The lack of capital is having a significant impact on the progress of a series of real estate projects. Many projects in Hanoi are stalled. The shortage of the material and infrastructure, such as schools and markets inside and outside the projects, leave buyers in a dilemma. This is the result announced by Hanoi Construction Department after inspecting 15 urban areas and housing projects for low-income people.
Social infrastructure is not focused
According to the Department of Civil Engineering, all projects inspected are behind schedule. What matters now is that most of the projects ignore the construction of social infrastructure such as schools, kindergartens, markets, health centres and the public works to serve people. Even there are some completed projects that have been put into use, but no part of essential works and public utilities are built.
Typically the new urban area project in Dai Kim-Dinh Cong in Hoang Mai district invested by Hanoi Housing and Urban Development Corporation with the scale of nearly 24 ha, with committed construction time from 2002 to 2007, still has 3.426m2 of land uncleared. Much social infrastructure within the project has not been synchronously deployed as planned, while the project has completed construction of 1,117 out of the total 1,125 villas and three high-rise apartment blocks.
North Dai Kim-Dinh Cong expanded apartments project is also invested by Hanoi Housing and Urban Development Corporation. Progress scheduled for its infrastructure was from the fourth quarter in 2003 to the first quarter in 2005; however, the project has cleared only 8 percent of the total land area.
South An Khanh New Urban Area invested by Song Da Urban & Industrial Zone Investment and Development Joint Stock Company with an area of 189.7 ha is also in slow progress.
According to Mr Tran Duc Hoc, Deputy Director of Hanoi Department of Construction, South An Khanh project has been implemented since 2004, but at the time of inspection, the investor had built 588 out of the total 620 low apartments in the area. Worryingly, the project planned 8.3 hectares for the construction of public buildings and schools but none of these have been constructed. The project owner made an excuse that no apartments have been put into use yet. Projects of Thach Ban and Hanoi Garden City in Long Bien district are also in slow progress. As planned, the two projects were supposed to be completed in the period from 2012 to 2013. However, Thach Ban housing project still has 2 hectares uncleared because the district fails to move a cemetery and faces with complicated compensation policies.
Blaming on the circumstances
As explained by investors of South An Khanh urban area and Hanoi Garden City, repeated adjustments have affected their opportunities. Besides the deterioration of the real estate market has a great influence on the ability to raise capital for the project. During this period, most people are cautious about the project by the limitations of technical infrastructure far from focal area projects and difficulties in traffic. The difficulties of the objective factors make many investors ignore social infrastructure investment projects due to low efficiency.
In addition, there are also some projects behind schedule due to objective reasons such as Yen Binh Eco-villa in Thach That district, which is suspended to wait for Hanoi planning. Tien Xuan Urban Project is also suspended to serve the review and planning of Hanoi.
The difficulties and problems in the process of implementing derived from objective reasons also affected the progress of the project. The investors have also written petition to the city authority and departments to focus on solving the existing problems, especially the site clearance. According to the investors, the city should have a mechanism to remove bottlenecks on compensation, support and resettlement and have specific guidelines for valuation of land at market prices as a basis for determining the land use fees and land rents for the project.
Many investors also said that ministries and central agencies need to adjust to reduce unnecessary administrative procedures, support the capital demands for investors and those have real demand to access to cheap capital and support businesses to continue to comply with the planning of the project.