April 30, 2006	Sunday	Rabi-us-Sani 1, 1427

KARACHI, April: 29: Land mafia, developers and builders have submitted hundreds of forms to participate in the second phase of the Taiser Town scheme launched for low income people.

Though it has been initiated for low-income people but there was no restriction to stop vested interests from participating in the scheme.

The scheme launched by the Malir Development Authority was targetting low income people but according to people involved in the exercise a big number of speculators, land developers and builders were active at the stage of form submission.

They acquired hundreds of national identity cards of the poor on rent and managed to submit the forms.

“The amount involved in the second phase was much higher than the first scheme which prevented thousands to participate,” said Irfan, an electrician, who succeeded in submitting his application with hope that he would get the land. He said that most of his relatives were not able to set aside Rs15,500 to take part in the scheme, which is offering 125-yard plots.

It was also noted that many people borrowed money at high interest rates with the intention to sell the receipt at a premium if they succeeded in securing a plot after balloting.

“The price is attractive. If my name comes on the balloting list, I will sell the receipt for Rs40,000 to Rs50,000, which means a profit of Rs30,000 to Rs35000 after returning the borrowed money,” said Saleem, who did not disclose his job.

However, the record-breaking Taiser Town housing scheme attracted 20-25 per cent less investors in the second phase but the inflow of money was much more than the first phase.

The long queues for the submission of forms for second phase continued till the end of banking hours on last day on Saturday.

The deadline for submitting forms was extended by 10 days in the wake of public rush but the rush remained high even during the extended period.

A senior official of Allied Bank estimated that the forms were less in number while comparing to the previous scheme for 80-yard plots.

“At this stage we can only estimate that the total forms submitted for the scheme would be around 300,000,” said the bank official who did not want to be identified. In the first phase of the scheme about 400,000 forms were submitted for 34,000 plots.

First part of Taiser Town scheme attracted unexpectedly high number of investors which prompted the city government to earn money through the scheme. The idea for making money was materialised by increasing the form price from to Rs500 from Rs100 in the first phase.

The price of form is non-refundable which means 300,000 forms would bring Rs150 million for the city government just for nothing. And the people would pay the cost of their will to acquire a land for building a home.

About 400,000 forms were submitted at the price of Rs100 per form for the first phase of the scheme which also yielded a total amount of Rs40 million for the city government.

The ABL which is dealing the whole scheme did not disclose that how much fee it would charge for handling such a huge turnover of the forms.

However, even if the ABL does not charge fee it would earn millions by using the money for short term lending.

The 300,000 forms brought Rs4.500 billion into the bank and the refund would be made after the balloting. So far no date for balloting has been announced.

In the first scheme the balloting was conduced after three and half months and the money remained with the bank. After balloting the procedure of return of deposited money is equally painful for the people. The money remains with the bank for several months as the pace of withdrawal is much slower than rate of deposits.

“All most all banks are short of liquidity. This huge amount which came for the scheme would give edge to the ABL and it would earn millions through short term lending,” said Asim, an analyst.

All banks have been facing acute shortage of liquidity for more than a month in the result of tight monetary policy of the State Bank. The banks either approach the discount window of the SBP to meet the day-to-day liquidity requirement or they borrow from other banks usually for 3 to 5 days.

“Under this situation the huge inflows of Rs4.500 billion is a gift for the bank,” said the analyst.

The city government has decided to handover the plots within five years.