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Government chewing a sandwich for 13 years

Updated on February 12, 2018

Real estate, especially while urbanizing, can be a risky business. The chances of a loss greatly outweigh the probability of a profit. As dealing with such a large amount of capital, an agency faces problems in management of operations and resources exponentially more than advertising or sales, as housing and shelter is a basic need. Rather, these projects must be meticulously planned and have severely organized monitoring controls during operations as a single barrier may lead to an extension in time which would lead to an increase in costs which would require the customers to pay more dues than were expected. Hence most of any well-prepared project’s time is dedicated to planning with the rest dedicated to operations.

This analysis is based on the housing schemes currently functioning in the Sub Sectors G-14/1, 2 and 3 situated in Islamabad Pakistan, their development status and what measures are being taken to ensure their completion. The housing scheme had initiated in early 2005 with sale of plots and development to have concluded by 2007, however the project is still underway with little to show for. The biggest issue pertaining to the housing scheme is the negligence shown on part of the Foundation. The Foundation planned to insource development of housing and infrastructures, an operation usually taken by the Capital Development Authority (CDA). The Foundation was on its own primarily responsible for advertising and selling of land, by taking up development, they were under funded and lacked the proper expertise to complete the housing scheme and hence prolonged it for more than a decade.

Background

The 14-year hiatus of development of sector G-14 under the Federal Government Housing Foundation (FGHF), has been triggering ire and resentment among the allotters. According to the research, the allottees have complained that the possession of the plots, allotted in 2004, have not been handed over and development has been off again since the project was started. Even the structures previously present in the sub-sectors at the time of purchasing the land have not been cleared especially in street 79 and 80 of G-14/2. Few key candidates have been awarded the certificates of procession of their respective plots but even they have not been allowed to construct their homes.

The FGEHF authorities are of the view that the process of taking over the possession in the areas where compensation has not yet been paid is incomplete. The candidates have appealed to the Prime Minister, Shahid Khaqan Abbasi, and the Minister for Housing, Akram Khan Durrani, to issue directives to the concerned authorities for continuing development and completing works as early as possible. Multiple candidates in need of immediate cash have sold off their plots to the independent parties or private investors.

In Sub-Sector G-14/1, the Director General, Mian Talaat Rasheed, had assured the study of the survey of Built up Property (BuP) would commence and be accomplished within the month of September 2012. However, in some areas of Sub-Sector G-14/1, access was not being granted to survey teams by the residents of the area, therefore, information for assessment of BuPs had been attained through Geographical Information Systems (GIS) technology. To any query the Foundation had officially stated that the survey was still ongoing in the Sub-Sector. Due to resistance from local inhabitants, the survey was completed utilizing GIS technology and the survey had been forwarded to LAC for the announcement of the BuPs. After paying the affectees, the area will be vacated. As the sub-Sector G-14/1 is densely occupied, therefore considerable time would be required for vacation and subsequent development. However, tender for a consultant for designing/estimation/execution has been called.

In Sub-Sector G-14/2, the survey of BuPs had been completed as the residents had soften their stand on seeing machinery moving in G-14/2. Initially the development of infrastructure and housing was to commence by the completion of the survey of BuPs, however no such action had been taken. The Minister for Housing and Works had stated that in September 2012, upon completion of the survey, the development work had been handed over to the M/S NCL with the approval of Executive Committee / Board of Directors of Housing Foundation. The Minister also stated that the said NCL did not carry out the development work despite laps of considerable time. Consequently, the same was handed over to M/S ASCO with the approval of Executive Committee/Board of Directors of Housing Foundation who is presently working at site. Initially, 29 percent of the area in Sub-Sector G-14/2 was handed over to M/S ASCO for development work. Later, further 56 percent of the vacant area in Sub-Sector G-14/2 had also been handed over to M/S ASCO. He said that land acquisition process of Sector G-14/2 Islamabad is in progress. In November 2017, an official of the Foundation stated that on receiving support from Islamabad property Administration and after the affectees had assured their full cooperation, the development work in sub-sectors G-14/2, where CDA had been transferred the ownership of residential plots, is set to commence in full swing. “We have already mobilised some machinery in Sector G-14/2 for ground levelling, but now the development activity will start as per plan,” the Director General stated.

In Sub-Sector G-14/3, most of the land has been cleared The FGEHF is likely to start development work in a couple of months to give possession of alternative plots to the affected people of Sector G-14. The Foundations Director General, when contacted, told us that the Foundation had asked its consultant to complete designing of Sector G-14/3 and it was hoped that it would be completed in one month.

The Federal Government Employees Housing Foundation (FGEHF) so far has handed over the possession of 693 allottees in Sub-Sector G-14/2 and 3 sectors. “The foundation has handed over the possession of 380 allottees in November 2016 and 313 allottees in March 2017,” sources in the Ministry of Housing and Works had claimed. The development of the two sub-sectors, G-14/2 and 3, is on-going and the candidates who have cleared their dues as well as paid all the development charges are being given possession of the plots in these.

The Foundation’s Plan

The foundation intends to hold a commercial auction by mid-June 2018, the commercial plots will have a minimum price ranging from Rs. 22 Lakh to 2.82 Crore but, plots will be sold based on highest bid. The revenue generated by the auction and installments obtained for development will provide sufficient funds for the foundation to begin development on not only the commercial region, but the residential infrastructure as well, specifically Sub – Sector G-14/2 and 3. Development will commence based on the profit of the auction, but the Foundation is definitive on breaking ground as early as September 2018. The Foundation will only provide construction for members who have given all the required installments. Members lagging in their payments will not be able to avail the foundation’s services.

Recommendation

Even though the sub-sectors G-14/2 and 3 may show sign of clearance and decrease in encroachment, the project has still been in rotation for the past 14 years, with the Foundation managing it constantly reassuring its candidates that everything is fine if they pay their regular installments. The Foundation can’t even handover the housing scheme entirely to its more productive shoulder, CDA, as a transfer of management now would cause sufficient losses not only for the agency but for the registered members as well. Hence, I strongly believe the course of action the Foundation is currently taking is the best. But, the members having plots in these sub-sectors should immediately sell them at a higher price as soon as the commercial auction has been held and the business increase the value of the land. A candidate may be tempted to stay alongside this Foundation solely based on the large investment placed, but even if the development is to commence and housing is to be completed; the entire sector will still lack proper sewerage, storm and water drainage, water supply laying of sub-base and base on road along with earth work in plots.

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