Daily Times

KARACHI: Prime Minister (PM) Imran Khan met a delegation of Association of Builders and Developers of Pakistan (ABAD) and assured them that a new housing ministry would be formed to facilitate private sector builders and developers.

The ABAD delegation presented its proposals to the PM during the meeting. ABAD members proposed that a single window operation be set up to deal with bottlenecks including poor urban planning, absence of secondary mortgage market, high transaction costs of properties, unorganized real estate sector, inadequate property development framework, insufficient long term funding arrangement and lack of policy for regularization of important industries including cement, steel and tiles to facilitate the builders.

ABAD members further said that ABAD had already requested the government to facilitate low cost housing schemes. “We will not ask government for any relaxation or land because land will be purchased by builders belonging to ABAD. We just want a clear and vibrant housing policy which caters to the provision of utilities including gas, electricity, water and a planned sewage system from the government,” explained the ABAD delegation.

The ABAD delegation informed the PM that they had come up with a plan to provide low cost housing to people as a part of their corporate social responsibility (CSR) initiative.

During the briefing, ABAD representatives told PM Khan that the estimated cost of a 5 marla home with two bedrooms, two bathrooms, a kitchen and a veranda was Rs2.1 million (mn). They said that the computed cost included the cost of construction, infrastructure and land.

They further informed PM Khan that 25 percent of total price will be paid by purchaser in a time period spanning over 2 years while the remaining 75 percent amount of price will be financed by House Building Finance Company (HBFC) or any other financial institution on easy and affordable terms. They told Imran Khan that about six percent per annum interest rate had been proposed for end users. They said that if the base rate was reduced, the interest would be reduced too.

They told the PM that depending on the availability of land and funds, ABAD was planning on constructing at least 5000 housing units. They said that at most, ABAD would construct 10,000 low cost housing units.

ABAD representatives also told the meeting that the State Bank of Pakistan (SBP) and World Bank (WB) had confirmed recently that housing shortage in Pakistan had reached to 12 mn housing units and according to a conservative estimate almost 0.25 mn housing units were added to this shortfall every year.

They informed the PM that private builders and developers, most of whom were affiliated with ABAD, were constructing 0.15 mn housing units every year against a demand of 0.4 mn housing units. “Thus, Pakistan needs 12 million housing units to be built to overcome shortage of houses,” said ABAD representatives.

ABAD representatives told the PM that Pakistan had a huge potential for house building. They said that the construction of residential units could attract an investment of almost $223 billion (bn). ABAD members said that the country’s economy would benefit and employment opportunities could be generated through the housing sector.

They further informed the PM that keeping in view resources and manpower available in the country, overcoming the present housing shortage could take almost ten years.

Housing sector is contributing more than 2 percent to GDP by creating thousands of jobs and supporting more than 70 allied industries manufacturing construction raw material. According to official data, more than 45 percent of total population of Pakistan is living in urban centres including Karachi, Lahore, Peshawar, Islamabad, Faisalabad and more than 50 percent of urban population is living in katchi abadis.

These abadis have created many socio-economic problems because such shanty slums are not provided with basic amenities. These abadis rely on certain mafia groups for the provision of basic utilities. The operations of these mafias have led to the government and utility agencies suffering massive revenue losses. Some katchi abadis have become safe havens for criminals because security agencies have no access to these unplanned slums.

The meeting was attended by ABAD Chairman Arif Jeewa, ABAD Vice Chairman Hasan Bukhshi and former ABAD chairman Mohsin Sheikhani. Federal Finance Minister Asad Umer and other relevant officials were also present during the meeting.

Published in Daily Times, September 2^nd 2018.