Capital shortage is hampering the implementation of social housing projects, such as those for workers in industrial zones and low-income earners in urban areas, according to the Ministry of Construction.
As of May 31, only 57 out of the 201 applicants for low-interest loans have been successful, the ministry said.
By the end of May, only 33 housing projects with a total investment of VND2.5 trillion (US$132 million) for low-income earners that would have benefited some 55,000 residents, have got underway. Meanwhile, 97 other projects have been put on hold due to a lack of capital.
In terms of housing projects for workers, 24 have begun, worth a total investment of VND2.6 trillion ($138 million). These will provide accommodation for 125,000 workers. However, a shortage of funds has halted 47 other schemes.
Deputy Minister of Construction Nguyen Tran Nam said the major reason for the shortage of funds was a lack of willingness by the private sector and local authorities to invest in these projects.
Nguyen Dinh Duong, director of the Ha Noi Institute of Social and Economic Development Studies, said the largest obstacle enterprises were facing was access to capital loans.
“The investment registration procedures are generally much more complicated than the case with normal real estate projects in terms of design, tender, and approval of estimated expenditure. At the same time, investors aren’t allowed to mobilise funds after the completion of the foundation’s design phase for commercial housing,” he said.
Duong said that with the exception of large construction companies such as VINACONEX and HUD whose financial capacity was solid, most firms lacked the resources to run these projects in the absence of preferential loans.
In response to the situation, Pham Trung Tuyen, head of the office of the Central Steering Committee on Real Estate Market and Housing Policy, said the finance ministry and Viet Nam Development Bank agreed to allocate VND7 trillion ($371 million) in preferential loans to 32 housing projects for low-income earners. The funds would also be made available to another 11 projects for workers in key areas such as Ha Noi, HCM City, Da Nang and Dong Nai.
Nam said the ministry was also seeking to find other sources of funding such as foreign direct investment and official development assistance. Domestic credit organisations would also be approached, Nam said.
As of now, the total number of registered housing projects for workers is 264 with a total investment of VND60 trillion ($3.2 billion). A further 263 housing projects for low-income earners with an investment of VND72.7 trillion ($3.9 billion) have also been registered.
