Proposal to select investors for social housing projects without bidding

This is one of the contents of the draft Resolution on piloting special policies for social housing development, which is being consulted.

According to the Ministry of Construction, from 2021 to now, the country has implemented 655 social housing projects with a scale of more than 593,400 units. Of these, 103 projects with 66,755 units have been completed. The Ministry assessed that investment in this type of housing is still slow, mainly because the bidding to select investors must carry out administrative procedures and take a long time of 6-12 months.

Even when the project has an approved construction plan and is included in the local land use list, investors still take nearly 300 days to sequentially carry out the steps from approving the policy to signing the project contract. In Ho Chi Minh City, if they flexibly implement parallel procedures, they still take about 200 days.

Faced with this situation, the Ministry of Construction proposed a pilot program for provincial People's Committees to assign investors to social housing projects without bidding (ie designated bidding). Localities select investors based on proposals from the Department of Construction.

According to the draft, within 30 days from the project announcement, if only 1 enterprise registers and meets the conditions, the Department of Construction will report to the Provincial People's Committee to assign this unit as the investor.

When there are two or more enterprises registering to implement the project, the selection of investors is prioritized based on criteria and order of experience, such as having done many social housing projects, financial capacity (having a higher equity ratio), progress (proposing the shortest implementation time) and resettlement support compensation plan (choosing the unit proposing to advance more money). In case the investors have the same capacity and meet the same criteria, the Provincial People's Committee will choose the enterprise that registered earlier.

The drafting agency also proposed that the selection of investors for housing projects for armed forces be under the authority of the Ministry of National Defense and the Ministry of Public Security. Similarly, the Vietnam General Confederation of Labor will be responsible for selecting investors for projects using trade union financial resources for workers and laborers.

According to the Ministry of Construction, the above proposals will help the State attract more resources to invest in social housing construction, increase supply, shorten implementation time and ensure social security policies.

In addition, this agency also proposed to research and establish a National Social Housing Development Fund from the budget and other legal capital sources to have a sustainable, long-term cash flow for social housing.

Currently, there are 42 funds operating nationwide, of which 95% are development investment funds. However, these funds are facing difficulties due to lack of additional sources, making it difficult to provide long-term capital for social housing development.

Once established, the National Fund will be directly invested in creating a supply and managing social housing. The Fund will also have a role in supporting interest rates for loans that do not require collateral or supporting businesses investing in projects...

Regarding profit margins, the Ministry of Construction proposed increasing the maximum margin from 10% to 13% for investors implementing social housing projects. Previously, the Ho Chi Minh City Real Estate Association proposed that the Government consider increasing the profit margin for social housing project investors to 15%. The Hanoi Department of Construction also proposed increasing this margin to 15-20% but faced many opposing opinions.