Southern workers out in the cold

Ho Chi Minh City currently houses 15 industrial and export processing zones (IEZs) with more than 1,200 valid investment projects attracting 160,000 labourers with more than 70 per cent of them coming from other localities, according to head of Ho Chi Minh City Export Processing and Industrial Zones Authority (Hepza) Vu Van Hoa.

“The demand for worker housing is critical. However, more than 97 per cent of IEZ workers in Ho Chi Minh City have to lease housing,” said Hoa.

Scarce land and a capital drought has made it difficult for housing developers to cater for Ho Chi Minh City IEZ workers. Particularly, in 2011 seven out of nine such projects were refused to lend by banks.

“In existing IEZs two 12-story blocks in Tan Tao IZ, one nine-story block in Linh Trung 2 EPZ, 50 simple housings in Tan Thoi Hiep IZ and three five-story buildings in Le Minh Xuan IZ have got the thumbs up, providing dwellings for 6,310 workers,” said Hoa.

In Can Tho city, by 2015 the city proposed to host eight IZs attracting 100,000 workers. City authorities will provide accommodation for half the workers. However, no housing project has got off the ground.

According to Can Tho IZ Infrastructure Construction Company (Cipco) director Vo Ngoc Ho, the company earmarked over 2,000sqm with complete infrastructure and hired a consulting firm to design two living blocks for workers to call for investment. However, no investor has climbed onboard.

“Our scarce capital sources are focused on building IZ infrastructure, so building workers housings are now beyond our financial capacity,” said Ho.

“IZ planning in the past did not cover worker housing, making it hard to source land for carrying out such projects alongside costly land acquisition costs,” said deputy head of Tay Ninh Economic Zone Authority Kieu Cong Minh, adding that in 2011 the EZ Authority was assigned VND10 billion ($475,000) to build worker housings, but no land was available.

The government needed to render more incentives to shelter projects for IEZ workers such as allowing developers to use proposed land as collateral to take on loans, according to Hoa. Besides, banks need to extend loan duration with preferential interest rates to lure investors.