Housing project turns sour as cash runs out

PUBLISHED : Saturday, 07 April, 2001, 12:00am
UPDATED : Saturday, 07 April, 2001, 12:00am

What began as a hopeful partnership between a destitute Guizhou county and a Chongqing development company - both intent on realising the dream promised by the Government's 'go west' policy - ended with bitterness, worker unrest, death threats and suicides.

Having entered Wuchuan County as an honoured guest, Chen Yun, the general manager of Chongqing Ruixue Industry and Commerce Company, fled the county 18 months later fearing for his life.

Mr Chen's company formed a partnership with the local government in May 1999 to build a 'new city district' clustered with affordable housing, under a contract that stipulated the Government would pay the company in lump sums for each 1.8 million yuan (HK$1.69 million) spent on the project, the Southern Weekend reported.

The contract also stated the company had to assume the cost of developing the land, which would cost 60,000 yuan per mu (0.0667 hectare).

Things had started to turn sour by the end of October, when Ruixue, which had already spent 2.25 million yuan, wanted to be paid. It was actually costing 149,900 to 179,900 yuan to develop each mu of land, and the impoverished Government could not afford to pay the company as promised.

'Our yearly income is only 30 million yuan, and in the end the company wanted 40 million yuan, leaving us with a huge deficit. Where is that money going to come from?' an official with the Wuchun County Government was quoted as saying.

The first 1.8 million yuan was reportedly not paid by the Government until April 2000, and by that time the relationship between the company and the local Government had deteriorated.

Work was reportedly held up on numerous occasions as each time the government officials found one aspect of development not up to par, they forced all work to stop.

The situation worsened as local workers were only partially paid and often not on time, because the company claimed it had not been reimbursed by the Government.

On June 17 last year, a local woman construction worker, Tian Hongying, committed suicide at home after failing for an extended period to receive her pay cheque from the government construction command centre.

Two weeks later, after worker Wang Jing tried without success to convince the four top county officials to pay money toward the project, he too committed suicide.

Although a letter by Mr Chen detailing the suicides pushed the Government into paying the second 1.8 million yuan to the construction command centre on August 19 last year, officials there still refused to transfer the money to Ruixue Company.

Six workers arrived at Ruixue Company on October 27 demanding to be paid. When a quarrel broke out, they returned with 200 friends and relatives armed with knives, guns and steel clubs, threatening to beat company executives to death, the report said.

According to the report, Mr Chen escaped and went into hiding, fleeing with his colleagues and some of the construction equipment a few days later.