In an open field 30 kilometres (20 miles) south of Angola's chaotic capital, a $3.5-billion city seems to rise from nothing, a showpiece in government's drive to build one million new homes.

Dubbed the "new city of Kilamba Kiaxi", it's the antithesis of overcrowded Luanda's traffic-choked streets and is being built -- like so much else in Angola -- by Chinese contractors.

Here broad boulevards and landscaped lawns lace the neatly arranged apartment buildings, painted in shades of yellow, blue and green according to their height.

The first phase, due for completion in December 2012, will provide housing for 120,000 people in 710 apartment buildings rising up to 13 stories, complete with schools, shops and parks, said Hamilton Jorge Faria, the engineer heading the project for Sonip, an arm of Angola's ubiquitous state oil firm, Sonangol.

"We have Luanda, the old city, and this, the new town," he said, showing off one of the first completed blocks.

"We don't have to concentrate everything in Luanda. We have to expand. We have plenty of land," he said.

Colonial Portuguese planners designed Luanda for 300,000 people, but it's now home to an estimated five million, about one-third of the national population.

During the country's 27-year civil war, Angolans fled to the relative safety of the capital, which was largely spared from the violence. With peace in 2002 came economic opportunity, driven by the country's oil wealth, which drew job-seekers from the impoverished countryside.

That has created a housing crisis, where few people have decent shelter and even fewer have electricity or water.

President Jose Eduardo dos Santos, in power for 30 years, has identified housing as one of the country's biggest challenges.

It's also one of the few issues that has sparked protests against his rule, demonstrations that have remained small but grown in number over the last three months.

Dos Santos promised in August last year to pour $50 billion into building one million new homes, reviving a promise made during 2008 parliamentary elections when his Popular Movement for the Liberation of Angola (MPLA) won a sweeping majority.

But the plan fell behind schedule when the 2008 global financial crisis sent oil prices tumbling, making a mess of Angola's budget planning.

In 2010 the government admitted it had fallen $9 billion behind in payments to foreign construction firms working on a raft of post-war reconstruction projects.

The International Monetary Fund stepped in with a $1.4 billion loan and Angola tightened its belt. Oil prices went back up and the IMF said in February that about half of Angola's arrears have been cleared.

So the government is back to trumpeting its social developments, especially with elections due next year.

Kilamba Kiaxi is one of seven "new cities" being built around the country. The others are smaller, with a collective total of about 45,000 homes being built, mostly around Luanda.

Strategically, housing complexes are also being built in the restive provinces of Cabinda and Lunda Norte, where residents are clamouring for a greater share of the local oil and diamond wealth -- Angola's main sources of income.

Another 100,000 homes are being built under a separate real estate development scheme, according to engineers at Kilamba Kiaxi.

That's still far short of the one million mark, and glaring problems remain: there's little transport to get from the homes in the new city to the jobs in the old one.

Government has yet to announce how the apartments will be priced or how home loans will be awarded.

And many Angolans are suspicious of Chinese construction after a hospital built by the China Overseas Engineering Group Company (COVEC) had to be evacuated last year because of deep cracks in the paediatric ward.

But the construction here shows the extent of Angola's ambition.

"Even in China, I didn't see such a big, large-scale project," said Wu Zhixin, chief engineer for CITIC, the contractor on Kilamba Kiaxi.

"In China, 500,000 square metres would be a big project. This one is 3.3 million square metres."

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