ABAD suggests significantly lower cost for 5m houses

Chairman says PM’s housing vision can be achieved at a cost of up to $50b

KARACHI: The prime minister’s vision of establishing five million low-cost houses can be achieved at a cost of $40 billion, which is nearly five times lower than the cost quoted by Imran Khan’s British friend and property tycoon Aneel Mussarat, says Association of Builders and Developers (ABAD) Chairman Hasan Bakshi.

Prime Minister Imran Khan is actively working on the project, which is one of the most important targets in his party’s election manifesto. Khan is gearing up to steer Pakistan’s beleaguered economy out of crisis through the construction industry, which will assist dozens of allied industries as well.

“We believe this five million houses scheme is achievable as well as fundable,” Bakshi told The Express Tribune on the sidelines of a press briefing on opportunities and challenges for the PM’s housing initiative.

“But all government departments and the nation have to align in order to achieve this ambitious goal. As a nation, we have always underperformed when comparing the performance with our capacity,” he added.

According to ABAD’s assessment, the target of constructing five million houses could be achieved at a cost of $40-50 billion, he said, adding that according to ABAD’s proposal, the price of a housing unit would not exceed Rs2.5 million.

However, British property tycoon Aneel Mussarat has estimated the price of a house at $100,000.



Bakshi suggested that a house could even be constructed on 100% subsidised government land for as low as Rs0.75 million.

He clarified that ABAD did not want to be part of any controversy over land and the government must decide about that. “ABAD property developers will only be interested in construction.”

ABAD must be regularised as well as other allied industries as they would not be able to give rigid construction rates when cement and steel prices were moving up, he demanded.

Cement bag was being sold for Rs650 in Pakistan while it was being offered at Rs400 to Afghanistan, he said, adding steel prices were also high in the country and were raised arbitrarily. The ABAD chairman said cement and steel - the basic components of construction - were being sold at lower prices in countries where per capita income was $15,000 whereas Pakistan’s per capita income was $1,641.

“We want to use indigenous raw material but it has to be priced at international benchmarks. If the cost of raw material is high, then ABAD will opt for imports. For affordable houses, 80% cost comes from inputs. Cement prices rose without any reason after PM’s announcement of five million houses,” he said.



Meanwhile, the industry needs a one-window solution for all government NOCs (no-objective certificates) including for utilities. “The PM housing scheme should be made part of every department’s agenda in order to achieve the goal,” he said.

The housing scheme should be implemented through ABAD so that things could be regulated and anyone selling the housing units above the rate would be caught, he suggested.

He said if the government went through ABAD to implement the housing scheme, it would not lead to a monopoly. It will help its members if anyone defaults. 

Published in The Express Tribune, October 16^th, 2018.

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