By Gulnoz Mamarasulova
Affordable housing projects funded by foreign investment are an important initiative to benefit low-income families in need of housing, especially in rural areas, but there are several challenges.
In June 2020, the Asian Development Bank (ADB) approved the allocation of a results-based loan of $500 million to support a project for the construction of multi-story affordable housing for families in need in rural areas of Uzbekistan, but monitoring results show that there is a need for serious inspection and accountability as residents complain about poor quality.
Within the framework of this project, loans for the construction of at least 29,000 new affordable housing units were allocated in nine regions of the country. The program was implemented through the state banks — Ipoteka Bank, National Bank of Uzbekistan, and Qishloq Qurilish Bank — and by the state engineering company Qishloq Qurilish Invest.
Uzbekistan has long been Central Asia’s most populous country and its demographic growth remains robust. According to statistics published at the beginning of the year, the population of the republic has exceeded 36 million. With this population boom, demand for housing has also increased, and this raises serious concerns about the fate of the population in need of social protection. If the state fails to address such issues, it may lead to a serious socioeconomic crisis.
In order to assess the scale and quality of measures the government is taking to address these issues, the Association of Central Asia in Uzbekistan Representative Office (ACARO) carried out monitoring in four regions of Uzbekistan. The monitors had many questions: What is the scale and quality of measures being taken to address housing and social protection issues? Are loans from international banks being used for proper purposes, free from corruption? Which responsible organizations that monitor these projects have published monitoring results? Were the investigations transparent and fair?
According to the results of research carried out this year by ACARO, foreign investments in the construction of affordable housing did not completely fulfill their intended social objective due to the low quality of construction. According to the respondents who bought social housing units, the local authorities did not approach the construction works responsibly.
In the course of the research, interviews were conducted with approximately 50 owners of units in multi-story residential buildings constructed with ADB funds in the regions of Tashkent, Samarkand, Namangan, and Qashqadaryo. Monitors also studied the purchase documents of the residences, the quality of construction, and other problems that owners reported.
When monitors arrived at the first multi-story building in the town of Nuristan, Nishon district, an unpleasant situation presented itself immediately. An electric transformer was situated near a children’s playground. Children were seen playing on the open field, just 10 meters away from the transformer, which was not surrounded by protective fences. “Even this children’s playground was not finished,” said one of the respondents who lives in the apartments.
In addition, residents in all areas surveyed complained about the low quality of construction, and said that it that did not meet requirements. The infrastructure around the residential buildings was also often not well developed, leading to problems with sewage, drinking water, and other issues.
“Problems started a month after we moved into the new house. That is, the interior of the house and the materials used were completely unsatisfactory. The walls began to crumble immediately, perhaps because they were made of clay, not cement. Sewer and water pipe connections are not properly sealed. The door and window handles were of very poor quality, so we had to replace them. The heater often broke down and had to be replaced. Due to the poor quality of the sinks, toilets, and bathtubs, they soon started to rot,” said another resident.
According to the owners of units in Nishon district, a drinking water pipe was laid at a depth of 1.5 meters in front of the residential buildings. This water pipe bursts several times every year. It takes several days and residents’ money to repair it, and as a result, water does not reach the homes for several days. Due to the fact that landfills are located very close to the houses, the stench causes significant inconvenience to residents, especially in the heat of summer. The spread of harmful insects and unvaccinated dogs roaming the landfill pose a serious threat to the health of nearby residents.
The majority of residents living in high-rise residential buildings in the regions of Tashkent, Samarkand, Namangan, and Qashqadaryo regions who were interviewed said that the apartments they bought did not meet standard requirements. In addition, there is a very high probability of nepotism and corruption affecting the registration of units. Some of the respondents said that there were many attempts to acquire apartments by illegal means, with some people allegedly using their connections and close acquaintances who work in high positions in various government bodies to advance in the queue. As a result, the affordable units went not only to those who really needed a home, but also to people who simply wanted to own more real estate.
Forty percent of residents who spoke to monitors said they reported their complaints to the local authorities, but inspections were superficial or no inquiries were made at all. The remaining 60 percent of respondents said that they believed that complaints would be ineffective and had no trust in the system.
Indeed, one of the main problems reported by residents was the ineffectiveness of complaint mechanisms. As one respondent said, “As usual, we first complained to the hokim of our district, then to the region and then Tashkent. The result is the same at all stages — a big zero! Some scrawny, bespectacled person in a suit is sent to investigate complaints. They, in turn, scribble something down on their notepads. With this, you see, ‘problems are solved!’”
Most of the residents monitors spoke to did not believe that the funds spent on the multi-story houses built in rural areas by foreign investors were allocated correctly. They emphasize that it is necessary to seriously re-examine the work of construction companies that supply poor construction materials and work.
One resident was skeptical the problem would be addressed appropriately. “My message to them is simple: steal, but do it with a little honesty! Please, let’s establish a body that will comprehensively investigate those who are looting public money so greedily, and recruit personnel who will not take bribes for this body!”
Affordable housing projects funded by foreign investment are an important initiative to benefit low-income families in need of housing, especially in rural areas. However, the socio-political environment of Uzbekistan, where the level of corruption is high in various sectors, poses a challenge to successful implementation of such projects. It is necessary to carefully control allocated funds to ensure that they are used for the right purposes. Quality control and oversight mechanisms of the projects should also be improved, with transparency a top priority from the issuing of tenders all the way through the completion of construction.
Continuous monitoring during the implementation of projects is also necessary, as is engagement with civil society and journalists who can work to verify information.
The lack of comprehensive inspections of previous projects and the lack of proper handling of residents’ complaints seriously jeopardizes the success of future projects. It will be critical to provide an effective mechanism to not just accept complaints but provide redress to residents affected by poor quality construction and violations of health and safety requirements.
The concerns raised around the ADB’s affordable housing project are a timely warning. On December 11 of this year, the bank approved a $240 million loan to improve 700 kilometers of rural roads in Uzbekistan, making them safer and more climate-resilient to enhance connectivity and promote rural development.
Gulnoz Mamarasulova is a human rights defender and director of the Representative Office of the Sweden-based Association of Central Asia in Uzbekistan.