Bo Xilai

Bo Xilai and his white elephants

PUBLISHED : Thursday, 09 August, 2012, 12:00am
UPDATED : Wednesday, 15 August, 2012, 11:15pm

Liao Bigang long dreamed of moving out of his 700 yuan (HK$858) a month shack in one of the slums of inner Chongqing.

Every day he feared for the health and safety of his six-year-old son, who was growing up in filthy and unsanitary conditions infested with rats and cockroaches, where drug addicts and hoodlums prowled.

Being a single parent and leaving his child in the care of a neighbour while at work in a brokerage house did not help ease his worries.

One day, the 39-year-old clerk startled his colleagues when he jumped with joy after learning that his name had been picked for a public rental flat in Liang Jiang Ming Ju ('Two Rivers Famous Residence').

The new home was in a new housing project built by the Chongqing government in Beibei district, on the outskirts of the city.

It was one of the developments hailed as an achievement for the administration of the now-disgraced Bo Xilai, Chongqing's former party chief.

'I felt like I won the grand prize in a lottery that day. I immediately thought that, at long last, our days of poor living conditions were over,' Liao said.

His son was elated when they moved into their new, 50-square-metre flat in March.

The overcrowded and filthy living conditions were behind them and the boy had access to a playground and open spaces to explore.

The ballot for the city's first low-rent housing project, the development at Min Xing Jia Yuan ('People's Dream Home'), had generated a strong response a year earlier.

It was close to the central urban area and its apartments had high-quality interior fittings.

At first, the Ming Xing Jia Yuan project served as a model and caught the attention of the nation's top leaders, lifting Bo's popularity to new heights. But demand for the public rental housing projects started to decline when poor transport links to remote estates became apparent.

It was also around this time that Bo was deposed as Chongqing's party chief and suspended from the Politburo, amid allegations that he breached party discipline. His wife, Gu Kailai, goes on trial today for murdering her British business partner Neil Heywood.

Initially, Liao's rental costs came down sharply, as he now pays only 500 yuan a month at Liang Jiang Ming Ju, or just over nine yuan per square metre.

But are he and his son still happy? Far from it, unfortunately.

'I thought all my problems would go away when we moved here. I was dead wrong,' he said.

Construction of a light rail system, originally planned to take residents at the project to central Chongqing from the end of this year, has not even started.

Indeed, the only evidence of it is a signboard near the single, multi-lane highway linking the new town with the city.

Liao said: 'Transportation is the single most serious problem in this housing estate. The bus service is highly irregular and it takes me up to three hours every day to travel to and from work in downtown Chongqing.

'By the time I get home, I'm too exhausted to enjoy time with my son and all I want to do is to simply go to bed and sleep. I spend about 200 yuan for travel a month and this means I have not achieved any cost savings by moving here.'

Liao's plight is typical of the sad state of affairs at Liang Jiang Ming Ju, which the Chongqing government envisaged would house more than 20,000 people and help put an end to the congestion in the city's densely populated inner slums.

He said: 'I believe that only about 5,000 people live in this housing estate although all 59 blocks have been completed.

'The problems that I experience daily must be the biggest reason why many Chongqing residents do not want to move here.'

Last year, the central government embarked on the world's biggest public housing programme to resolve housing problems aggravated by the rapid urbanisation and soaring property prices that forced millions of low- to medium-income earners, like Liao, to live in shanty homes for decades.

Wary of social instability, Beijing pledged to build 36 million subsidised apartments across the country between 2011 and 2015 - more than enough to house the entire population of Canada (34.4 million).

Today, seven million social housing units in 18 provinces have been completed. The programme has won praise but also criticism, as the apartments are too far away from central urban areas, the workmanship is poor and the added pressure on local governments' financial capacity has been heavy.

Last month, the National Audit Office released a survey of public housing built in 66 cities and counties including Chongqing, Hebei province and Inner Mongolia from November to March.

It found that local governments had misused nearly 3 billion yuan in funds last year that had been set aside for social housing projects, instead spending it on private residential projects or infrastructure.

