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Prime Minister's 'Mera Ghar' scheme

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People recall Apni Basti and Islamabad New City schemes and fear same fate in new project

From Shamim Ahmed Rizvi, Islamabad
Sep 13 - 19, 1999

Serious doubts are being expressed from different quarters on the rationale, and economic viability of the ambitious "Mera Ghar Scheme". It alleged that the biggest development scheme ever launched in Pakistan in the public sector involving an expenditure of Rs. 400 billion in 3 years, has not undergone through any channel of official scrutiny. It was not referred to the planning commission nor routed through the Central Development Working Party or the ECNEC, responsible to approve such projects. It was not even submitted to the Cabinet. The Finance Minister, only made a passing reference to the housing project in his budget speech that too in relation to tax exemptions and relaxation extended to the housing industry. It is thus evident that nobody except Senator Saif-ur-Rehman, and the Prime Minister, knew its contours and the criteria on the basis of which it was selected as ‘the project' for revival of economy.

Prime Minister's Housing Scheme, "Mera Ghar" reminds the mega project of New Islamabad City, launched in 1996 by Benazir government and "Apni Basti" scheme by Junejo government in 1987—the two ambitious programmes which went away with huge public money going down the drain.

Under this scheme the government proposes the construction of over 500,000 houses for low income groups over the next three years at a cost of Rs. 64 billion on 20,000 acres of state land. Initially pilot projects are to be launched on 17 sites in major cities namely Karachi, Lahore, Islamabad, Peshawar, Rawalpindi, Multan, Sukkur, Quetta and Hyderabad for the construction of 19,000 small housing units on state land costing Rs. 14.5 billion. For this purpose a new organization known as Prime Minister Housing Authority, under the Chairmanship of Ehtesab Bureau Chief, Senator Saifur Rehman, has been created. The authority with its headoffice in Islamabad has hired the services of experts from private sector besides a large secretariat staff on high salaries as prevailing in the private sector. Wasim Afzal, a director general in the Ehtesab Bureau in grade 20 and a confidant of Senator Saifur Rehman who has been appointed as Chief Executive of the authority has been reportedly given over 400 per cent jump in basic emolument while under the rules he is entitled for only 20 per cent deputation pay.

A similar authority at the federal level known as National Housing Authority, (NHA) with almost similar objectives and terms of reference is already existing. This authority had prepared a national action plan to meet the acute shortage of housing units. The plan of action was duly approved by the Prime Minister Nawaz Sharif in his first tenure in 1992. With the change of government of Nawaz Sharif the committed funds were not released. The Government of Benazir Bhutto asked the NHA to carry out its programme in partnership with private sector and as a result of which the NHA, in collaboration with CDA and some private investors including a construction company of Singapore, launched the Islamabad New City project with a big fanfare. The NHA collected over Rs. 300 million from public — poor, needy and shelterless people most of them government servants — as first installment against promise of plot allotment. The project fell victim of politics, the main Pakistani partner was arrested and the D.G. National Housing Authority was put under suspension and an inquiry was ordered by the caretaker Prime Minister Meraj Khalid in 1997. It was still going on when Nawaz Sharif took over and the inquiry was assigned to Ehtesab Bureau. The inquiry (which was assigned to same Director General who has now been made Chief Executive of the PM housing authority) is perhaps still continuing. The D.G. NHA is still under suspension and hundreds of staff members of NHA are receiving their salaries for the last over two years for no work and thousands of those who had paid millions of their hard earned money to the National Housing Authority are running from pillar to post to get a plot or refund of their deposited money.

Earlier, a similar programme which had gone away altogether was launched under the name of Apni Basti by Mohammad Khan Junejo as Prime Minister in 1987 to build 150,000 housing units, but that eventually resulted in the construction of only 35,000 houses only. The scheme had too many flaws, including unrealistic pricing, and building them in places where there was no provision for water, power and gas. Eventually, people took away the door and window frames of the houses as well as the bricks.

The need for a large housing scheme is not disputed in a country where over 7 million more proper housing units are needed. But can the new scheme with senator Saifur Rehman spearheading avoid many of the pitfalls of the scheme of 1987 in which Rs. 1.220 million went down the drain, as now lamented by the Public Account Committee of the National Assembly. One, however, fails to understand why an altogether new organization has been created in the presence of the National Housing Authority (NHA) for the same objectives where hundreds of highly paid workers are sitting idle and receiving their salaries without any work. Instead of creating new authority, the control of National Housing could be handed over to senator Saifur Rehman for carrying out his new assignment. It would have been a source of relief to those unfortunate thousands who have been bitten by N.H.A. Specially in view of the fact that Senator Saifur Rehman who supervised the inquiry into the scandal of ‘New Islamabad City" under NHA had assured the investors in this scheme that they would either get their money back or get the plot promised. For the success of the new scheme started in the name of Prime Minister, it is of vital importance that the confidence of the general public is restored.

