implemented rather slowly is due to limited capacity. Nghe An Industrial Park Development Investment Joint Stock Company, due to the change in mechanism, is no longer able to mobilize capital as before. Besides, compared to some provinces, in Nghe An, the way to implement social housing projects is still quite mechanical and cumbersome.

The cramped, makeshift life of workers in boarding houses near industrial parks. Photo courtesy of CSCC

According to an investor, in Da Nang, the mechanism is open, so a business owner from Nghe An province quickly implemented a social housing project for workers. In just over a year, this business completed a project with 2,000 apartments and handed it over to the city. Meanwhile, social housing projects in Nghe An province only complete procedures for land acquisition, compensation, and implementation after the investment policy is approved, and it usually takes 2 years to complete the procedures. Social housing project investors are also wondering how to sell the products and how long it will take to recover capital.

In Nghe An, investors in social housing projects for workers have not yet connected with enterprises with workers to know their specific needs. Therefore, although enjoying incentives, in fact, investors in Nghe An have just implemented projects but have to wait and see. In addition, to take advantage of investment infrastructure, some investors, after approving the investment policy for social housing projects, use the excuse of requesting project adjustment, designing and integrating commercial housing projects for sale to recover capital, causing a delay...

A representative of a business specializing in distributing real estate products in Vinh city said.

Luxshare-ICT's project in VSIP Nghe An Industrial Park not only builds factories but also builds housing areas for experts and management staff. If housing for workers is expanded, it will be a good model to replicate. Photo: Nguyen Hai

Based on the above reality, to speed up the progress of social housing projects for workers, there needs to be a connection for investors, enterprises with workers and trade unions to sit together; limit and strictly handle the situation of unqualified people buying and transferring for profit. Commercial housing projects built next to the project must be separate and independent from the social housing project so that competent authorities as well as banks can appraise and approve preferential policies conveniently and quickly./.