September 21, 2003	Sunday	Rajab 23, 1424

KARACHI, Sept 20: In the year 2000, the allotment of Sindh Board of Revenue lands over a period of 15 years by civilian governments, between 1985 and 2000, were frozen because the military officials reckoned that these were sold at below the prevailing market price.

Though the main beneficiaries were estate developers, they also included a few industrialists with plans to expand their manufacturing facilities. Many had bought these lands at market price from the original allotees.

After a lot of hassle, the Sindh government agreed that the Board of Revenue (BoR) should regularize the allotments on payment of penalty i.e. the difference between the original price and the market price, as determined by the BoR. It was BoR which had earlier fixed the original price.

To enforce this policy, an ordinance was issued by the Sindh government in 2001. Later, a few challans were also issued and payments were made by the builders, says chairman of the Association of Builders and Developers (ABAD) Hafeez-ur-Rehman Butt.

No sooner, the builders started paying the penalty to get the officially under-valued land regularized. The National Accountability Bureau (NAB) intervened. The process of regularization came to an abrupt halt. It was decided that NAB approval was required to re-open “compensation” cases of under-valued lands.

Finally, it was decided that 2001 ordinance was not enough and NAB would make rules and submit them to the Sindh government. Now, Butt says, the rules are awaiting approval of the provincial cabinet.

Last week, the governor of Sindh promised to expedite regularization of BoR lands. Hafiz- ur- Rehman Butt says that at stake are 1400 cases that, he reckons, could bring Sindh government Rs5 billion in penalties.

About 15-20 per cent of the cases relate to housing projects in various stages of execution, in which individual allotees have invested a lot of money. Similarly, in completed projects, allotees cannot sell their apartments because the land has not been regularized. Their investment is stuck up. A committee has been set up to look into these cases. The issue of regularization has so far defied solution despite repeated interventions of finance minister Shaukat Aziz and State Bank governor Dr Ishrat Husain. Banks are awash with liquidity, and housing could provide a major source of revenue for financing. The State Bank is encouraging banks to provide mortgage loans and the finance ministry has extended tax incentives for housing investments by individuals. But there are major snags in an integrated approach towards housing development.

Builders complain of other irritants in development of housing industry, whether it is provision of electricity, water, sewerage lines or building plan approval. Electricity connection is major problem. It takes years to get electricity connection for under-construction apartments and KESC policies are subject to frequent changes, says a builder who has not been able to get power for his apartments completed about six months ago because of drastic change in consumption assessment criteria.

The Karachi Water and Sewerage Board is no exception. The outer development of projects such as laying of sewerage/drainage pipelines and water supply have not been taken up in housing schemes in KDA Scheme 33. The performance of other agencies responsible for provision of roads, electricity and other infrastructure facilities is no different.

Unless these snags are removed, official policies to encourage housing industry cannot succeed, say builders.