ISLAMABAD, Dec 29: Minister for Housing and Works Rehmatullah Kakar on Monday informed a Senate body that the much-pulicised contract for construction of one million houses under the Prime Minister Housing Programme has not yet been awarded to the UK-based company.

The minister told the Senate Standing Committee on Housing and Works, which held its meeting at the Parliament House under the chairmanship of Senator Dr Muhammad Ali Brohi, that the matter was still under process and each and every aspect of its being looked into carefully.

The committee was told that not a single penny would be spent on the project from the public exchequer as this would be executed under public-private partnership basis. The minister said his ministry would continue to seek guidance and support from the Senate committee in this regard.

The committee directed the housing ministry to ensure highest degree of transparency and safeguarding of the country’s as well as public interest. While extending its full support to the government’s scheme for provision of housing to the poor and middle income people, the committee observed that since the project of this magnitude was not undertaken earlier, it was necessary to keep this under parliamentary oversight to avoid all sorts of delays and shortcomings which plagued such projects in the past. A number of the members expressed the view that open bidding must be held before awarding the contract.

Earlier, secretary to the housing ministry informed the committee that the advertisement was published in all leading newspapers and 50 firms responded to it. It will be a joint venture project, he said, adding that 14 firms signed basic MoUs, which included reputed firms from Germany, US, UK, Spain, China and Malaysia.

“We have the services of core financial, legal and technical advisors and moving under the direction given to us by the steering committee of the project,” he said.

Proposals of the British company, IHL, were forwarded to the ministries of law and finance for the evaluation but the agreement is not finalised yet, he said. “Since the IHL responded first, it was natural to evaluate its proposals,” he added.

Construction of 30,000 housing units would be undertaken within 2 years and the project would be completed in 10 phases. Initially, the project consisting of 2,840 units will be taken in phase-I along Defence Road, Lahore.

Officials of the ministry submitted that attempts to scandalise the things in the media would serve only to scare away foreign investors and the public at large would suffer since there was a shortfall of nearly 7.4 million houses in the country.

An official associated with the project apprised the meeting of the salient features of the housing programme. He said it was a non-PSDP project to be executed under public-private partnership. The IHL, he said, has a diversified portfolio and shoe-making is one of its expertises. However, the firm has prior experience of constructing houses in countries like UK.

“It is commendable that reputed firms are willing to undertake the project and make investment on four to six per cent profit,” the official said.

Representative of the finance ministry informed the meeting that the agreement was signed between the Pakistan Housing Authority and IHL and the IHL was shown to be registered in Lahore (therefore, not foreign) and it was to provide 100 per cent equity for the project and had already purchased land in Lahore.

Sovereign guarantees are not involved in the project as there is no component of foreign loans, he said, adding that the ministry was asked to provide Rs6 billion guarantee but it was not forthcoming as the PHA has no risk and apparently it would be a construction-sale agreement.

The final decision with regard to sovereign guarantees lies with the Economic Coordination Comittee, he added.

The meeting was attended, among others, by Senators Hafiz Abdul Malik Qadri, Shuja-ul-Mulk, Bibi Yasmeen Shah, Dr Abdul Khaliq Pirzada, Sardar Mohammad Jamal Khan Leghari, Sardar Mehmud Khan, Mir Mohabbat Khan Marri, Nisar A. Memon, Amjad Abbas, Syed Muhammad Hussain and Muhammad Saleh Shah.