July 2 - 8, 20

It is time-tested global phenomenon that governments focus on construction industry mainly to create employment for unskilled or semi skilled workers, especially during recession. However, the successive governments in Pakistan have failed in understanding this. It is a harsh reality. It is enough to say that one housing finance company operating in the country just cannot meet the requirement of 200 million people.

While cost of construction has skyrocketed, double digit interest rate is also punitive. The result is proliferation of slums, devoid of basic amenities and also the safe sanctuaries for the militants and criminals.

The fact of life is that people living in rural areas face diminishing job opportunities because of mechanized farming. The government has been distributing land among landless farmers but limited availability of credit, high interest rate charged on agri credit and above all shortage of water results in dismal yields, not enough to feed all the mouths. Therefore, these people move to big cities in search of jobs and mostly get involved in construction activities. Some of them return to their hometowns but most of them getting taste of urban life settle in big cities.

In business, it is said 'producers are keen in manufacturing those products which enjoy demand' but observation is contrary in case of construction industry. The country faces shortfall of 10 million housing units but only a dismal number of units are constructed annually. This grim situation can be attributed to: 1) skyrocketing prices of houses, 2) limited credit facilities and 3) very high interest rate being charged on housing finance. On top of this, house building finance company limited (HBFCL) is not capable of catering to the needs of 200 million people. At present, it serves less than 100,000 clients.

It is true that cost of construction has gone too high, but it is mainly due to cost of land and other inputs. To overcome this, builders have started construction of multistory buildings, which require installation of elevators and standby generators. Though cost of operating these facilities are born by the occupants, the capital cost increases considerably. One of the ways to bring down cost of housing units is sale of land to the builders by the government. Horizontal growth helps in bringing down cost of construction but becomes a pain when adequate public transport facilities are not available.

Since construction of multistory buildings takes years, speed of work is dependent on payment by those who have booked the apartment or shop. It is a common complaint of builders that people don't make timely payment which hampers pace of construction and often results in overruns. However, those booking an apartment or shop contest this view. They say to attract initial booking builders keep the down payment and monthly installments low but soon start demanding additional money in the name of internal and external developmental charges, and payments to be made to utilities companies.

According to a few people contacted if the initial monthly installment is said to be Rs5,000, a person has to pay double the amount. Builders have different stories to tell that include speed money to be paid to different government departments and also the payments to the local mafias. As soon as the land grabbers get the news that work is about to start on a project, they become active and at times precious lives are lost during armed encounters. The litigation often leads to suspension of construction activities.

One could find hundreds of incomplete and/or abandoned building. In most of the cases, construction has been stopped by the building control authorities mainly because of violation of the approved plan. Some of the buildings have been partly demolished. In such cases, only those who have booked apartments/shops are the ultimate losers, as they never get their original amount back. Strange is the attitude of courts, which just issue interim orders, stop construction but final decision is not taken for years.

Two of the most glaring examples are Glass Tower and Gulf Way Shopping Mall in Clifton area. Another example is an incomplete building in the close proximity of five-star hotels and chief minister house in Karachi. Billions of rupees of banks are stuck in this building. Since the building cannot be demolished the appropriate decision will be to allow its completion with certain amendments. The basic reason for stopping construction of this building was its close proximity to 'PIDC Bridge;.

Some of the experts say that since the bridge has outlived its life, the time has come to rebuild it with clear instructions that no heavy traffic will be allowed on this route.

Two areas also need specific mention: 1) construction going in earthquake prone Gulistan-e-Jauhar and 2) reclaimed land on the seafront. After the 2005 earthquake, there was a lot of discussion on preparing separate building bylaws for this area. However, all those talks have fizzled out because Pakistanis have very short memories. Construction on reclaimed land needs special technology and separate bylaws. Since foreign construction companies are involved in some of the projects, it is assumed that superior quality has been maintained. However, special care of these buildings has to be taken after having witnessed gradual depletion of some of the buildings constructed on seafront.

It is also necessary to highlight quality of buildings being constructed in old areas (Kharadar, Garden, and Soldier Bazar). Buildings are not only being built too close but enough open space is also not left. In case of a fire breakout, it is almost impossible to take fire tenders close to various blocks. It is not possible to demolish those building constructed in violation of the rules but it is necessary to ensure no such violations are made in the future.