KARACHI, Sept 5: The World Bank wants the Sindh Excise and Taxation Department be given the responsibility of handling the land titles as a “single integrated department” for administering urban land. For this, it wants the department be given a mandate by law, financial resources and training to the officials and staff.
In a recent report, the bank has suggested to declare benami transactions unlawful and to raise and uniformly implement the land non-utilization fee. While the empowerment of the department is a long-term goal, the bank suggests making ownership record public immediately to invite corrections and that all future land transactions be done through registered documents only. For this, it recommends computerization of all property documents. Another suggestion is to lower stamp duty rate to encourage registration of transaction documents.
“It is widely believed that lack of affordable land to expand the business is the main constraint to accelerate growth in Karachi”, the bank notes in the report based on interaction of its consultants with a large number of stakeholders. “Our analysis shows that the most formidable constraint to the efficient functioning of land markets is failure of the land management system in establishing ownership in urban properties,” the report states.
Therefore, the report urges to establish a centralized land registry system in the form of a central register of land title for which it strongly advocates the department to be given this responsibility. A cost-effective, reliable and an improved administrative mechanism for recording and transferring ownership or rights in urban land will facilitate the functioning of land markets and lower the cost of transactions in property.
These recommendations have come at a time when the business leaders, the politicians and the bureaucrats appear to be sharing for the first time a common objective of accelerating the pace of industrialization to cope with the growing unemployment. But they seem to be handicapped by control of as much as 25 to 30 per cent of the plots in the established industrial estates with the powerful speculators.
The Sindh government is now taking steps to effectively curb the speculative trading of industrial plots and to ensure that genuine industrial investors get land for their projects at low price and on easy terms.
SITE Association of Industry (SAI) chairman Mirza Ikhtiar Baig has demanded the abolition of ordinance that stipulates auction of land at market price. “Industrialists will not purchase land at the market rate for setting up their units, they should be offered plots at cheap rate and on deferred payment basis,” Baig asserts.
In response, an elaborate and transparent system for allocation of industrial plots has been worked out by the bureaucrats of the Sindh government and has been submitted to the chief minister for his approval.
Under an eight-point scheme, the industrial investor would be asked to pay up front 25 per cent of the price of allotted industrial land while the remaining amount would be paid in 10 years in fixed annual instalments.
But with this concession, the investor will have to ensure commissioning of small-scale project within a year, a medium industry in 18 months and a big industrial project in 30 months.
A binding clause of the land purchase agreement stipulates the punitive measures according to which if the investor failed to maintain the installation and commissioning of the small, medium and big industrial project within the prescribed time schedule, the entire amount paid for the industrial plot would be confiscated and allotment of the plot would be cancelled and would be given to other investor.
There are, however, built-in provisions to provide safeguards to the investor in case of delay in observing time schedule for the installation of machines and commissioning for genuine reasons. A grace period up to one year may be allowed with joint approval of the authority of the industrial estate and the trade association of the area. The defaulting investor would be asked to pay a 10 per cent non-utilization fee.
Accelerating the pace of industrialization in face of growing unemployment in the province have been dominating theme of the discussions that President Musharraf and Prime Minister Shaukat Aziz had in Karachi with the businessmen, political leaders and the bureaucrats during their visits to this province.
