PESHAWAR: Abrupt amendments to the Khyber Pakhtunkhwa Local Government Act, 2013, allows private land developers for launching housing schemes and receive membership fees from general public even before getting a no objection certificate in this regard from the relevant quarters for launching a scheme.

The amendment was hurriedly tabled before the provincial legislature on Tuesday and passed by house the same day without debate that raises many eyebrows.

The provincial cabinet had approved the bill last week.

An interesting provision in the amended act is that every developer has to furnish a bank guarantee of Rs500 million in favour of the tehsil local government to issue membership to the people.

Some critics of the amendments believe that this provision is aimed at facilitating only few big land developers, who could afford depositing bank guarantees of such a huge amount.

Private land developers allowed to launch housing schemes without NOC

Section 23(b)(9) states that a private promoter and developer even before making an application for grant of NOC for establishing and developing a housing schemes may apply for permission to undertake a local consumer survey within territorial limits of any tehsil to undertake market research and analysis.

Section 23(b)(12) provides that the private promoter or developer can receive any amount on account of membership or registration free from the consumer respondents of the survey to determine their seriousness in furtherance of his market analysis through the market survey.

However, he shall be liable to return such amount to the respondents within six months or adjust the same towards applications for allotment of such consumers in case he receives an NOC.

Former local government minister and MPA Inayatullah Khan on the floor of the house on Monday termed the amendments mala fide and entity-specific.

He said the amendments were extraordinary and they would give a free hand to private land developers to exploit people.

“The motive behind this amended act is to facilitate a property tycoon who had launched campaign on social media few months ago about launching housing scheme in Peshawar without mentioning exact location of the scheme prior the approval of Peshawar Development Authority,” he said.

The former minister said the PDA issued notice to the management of land developer which stated that under the relevant laws, advertising/launching of site development scheme as well as sale and purchase and allotment of plots in that scheme prior to the approval of layout plan or NOC by the competent forum was absolutely illegal and against the rules.

The PDA came under pressure and had to withdraw its notice within 24 hours.

“This amendment allows property tycoons to start sale and purchase of files without the approval of layout plan and obtaining prior approval from the competent authorities,” said Mr Inayatullah, who also submitted a notice to the assembly’s secretariat for the withdrawal of those amendments.

He pointed out that Section 2(b)(v-ii)to2(b)(v-ii)(vi) were actually providing sneak doors to all kinds of people to sell property that they did not own.

The lawmaker said Section 2(b)(v-ii)(vi) was hilarious in this respect as it nullified any semblance of buyer protection.

Apparently, in Section 23(b), the power to approve or reject applications was given to the tehsil council but in reality, these powers had been concentrated in the hands of the chairman. The local council could either approve the application or raise objections.

The objections shall be sent to the builder. The builder will respond to the objections and send his reply to the chairman andnot the council. If the chairman is satisfied with the reply of the builder, he has the power to approve the application. The council’s role is therefore reduced to a rubber stamp.

Mr Inayatullah said Section 23B(9) to 23B(12) opened avenues for the ‘file’ business in the name of survey forms.

He recalled that affected clients of the DHA Valley, Bahria Town, Fazaia Karachi, DHA Lahore and numerous other housing schemes were lured into the ‘file’ business with such membership forms. There is no safeguard for general public, he added.

The MPA said the people of KP were relatively shielded until now from such frauds due to feeble but effective legal safeguards and the amended act would open the floodgates of fraud in the same manner that people of Karachi, Lahore and Rawalpindi have gone through.

Law minister Sultan Khan rejected apprehensions about the amendments to the act.

He said the outbreak of Covid-19 had adversely affected all sectors and the government made those amendments to create jobs.

The minister said the purpose of amendment was to give incentives to land developers as the housing sector would create jobs in the allied sectors.

Published in Dawn, July 15th, 2020