Work at Country Garden sites in China had to stop briefly while safety inspections were done. Photo: iStock
Work at Country Garden sites in China had to stop briefly while safety inspections were done. Photo: iStock

China’s biggest property developer Country Garden has resumed work on most of its projects after an accident last week at a construction site in eastern Anhui province that killed six people.

Shares in the world’s largest developer dropped 7% after the accident, which prompted Country Garden called an immediate halt so it could undertake inspections and a safety check on all construction work.

The developer has reportedly had other safety incidents over recent months, according to Chinese media reports. Reuters said the Anhui accident raised questions about quality control as developers chase fast cash collection and amid a common industry practice of outsourcing construction work to other companies.

Analyst Shenwan Hongyuan said the accident in Anhui highlighted concern that Country Garden may have over-stretched its sales and work in the short-term.

Country Garden recorded a 78% growth in sales to 412.5 billion yuan (US$61.8 billion) in the first half, which easily set it apart from its global rivals. That meant the developer based in Shunde district in Guangdong sold an average of 2.28 billion yuan worth of flats every day in the first six months this year.

It has emerged that the company allegedly had an internal guideline to speed up its land sales process.

In one of its residential projects in Gulin, a city in southern China, Country Garden hosted a foundation ceremony on March 23, and after a month of construction work, it reportedly started pre-sales on May 1.

A memo signed by company president Mo Bin allegedly said that work on property projects in third-tier cities must kick off within 40 days after a site is secured.

Project managers would allegedly get a special bonus of 200,000 yuan if they could start work once the firm acquired the land, but their bonus would be deducted by 10,000 yuan every day after that, reported.

If they managed to start work on the 21st day, their bonus allegedly dropped to zero. And they would allegedly face a fine of 200,000 yuan if they started work on the 40th day after a site was secured.

Meanwhile, project managers could allegedly get a bonus of 200,000 yuan if showrooms were launched within 35 days after the land was acquired.

But these incentives and pressure to rush sales – if true – could have hit the quality of some projects, critics have said. Apple Daily of Hong Kong counted 10 lives allegedly lost in five construction site accidents at Country Garden sites over the past 12 months.

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