Chongqing is believed to be the nation's fastest-growing city, with 16.4 per cent economic growth last year and a population of almost 30 million in the metropolitan area.

It has been a showcase for the mainland's public housing policies, with 600,000 people moving into public rental housing by March.

But the southwestern city had promised under Bo's regime to build 40 million square metres of public rental housing to house two million people at a cost of 140 billion yuan in the three years to 2012.

About 30 per cent of the finance came from the government and the remaining 70 per cent from debt financing such as bank loans and social security funds.

Chongqing's ambitious and aggressive public housing programme was conceptualised and adopted when Bo reigned supreme in the city, and was seen as an important factor in the likely success of his national ambitions.

Chongqing's housing scheme was widely praised in the national media and the state news agency Xinhua named Chongqing as the mainland's 'happiest' city in December.

But since Bo's demise, that title seems to have been forgotten, as problems emerge in the city's basic and vital support infrastructure - particularly the absence of a light rail system meant to serve the outlying housing estates - the lack of jobs for residents in the new towns and the lack of medical facilities.

Despite the shortcomings, the government has nevertheless proceeded with asking thousands of city residents to relocate to the new towns. The response has been slow and, as a result, places like Liang Jiang Ming Ju have become huge white elephants.

Ma Zhili, a professor at Chongqing University's school of construction management and real estate, said: 'No city in the world of the size of Chongqing could build such large-scale public rental housing in three years. In such a short period of time, it is unavoidable that the quality of the housing will be compromised.'

In the rush to meet the deadline, Ma noted that the average completion date for a public rental housing block was 12 to 16 months, compared with two years for a tower in the private sector.

He said: 'With time constraints, there is no doubt that lots of steps such as testing for preventing water leaks in the bathroom will be skipped.

'For normal procedures, it will take three weeks to test the bathroom and kitchen floor to see if any water is leaking to the lower floors.'

Under Bo's blueprint, the 21 proposed public rental housing projects, in the urban area or in the suburbs, would be accessed by the city's subways and light rail system and the bus networks. There would be shops, schools, hospitals and job opportunities to be provided at nearby industrial parks.

In contrast to most cities, where a cap is put on household income, the Chongqing programme accepts applications from anyone aged over 18 or families who do not own property in the city or who live in an area of less than 13 square metres per person.

Non-local residents, such as migrant workers and university or technical school graduates, who can provide proof of one year's regular income are also eligible.

The rent is set at about 60 per cent of market price. Tenants are able to buy their apartment at cost after living there for five years.

But they may sell them only to the city government at the purchase price, and not on the secondary market, in a measure designed to prevent profiteering.

Andy Xie, an independent economist, said most cities which had taken part in the national housing programme had encountered similar problems of inaccessibility and a lack of construction quality.

'Local governments are unwilling to allocate prime location for public housing, as they desire the revenue from land sales. Inevitably, the public housing projects are in inaccessible locations,' Xie said.

'People who qualify for public housing will have trouble paying for transportation to working locations.

'Over time, the infrastructure may be built to make such housing units desirable. But, by then, these housing projects may have already become uninhabitable due to poor maintenance.'

Although Bo's aggressive investment in roads, bridges and social housing drew wide support from residents, the policy also drew criticism that it could lead to overspending and mounting debt.

The removal of Bo as Chongqing's party secretary in March prompted speculation that the financial capacity and political will of the government to pursue the ambitious social housing target could be affected.

Lee Wee Liat, head of property research at BNP Paribas Securities (Asia ), said it was no surprise that Bo's project would come under scrutiny following his downfall.

Lee said: 'Public rental housing is still the nation's top priority and Chongqing's target will be reached.

'But the demand in the suburbs will be in question if the new government cuts down on public spending, for example by delaying the extension of the light rail system to rural areas. With a poor take-up rate, those new housing estates in the deep suburbs may end up as white elephants.'

In response to a request from the South China Morning Post for comment, a spokeswoman for the Chongqing municipal bureau of land resources and housing administration said: 'All [public rental housing] projects will proceed according to schedule and there is no change in policy under the new government.'