Participants in the presidential affordable housing program in Uzbekistan claim their rights have been violated. They are unhappy with the price increase, non-compliance with the terms of the contract and accuse the construction companies of poor-quality work.
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In October 2017, the President of Uzbekistan Shavkat Mirziyoyev approved the “program for the construction and reconstruction of affordable multi-storey buildings in cities for 2018 – 2020”. But “affordable” housing turned out to be beyond reach for the population, which led to discontent throughout the country.
At the time when presidential programme was adopted, more than 27 thousand families were registered with the territorial commissions for the purchase of affordable apartments. In 2018, it was planned to build 335 multi-storey buildings for 13,917 families in need of housing throughout the country.
The project is funded by the state budget and funds of international financial institutions such as Asian and Islamic Development Banks, the Saudi Development Fund, the Turkish state bank Ziraat, and others.
Moreover, the Presidential Decree clearly states that the selection of construction companies is carried out by the director of the “Uzshahar Qurilish Invest” commercial construction company Mr. Zufar Narzullaev without any open tender. Technical supervision of the construction process is also entrusted with him.
“Often behind the commercial entities participating in state programs are high-ranking officials and certain business groups. It is very important that the construction of affordable housing for the needy population is based on open competitive bidding and with the participation of the population on whose shoulder will lie the main burden in the form of a loan repayment for tens of years “says Abdurakhmon Tashanov, head of the Human Rights Society of Uzbekistan “Ezgulik”.
Today, the price of “affordable” housing in the regions of Uzbekistan is 8% higher than in the capital, which has led to new manifestations of dissatisfaction and protest among the population of the regions. Moreover, according to Goskomstat, state statistics committee, the level of income and welfare of people living in provinces is two times lower than that of the residents in capital Tashkent.
The joy of a resident of Samarkand Mrs. Saodat (name changed) knew no boundaries when her turn to get a preferential mortgage loan for affordable housing finally arrived. After the death of her husband, mother of three, she had to move for a long time from one apartment to another, and sometimes lived in her brother’s small apartment with his family.
“New houses were built far from the center on the outskirts of Samarkand, but the city administration promised housing at 2.75 million soums (317 US dollars) per square meter”.
At the end of 2018, Saodat was called from the Samarkand city administration and was informed about the readiness of housing, was asked to accept it and move in. Upon arrival, Saodat discovered that the quality of the house left much to be desired.
The housing was built in a hurry and the work was done with violations: the walls are uneven, the plaster is peeling off, the walls are made of laminate and there is no sound insulation, the plumbing is of poor quality, and there is no ventilation shaft in the bathroom at all.
Lawyer and legal expert Mrs. Dilfuza Kurolova notes the fact that the sole executor of the state target program is a commercial company. In her opinion, uncompetitive selection of a contractors could affect the quality of construction. Kurolova also suggests that the quality of construction was influenced by the rush in the performance of work.
“The implementation of construction with the parallel development of design and estimate documentation is one of the main reasons that entailed hasty and not very high-quality construction. We often read comments on social networks about how affordable housing does not correspond to basic construction requirements and urban planning standards “says Kurolova.
The price is rising in front of our eyes
According to the decree of the president, the initial price per square meter of housing throughout Uzbekistan was set at 2.75 million soums (317 US dollars), however, after compiling lists of applicants and receiving their initial down payments, the cost of housing increased by 55% to 4.3 million soums (495 US dollars).
Uzshahar Qurilish Invest LLC explained the price increase was due to the increase in foreign exchange rates, the abolition of preferential prices for cement and metal and their purchase through the commodity and raw materials exchange, as well as the increase in prices for labor, gas and electricity.
Excessive increases in affordable housing prices have led to dissatisfaction on the part of housing programme participants.
On April 9 this year, about 60 residents of the Sergeli district of Tashkent staged a protest outside the presidential administration. Prime Minister Abdulla Aripov personally met with the protesters, and a few days later affordable housing prices were reduced from 4.3 million to 3.25 million soums (374 US dollars) per square meter. But only for residents of the Sergeli district of the capital.
In Samarkand, as part of the affordable housing program, in 2018, 32 seven-storrey houses were built for the needy population. Initially, the promised price of one square meter of housing in the region also amounted to 2.75 million soums (317 US dollars). Accepting this price, Saodat handed over the down payment for the mortgage, but as a result, by the time the paperwork was completed, the price of housing had increased by 27% to 3.5 million soums (402 US dollars) per square meter.
“For reasons unknown to us, the developers and the bank kept delaying the issuance of contracts and registration of a mortgage loan. And eventually in August 2018, they called from the bank and asked to collect documents for a loan, not for 2.75 million, but 3.5 million soums per square meter”.
“For us it was a shock. I still do not know how I will repay this loan, since I originally planned my budget based on a smaller amount”.
Dissatisfied people began to knock on all the doors of state bodies, but to no avail. In the regional administration of the Samarkand province officers stated that this issue is not within their competence. According to officials, affordable housing prices, as well as quality control, are handled by Uzshahar Qurilish Invest LLC itself, a commercial company founded by state funds and commercial banks.
“We only compile lists of people in need of housing and help them get a mortgage,” says Manucher Mirzaev, spokesman for the head of administration.
The square meters which are not there
According to the project and drawings compiled by the design institute of ToshuyjoyLITI JSC, a typical seven-story two-entrance house consists of 42 apartments with a total area of 2940 square meters. The total cost of building one multi-storey building, according to the presidential decree of July 18, 2018, is 8.8 billion soums ($ 1.01 million). These figures were confirmed including by the Uzshahar Qurilish Invest LLC itself in response to the request.
But after the completion of construction and commissioning of the houses, the owners of the new apartments suspected a discrepancy in the actual and declared total area of the apartments. Residents of new buildings received housing on average 7 square meters less than expected.
Experts say this indicates a gross violation of the rules and deviations from the construction plan. This fact was recognized by the State Architectural and Construction Supervision Agency in the Samarkand region. And after the dissatisfaction of the population, the single customer for the construction – Uzshahar Qurilish Invest also admitted that the buildings did not meet the original plan, and the total area decreased from 2,940 to 2,620 square meters in all 32 houses built in Samarkand.
It would seem that the difference of 320 square meters in each house should have affected the reduction in the cost of mortgages payments as well, however, nothing of the kind happened.
According to a certificate from the Uzshahar Qurilish Invest LLC, it added to the construction cost loan costs that were taken by the builders and contractors, although they were already included in the initial cost of the project and had to be paid at the expense of the profit of the builders themselves.
If you examine the current prices of commercial new buildings in Samarkand, then the prices are for one meter square housing starts from 2.9 million soums (333 US dollars). In commercial projects, construction companies themselves buy the land for construction and all communications are carried out at their own expense.
In the framework of the state program, however, builders and contractors are exempted from many taxes, and the supply of communications and other infrastructure is carried out exclusively at the expense of the state.
On August 2 of this year, President Shavkat Mirziyoyev drew attention to the increase in prices for “affordable” housing in the Navoi region of Uzbekistan and instructed the Khokim (governor) to solve this problem.
“If you started construction to support president’s programme, then if necessary, pay construction companies out of your own pocket and satisfy the needs of the residents. Tell the building companies that this year they need to satisfy themselves with what they have, and next year they will make profit,” Mirziyoyev was quoted by Kun.uz.
This article was prepared as part of the Giving Voice, Driving Change – from the Borderland to the Steppes Project implemented with the financial support of the Foreign Ministry of Norway. The opinions expressed in the article do not reflect the position of the editorial or donor.