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A waste of the people’s money
Son Nguyen
Friday,  Oct 27, 2017,13:45 (GMT+7)

A waste of the people’s money

Son Nguyen

A huge waste of financial resources is looming large as three condo buildings in Hanoi’s Long Bien District may be demolished following a proposal by the project owner. The three buildings, with 150 apartment units in total, have been left unoccupied for around 10 years, as people affected by a road project refused to take over the resettlement condos on the ground that such housing units were not suitable for them.

Project owner Hanoi Construction No. 3 JS Company, or Hanco3, now petitions Hanoi City authorities for permission to tear down the buildings to develop a commercial condo project there, saying leaving the buildings unattended to will be a waste of resources. That possibility is high, despite the fact that numerous people in Hanoi still do not have a home, and despite a loss of millions of dollars having been spent on the construction. The big question that arises is who will bear such losses.

According to Tuoi Tre, the construction of the three buildings took place in 2001-2006, with an aim to resettle those people affected by a project to develop Sai Dong Road. When the condos were completed, the affected people rejected the resettlement plan, and as such, the road project also came to a halt. Having been unoccupied for over a decade, the three buildings have deteriorated as a result, and with the vision of such apartments unable to find homebuyers, Hanco3 has now come up with the demolition plan.

Hanoi City authorities, upon the petition, have demanded that the project owner map out two options for comparison of pros and cons, according to the news site zing.vn. The first one is to renovate and upgrade the buildings and turn them into the so-called social housing units to accommodate the people entitled to the Government-sponsored housing program, while the second is to tear down the buildings and develop new commercial condos. Nguyen Chi Dung, deputy director of Hanoi City’s Department of Construction, says in Tuoi Tre that the city’s authorities have not made a decision on the fate of the deserted condo buildings pending the project owner’s explanations on the two options.

The key reason behind the failure of the project, according to zing.vn, is the low quality of such condos. All the three buildings of six floors are not equipped with lifts, while the quality of construction is low, which explain why residents have rejected them. The condos are measured at between 45 and 70 square meters each, and were initially offered at VND18-22 million per square meters.

Apart from the low construction quality, another reason was the preference of land lots among the affected people to build their own houses, according to Vnexpress.net. This fact raises the question over the need to have condo buildings for resettlement, according to Pham Sy Liem, vice chair of the General Construction Society.

Liem, who used to serve as deputy minister of construction, says on Bao Dat Viet news site that authorities should not necessarily develop resettlement condo buildings but should pay money to affected people so that they can decide where and how to resettle themselves.

Resettlement housing units can be suitable for residents if such units are located in inner-city districts, while in outlying districts such as Long Bien, such people would prefer living in landed homes, Liem explains.

However, “enterprises still want to develop resettlement condo buildings (in outlying districts) because such developments are cheap. Even if they accept such resettlement condos, many still refuse to move in,” he is quoted in the paper. This point is also echoed in the news site Vneconomy, which says that many resettlement apartments in Hanoi have been handed over to residents, but such people have still not moved in.

The news site says most people are not happy with resettlement apartments due to the low quality. In many resettlement projects, the surrounding infrastructure and other auxiliary facilities are not sufficient or ready to support their living. For resettlement projects, the investors often develop the buildings, then hand over the projects to other State agencies for management, without caring about the operations of such projects. “That is the reason why the quality of resettlement housing projects is always lower than that of commercial ones,” says Vneconomy.

Therefore, the doomed fate of the 150 apartments developed by Hanco3 may be just the tip of an iceberg.
Petrotimes, citing data from Hanoi’s Department of Construction, says that in Hanoi City, there remain nearly 1,000 apartments that have not been handed over to residents though their construction was completed long ago.

As seen in local media, the imminent demolition of the three condo buildings developed by Hanco3 is a huge waste, but to a larger extent, numerous resettlement projects in Hanoi City and elsewhere in the country also pose a serious question over the efficiency of resettlement housing programs. It is high time to rethink such programs to ensure financial resources are not wasted.

In Tien Phong, an official of Hanoi City’s Department of Construction says that the three condo buildings are part of the project with capital from the enterprise, so the responsibility in this case first rests with the project owner. While it is unclear who will bear the brunt of the losses from the demolition, such a move will still be damaging for the economy as a whole.

Also in Tien Phong, a financial expert doubts if Hanco3 will bear the financial losses. “When developing these three condo buildings, Hanco3 was still a State-owned enterprise. Therefore, it is imperative to clarify whether the cost of constructing the three buildings has been reimbursed to the enterprise by Hanoi City’s government.” If so, it will be a waste of the people’s money.

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