Industrial park development requires housing for workers

Tuesday, Dec 30, 2014 08:29

Residential area for workers at Thang Long Industrial Park in Dong Anh District, Ha Noi. There are more than 2.2 million workers working in industrial parks, many of whom rent small rooms with poor sanitary conditions. – VNA/VNS Photo Hoang Lam

HA NOI (Biz Hub)— A recently amended master plan for developing industrial parks urges faster construction of social housing for workers.

There are currently more than 2.2 million workers in industrial parks, 98.5 per cent of whom are Vietnamese. This number is projected to rise to 7.2 million by 2020 under the master plan, including an estimated 4.2 million who would need housing.

Most migrant workers in industrial parks come from the countryside and pay at least VND200,000-300,000 (US$9.5-14) in monthly rent, according to a Government report. Their average payment is VND3-4 million ($140-190).

These rented spaces are narrow with only 2-3 sq. m per person and sanitary conditions are often poor.

Five years after the Government implemented a plan to build social housing for industrial park workers, there have been 64 such projects nationwide with total investment of VND4.4 trillion ($211.4 million), producing more than 20,200 apartments. Another 59 projects with a total investment of VND18.1 trillion ($861.9 million) are being constructed and will provide nearly 67,000 apartments.

Still, housing remains an urgent need, construction officials said.

"Many industrial parks have not set aside suitable areas for workers' housing. Besides, enterprises are hesitant to invest in housing for workers because it requires a huge long-term investment. The bank interest rate for construction is still high and it takes a long time to recover capital," said Nguyen Manh Ha, director of the Ministry of Construction's Housing and Real Estate Market Management Department.

Ha said that preferential policies to invest in social housing had been largely neglected, adding that the preferential levels also depended significantly on localities' conditions and regulations.

"There have been many Government regulations simplifying administrative procedures, but implementation in some localities is still slow, hindering investors," he said.

Minister of Construction Trinh Dinh Dung said that his ministry had worked with relevant ministries and sectors to submit a decree to the Government last year on developing housing projects.

Under the decree, those investing in housing for workers would be exempt from land-use and land-lease fees, he said. The investors would also enjoy a 50 per cent discount on value-added tax, exemption from corporate income tax, preferential loans for investment and financial support for infrastructure construction.

Additionally, the new decree allows workers in industrial parks to buy houses instead of only renting them.

However, to meet demand by 2020, the construction minister said it was necessary to create favourable conditions for investors by shortening administrative procedures, including those for changing commercial housing projects into social housing projects. — VNS

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