March 19, 2007	Monday	Safar 29, 1428

GOVERNMENT policies on land distribution have been criticised by politicians, environmentalists and economists who are not in favour of selling precious lands randomly and that too in a non-transparent manner. These transactions have come under attack because they do not conform with the environmental and planning criteria about land uses.

At present, many foreign investors are interested in development of cities including Karachi as the real estate sector is tagged with the most lucrative investment opportunity. But the land-based investments can only be useful within the framework of master plans and development priorities.

Urban and suburban lands are finite assets and cannot be treated as commodities. The distribution has to be carefully undertaken after assessing the local requirements. Urban lands are routinely meant for housing of low income groups, establishing manufacturing (and other enterprises), retail/wholesale centres, ware-housing, amenities, recreation centres and the like.

After a proper land use proposal is finalised through consultations, the same can be referred to potential investors. In other words, the prerogative of determining and finalising land sales must rest with the local institutions and no investor should be allowed to pick and choose sites. To dispel the possibilities of corruption, transactions must be subject to public scrutiny. The exercise for land-use choices must be done without delay as the pressure from investors is rising and the government finds the offers too attractive to ignore. The city lands are more than parcels of investments. They can be turned into a catalyst for various economic activities. The present investment trend seems to be stereotypical real estate options such as condominiums, shopping malls, amusement places, corporate buildings and hotels.

If these options exceed the actual demand, there is a substantial possibility that the property market may stagnate in the medium-term. As and when the bubble of speculation bursts, many real estate projects would be seen grappling with an overall slump due to an over supply.

Such a scenario can be averted through planning and corresponding financial packaging. The government may identify the areas where it requires private investment. Manufacturing, assemblage houses, strategic trading, amenity and social sector facilities are obvious sectors wherein opportunities abound. A package of financial incentives and physical facilities can create awareness of investment towards non-conventional domains also. Such an attempt will create diversity in the overall economic context, which is also sustainable in the long- run.

For making real estate development meaningful, supply of land has to be supported by corresponding infrastructural facilities. This happens to be a totally grey area. According to official records, the urbanised Karachi area is around 1800 sq km. Another 1000 sq km area is also considered to be a hot commodity. However, much of this area lacks any kind of threshold infrastructure. While the government is allotting land without any commitment regarding infrastructure provision or extension, it is obvious that the land parcels will hook onto the available services in one way or the other.

It is not possible for investors with different profiles to procure/construct water supply, electricity, sewerage networks / treatment systems, solid waste disposal mechanisms or access roads by themselves. Much of this infrastructure will have to be shared through the already burdened city sources and networks. If the government intends to create a worthwhile incentive, provisions of essential infrastructure and their judicious extension have to be planned before moving ahead.

While identifying areas where the real estate development has be facilitated as a policy, there should also be sensitive areas/locations where moratorium on all forms of development needs to be imposed. This is required to protect the precious city assets and to maintain equilibrium between environment and development.

Heritage sites, coastal fronts, amenity locations, national parks, conservation sites, highway fronts, land patches for facilitation / expansion of infrastructural services (such as railways), ecological repositories and strategically reserve lands must be saved. and must be used as a basic incentive for attracting an investment which should be not the end in itself.

Regulatory control over the development is a statutory responsibility of the city government. It is observed that due to hurriedly instituted anomalies, this mandate is compromised. The situation has reached a point where the president and the prime minister grant approvals to allotments and projects. In some cases, decisions are kept secret and only unveiled when deeds finalised and plans approved.

The federal authorities also stand outside the control and coordination of the CDGK. The resulting chaos gives ample opportunities to middle men and agents who distort the usual functioning of market mechanism. The case of Diamond City along Bundal Island is an example. The disagreement prevailing between the government of Sindh, Port Qasim Authority and concerned stakeholders clearly show the lack of transparency and violation of conventions. Land allotments are also affected by political bunglings. For example, the chief minister’ s secretariat announced a while ago that land transfers are not permitted as per the current policy. On the other hand, large tracts of land are earmarked for transfer and allotment to assorted stakeholders.

The government should focus on decentralisation of commercial activities away from the already congested neighbourhoods. After carefully conducted feasibilities new reserves of land can be opened. This approach can also help reduce regional disparities.