Dormant for a decade, KDA wakes up and asks people to pay forgotten dues

People are being asked to pay non-utilisation fee and ground rent for schemes as old as 1974.

KARACHI:

Just when it seemed as if the Karachi Development Authority (KDA), the state-run developer that built half of the city, had become history, it found a new lease of life.

The authority had not been working for the past decade because there was hardly any land left in Karachi to develop. KDA has now found an important reason to survive. It has begun digging into old files to recover millions of rupees.

It is sending bills to people who built homes on its land. Some of them are dated 1964.

The authority developed 372,939 residential, commercial, amenity and industrial plots spread over an area of 51,274 acres across the city. Townships such as North Nazimabad, Malir Colony and Gulshan-e-Iqbal were developed decades ago.

But now, around 27,522 houses have been marked across the city for owing KDA money. According to the director of recoveries at KDA, Syed Mukarram Sultan Bukhari, over Rs84 million were recovered in March alone. “Hundreds of millions of rupees of the city government are stuck with people.”

He said that the money will be used to repair roads and carry out development work in the city.

However, in many of the cases, the property has changed hands a number of times. The people who actually bought the land from KDA built houses, married off their children who in turn sold the houses to someone else.

KDA now operates as a department of the Karachi Metropolitan Corporation. It wants people to pay a non-utilisation fee (NUF) and ground rent. The NUF is the penalty on someone who bought a plot and waited for its price to rise instead of building a house. There are only a handful of such plots in the city.

For example if a scheme was built and sold in 1964 but a house was built on it 10 years later, KDA asks the owners to pay the NUF for that time.

Technically, all land belongs to the state. People can lease it for a maximum of 99 years. But under the bylaws, everyone has to pay ground rent, which was being calculated at 25 paisa per square yard. But since 2004, it was revised to be between 50 paisa and Rs6 per square yard.

To prove when the houses were built owners have to show old electricity, gas or water bills.

“For more than 45 years they didn’t care about it. Then one morning I am told to pay them Rs3.5 million,” said Muhammad Yamin Yaqoob, a resident of Bahadurabad. “This is sheer harassment.” However, recoveries director Bukhari said that the people don’t have to pay all the money at once. Those who feel that they don’t owe this much NUF can have it rectified.

All of the 100 houses of Cutchi Memon Cooperative Housing Society were served notice. “Now it’s up to the owners to prove whether they tried to earn profits by waiting on the plot prices,” said Salim Vakani, the society’s general secretary. “The bungalows in our society were built in 1974. Since then, the property has changed ownership many times. Why has the KDA woken up now?” he asked. “Why is the present owner being made to suffer if it was the previous owner who owed money to the authority?”

Vakani says his society along with many others have decided not to pay the dues. “People are not ready to pay anything. Some of them are saying that we should go to court.”

Recoveries director Bukhari said that there was nothing illegal in what the KDA was doing. “All the dues are mentioned in the lease agreement,” he said. “I am waiting for someone to go to court so everything is settled once and for all.”

Published in The Express Tribune, April 16^th, 2012.