Housing and the provision of Housing structures for the people of Pakistan is, no doubt, a big challenge. The population growth in Pakistan being estimated at 2.6 per cent per annum, the annual demand for houses is officially projected at about 580,000 units. Against this, the annual production of houses has been estimated at 430,000 units, leaving an annual shortfall of 150,000 houses. The backlog is estimated at 6.5 million houses.

Under the Mera Ghar scheme the houses will be constructed on state land to be provided free of cost. The Prime Minister's Housing Authority (PMHA) has "identified and selected" 5,377.9 acres of land all over the country for the scheme. A number of government departments and civic agencies, which own these lands at 114 sites, have been told to initiate the process for transfer of the titles of these lands free of cost to the PMHA. Almost 40 per cent of the lands "identified and selected" is owned by the Pakistan Railways. According to PR officials, considerable part of its land is already being used for various agendas while the rest was earmarked for expansion and development of railways facilities. Lot of criticism has already appeared in the national press grabbing of priced and expensive land under pressure of the Ehtesab Bureau.

It these houses are to be constructed on land acquired free of charge, the tentative prices indicated, (in the newspaper supplements released on the occasion of the launching ceremony) for various category of apartment/houses are grossly on the high side.

Tentative cost estimate

Category Area Sq. Ft. Cost to buyer(approx.) Rs.

F. 250 100,000

E. 450 400,000

D. 700 600,000

C. 800 700,000

B. 1200 1,100,000

A. 1500 1,500,000

The prevailing cost of construction of a middle standard ranges between Rs. 450 to 500 sq ft in case of single story independent house & Rs. 350 to 400 sq ft in case of multistory apartment. Charging Rs. 1500,000 for a covered area of 1500 sq ft (land is free of cost) is almost double the market rates. This can be the justified only if the authority is planning to provide super class construction standard for the so called low cost housing for poor and lower middle class income group whose monthly income ranges between Rs. 3000 to Rs. 15000 per month. Such doubts about pricing mechanism must be clarified because any impression of wrong doing at any level is bound to bring the whole project into disrepute and ruin its prospects.

Calculated on the basis of the cost of construction of the covered area, the estimated cost of 1500,000 of a 2 bed room house with total covered area of 1500 sq ft is grossly on the high side leaving a margin of about 6 to 7 lacs for each unit, but it would be still cheaper for the purchasers (specially in case of independent Houses described as 200 yards row houses in the publicly companies) as they would be paying nothing towards the cost of land. In Islamabad the cost of land in the area where these houses are proposed to be built up ranges in the open market between Rs. 30 to 35 lacs per 500 square yards.

Another point leading to misgivings about this project is the arbitrary and legally questionable way in which PMHA is grabbing the prized land owned by various organizations and civic bodies. In Karachi alone they are said to have taken possession of land from Pakistan Railways and PIA Shavers and are eyeing the area to be vacated by the Sabzi Mandi near the Karachi Central Jail. Another 30-acre plot adjacent to the Safari Park, which was originally allotted to the Horticultural Society of Pakistan for developing a botanical garden there, is said to have been vacated for the PMHA to set up yet another low-cost housing project there. The society is already in litigation with a Karachi Land Maphia group who, with the blessing of Asif Zardari and in connivance of then Sindh Chief Minister Abdullah Shah tried to take possession of this land by force. Is this method of acquiring land is legally tenable? This question become all the more important in view of the fact that PMHA has no legal entity so far as it has been created by an executive order of the Prime Minister. Forcing the various bodies and organizations to transfer their expensive lands, to the authority free of charge can easily be challenged in a court of law.

Another problem which comes to mind in this regard is the serious inadequacy of civic amenities like water, power, gas and the sewerage and waste disposal systems in most of our urban centers. Have the planners of PMHA given due consideration to this aspect of matter? In Lahore, the area around Ravi is crumbling and if something is not done quickly to stop the rot then the city, including the new roads and highways that are being built, would turn into a massive garbage heap. The 35,000 houses that are to be built there in the next 12 months would be in the midst of squalid surroundings. In Karachi hundreds of flats are lying vacant because they cannot get water, gas and power connections. Even taking note of the fact that in the next two years there would be as much as 3000 MW of surplus power, the benefit may remain elusive in the absence of steps to lay down the costly infrastructure for its transmission and distribution. Besides, water shortage in Karachi is acute and widespread and the addition of 40,000 houses in the next 12 months is bound to make this station much worse.

Another matter which comes to mind is the timing of the launching of the scheme. From the purely economic perspective, it seems as if we are trying to put the cart before the horse. The housing industry all over the world has followed an economic boom and not the other way about. Even in Malaysia whose model we have chosen, housing project were taken in hand when the economy in that country was on the upswing. In recessionary situations the first to be hit is housing.