HDA told to collect EDC at old rate

Authority had increased the rate from Rs250 per square yard to Rs1,450 per square yard

HYDRABAD:

The Hyderabad Development Authority (HDA) seems to have lost the initial battle against builders and developers on the matter of external development charges (EDC) collected for providing external infrastructure development for a housing scheme.

The Sindh High Court has barred the authority from collecting the renewed EDC of Rs1,450 per square yard of covered area in a housing scheme till the next date of hearing on May 27. The HDA has been ordered to collect the old EDC of Rs250 per square yard till it can convince the court that the sudden hike in the charges, increasing it by six times, was justified.

"Following the order passed at the principal seat in Karachi, the respondents are directed to charge the old fee structure for their various services till the next date of hearing," reads the order, given on the petition filed by Association of Builders and Development (ABAD) Hyderabad region.

A Karachi bench of the SHC had stayed on March 16 the application of the increased fees being charged by the Karachi Development Authority (KDA) till the next hearing.

The HDA's governing body's 118th meeting on November 14, 2019, had passed a resolution approving the new rates against a range of service. The scrutiny fees for the layout was increased from Rs6,000 to Rs15,000 and the fee for demarcation from Rs2,000 to Rs5,000. The new NOC fee for the layout was enhanced to Rs50,000 from Rs20,000 and that for demarcation to Rs12,500 from Rs5,000. The HDA earlier collected Rs55,000 as betterment fee from the builders constructing a commercial building and the amount had been increased to Rs137,500.

The EDC was being charged for almost a decade at the rate of Rs250 per square yard of the covered area in a housing scheme. The HDA introduced almost a six times surge in the rate to Rs1,450, contending that the rates remained frozen for more than nine years. A builder ends up paying between Rs4.2 million to Rs4.4 million as the EDC per acre of a housing scheme. The same charges earlier were between Rs726,000 to Rs814,000 as the covered area varies in the housing schemes.

HDA DG Ghulam Muhammad Qaimkhani had said in a recent interview to The Express Tribune that even the cheapest of the housing schemes were charging around Rs2,500 per square yard as development charges from an allottee of a plot or residential unit. The highest amount currently being charged by a housing scheme in Hyderabad is Rs5,500 per sq yd.

"The HDA is supposed to construct roads and lay water supply and drainage lines, which are very expensive projects against the EDC," he had underlined.

The ABAD maintained in its petition that the authority jacked up the charges without taking the stakeholders on board. The association also alleged that the hike in question violated the HDA's own rules and regulations. They argued that the fee collected for the development works was seldom utilised for development projects.

The petitioner claimed that even the HDA's own housing schemes, like HDA Employees Cooperative Housing Society phases I, II and III in Qasimabad and Gulistan-e-Sarmast, Kohsar Extension and Gulshan-e-Quaid in Latifabad, were marred by poor infrastructure.

"The respondents have received billions of rupees under cover of external development charges from the private builders and developers but same have not been spent," the petitioner claimed.

The association also alleged that no forensic audit had been conducted for the billions of rupees collected by the HDA from the allottees of Gulistan-e-Sarmast, which consists of 33,500 plots that remain far from completion even after 12 years of launching.

The ABAD prayed the court to declare the HDA's notification of increasing the fees and allowing annual enhancement of seven per cent to nine per cent in the fees unlawful. They also pleaded the court to order the HDA to submit details of the EDC and betterment charges collected from the builders since 2010 and expenditures of the same on the development works to the court.

Published in The Express Tribune, April 27^th, 2021.