CHINESE FIRMS TO BID ON LOW COST HOUSING IN FIJI

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Projects to cost $37 million

SUVA, Fiji (Fijilive, April 29, 2008) – The Housing Authority (HA) of Fiji will now formally invite proposals from three Chinese firms for the development of low-cost housing projects in Fiji that is expected to cost around FJ$55 million [US$ 36.9 million].

Authority chief executive officer Alipate Naiorosui said he and his team would work closely with the HA’s new board to ensure that the proposals received met their expectations.

[PIR editor’s note: The Housing Authority of Fiji is in the business of providing homes to the people of Fiji. This is achieved through the development of fully serviced residential lots and mortgage financing for residential purposes.]

They are expected to look at low cost housing objectives, in particular the quality and affordability of housing.

Earlier in the year a memorandum of understanding was signed with three Chinese firms, all of whom have now returned to China.

The MOU was to carry out a feasibility study on low cost housing projects for Fiji and was linked to the proposed Chinese concessionary loan to be given to the Fiji government, Naiorosui explained.

He said that over the past month and a half, the authority has been exchanging information with their Chinese counterparts.

"When they came earlier they made presentations on the various models (of housing) that they planned to do," Naiorosui said. "Over the past few weeks, my team involved in housing development work has been emailing all information necessary required by these firms to enable them to understand the market, our preferences, expectations, customer needs and so on. That has been done. We now invite them to submit their proposals formally to us. They have asked for engineering designs, the land area, the sites which we have done. They visited the sites when they came here. By the end of this month, we hope to clear all the exchange of information required."

Naiorosui said there would be two aspects to the proposal. One is for land development (land clearing and leveling and putting in infrastructure including roads and water) and the second for the actual construction of low cost housing.

Asked the type of house models chosen, Naiorosui said they could reveal anything at the moment.

"It could be singular, double storey, three or even four storey but that is something for the HA management, the board and the government to carefully consider and evaluate before taking decisions," he said.

In terms of time line Naiorosui said this was very urgent.

"Given the high demand and the constraints of funding and capacity in the local market, I want this very, very quickly. We also would like to speak to the Ministry of Finance and the Prime Minister’s office in this regard."

The PM’s office co-ordinates the Chinese concessionary loan projects of which low cost housing is one.

The Chinese government is considering giving Fiji the loan at 2 per cent interest rate and the term of 20 years.

"So $55m at 2 per cent is good, unless someone else can offer cheaper," Naiorosui added.

"We cannot get that money anywhere in Fiji right now. That is quite cheap and very much affordable for our people. Imagine if you lend that money to our customers, when you build the houses and when you give them at very low rates it would make a whole lot of difference in terms of affordability."

He said the local market rate right now was at an average of 7-9 per cent for about 10 year bonds.

"Take 7 per cent; if you get the Chinese loan at 2 per cent, you save 5. And when you are borrowing millions of dollars, that is huge."

One of the loan conditions would be a preference for a Chinese State-owned company to undertake the work.

Naiorosui said paying off the loan would not be a problem.

Fijilive: http://www.fijilive.com

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