Monday, 25 June 2007

Construction Problems

Not very good news so far on Mongolia's "40,000 Homes" programme [a government initiative to ease the chronic housing shortage and encourage home-ownership amongst citizens of UB], according to the 21st June UB Post. At a recent conference of the National Chamber of Commerce, representatives of the country's construction firms voiced considerable complaints, particularly about the problem of bribery. Although the language given in the paper is a bit vague, it suggests that bribes in the region of $1,000,000 for the better areas of the city, have to be paid before a given project can commence. The bribes demanded by officials are so high that only foreign companies can afford to build there, so "Foreigners' townships will come up on lands near a water source and with pure air, while Mongolian citizens in their own country have to live in sub-optimal conditions." Even in the less desirable areas, a continual flow of back-handers has to be paid. Certainly, there is plenty of construction going on in the better parts of the city at the moment, and all quite clearly marketed at the foreign buyer. "Project 40,000" is set to succeed, however, because astoundingly, the government has said that every apartment built and sold in the country - including those developments exclusively for foreigners and the super-rich - will count towards the target. In other words, what began as an initiative to improve the standard of living of the population may only serve to push up rental prices and line the pockets of corrupt officials and property speculators.