KARACHI: Land auction process open to manipulation
By Bahzad Alam Khan
KARACHI, Aug 5: The city government has made the process of auction of land so complicated and open to abuse that genuine buyers stay away from it, leaving the field clear for brokers and real estate speculators.
The district officer of the city government’s cooperative housing department, Najamuddin Sikandar, who formerly held charge of the land department, told Dawn that even if a genuine buyer succeeded in buying a piece of land in auction, he could not overcome the bureaucratic obstacles that subsequently came his way.
“Moving a file from one desk to another requires a lot of palm-greasing in the city government. Only real estate agents or brokers know how to do this,” he said.
Auction of land is a major source of revenue for the city government.
According to the district officer of the city government’s recovery department, Irfan Naqvi, the city government auctioned off 500 plots and received Rs1 billion in bid money the previous year. He added that the city government sold plots in Baldia, Lines Area, Landhi Industrial Area, Korangi and Surjani.
Mr Naqvi explained that a bidder had to pay a certain amount of money as security deposit. “The highest bidder deposits 25 per cent of the total bid money at the fall of hammer. If his bid is accepted by the auction committee of the city government, he pays 25 per cent of the total bid money within 15 days of the issuance of the letter of acceptance. He has to pay the remaining 50 per cent within 45 days,” he said.
Mr Sikandar said that another reason why genuine buyers are forced to stay away from the auction process was that actual development of the land started very late, in most cases at least 10 years after the auction.
His view was supported by Babar Mirza Chughtai, chairman of the Association of Builders and Developers, who said construction of houses and other buildings could not begin until essential infrastructure was in place. He added that the city government’s works and services department was responsible for the delay in the development of infrastructure. “As a result, speculators continue to manipulate or raise real estate prices artificially,” he said.
But the executive district officer of the city government’s works and services department, Sarfaraz Ali Shah, said the delay was chiefly caused by the Karachi Water and Sewage Board, which took a very long time putting in place essential infrastructure, a prerequisite for the development of a locality.
The managing director of the Karachi Water and Sewage Board, Brig Iftikhar Haider, said the amount of time taken by the KWSB was in proportion with the workload. “If a project is as big as Scheme 33, it would take years to develop. But if the size of a project is small, it is developed soon,” he said, adding that the KWSB nearly always met project deadlines.
Brig Haider refused to comment on Mr Shah’s remarks about the poor performance of the KWSB.
