1m houses a pipe dream

Prime Minister Housing Scheme abandoned, government refusal to continue housing projects scares off investors.

ISLAMABAD: The one million houses that Prime Minister Yousaf Raza Gilani had promised for middle and low-income Pakistani families back in 2008 may not be made any time soon. Back then, 23 firms, including 10 foreign companies, had expressed their interest in the project - the Prime Minister Housing Scheme (PMHS).

The companies however did not start work on any housing projects as the government, according to housing ministry officials, refused to accept their demand of “sovereign guarantee”. Under sovereign guarantee, the government will take over the projects if the companies working on them are unable to complete them.

A senior official of Pakistan Housing Authority (PHA) Muhammad Ali Afridi said, “We cannot give them such a guarantee and this was the reason they backed out.”

Presently just two local firms — Maymar Housing Service (Pvt) Ltd in Karachi and Al-Khalil Builders (Pvt) Ltd in Balochistan — are working with PHA. Maymar Housing is constructing 718 flats spread across several high-rising 12 to 14 storey apartments in Gulshan-e-Maymar Karachi, while Khalil Builders are presently selling plots in Turbat Balochistan, according to a PHA official.

PHA’s low number of partners could also be attributed to the authority’s “peculiar” interpretation of the term “joint venture”. PHA, according to official sources, demands their partner firms to bring their own land and resources while the authority contributes its ‘goodwill’ to the project.

The prospects of PMHS do not look good. Numerous companies have signed Memorandum of Understandings (MoU) in the past. For instance, in August 2009 the US-based International Oil Company signed an MoU to invest $10 billion in PHMS. Nothing has happened yet.

The government however, it seems, has not yet given up on the scheme. Just a few days back, Minister for Housing and Works Rehmatullah Kakar said at a press conference that the ministry would welcome any local and foreign company interested in the schemes.

Just recently, on September 28, the Chinese Xiajiang Beixin Construction and Engineering Corporation signed an MoU for construction of houses, apartments and commercial areas in Islamabad, Lahore, Karachi and Quetta.

The government signed two agreements with a German firm, Impro, and the Canadian Star Development Corporation on September 23 this year for the construction of 200,000 housing units in major cities with an initial investment of $500 million and $2.7818 billion in future.

Similarly, Malaysia’s Namfatt Corporation signed an agreement for affordable housing units on a large area in the vicinity of Zone IV along the Kuri Road in Islamabad.

Published in The Express Tribune, October 20^th, 2010.