Assistance needed: Construction industry reaches out to government

Private sector cannot provide cost-effective housing to masses without support.

Our Correspondent August 13, 2014


If there is one industry that has an eminent role to play right now, it is the construction industry in Pakistan. The need for housing and construction has exponentially increased with a rise in urbanisation.

A seminar held on the ‘Role of construction industry in the national economy’ – on the sidelines of the three-day exhibition being organised by the Association of Builders and Developers of Pakistan (ABAD) at the Karachi Expo Centre – suggested the need of government assistance for the industry.

“The private sector of the country cannot provide cost effective housing to the masses unless the government steps in and helps the construction industry,” said ABAD Senior Vice Chairman Saleem Kassim Patel.

“The government should realise that it is the private sector which is providing cost effective housing to the masses in big cities, especially in Karachi, otherwise the growth of slums in large cities would have been devastating,” he said.

A number of professionals spoke at the seminar and discussed leading issues of the country’s construction industry such as the dearth of big construction companies and the use of low quality steel in housing and construction.

Speaking to The Express Tribune, renowned architect and town planner, Arif Hasan said the role of ABAD members is very important to address the housing issues in Pakistan.

Hasan mentioned that mortgage finance is embarrassingly low in Pakistan, which is one of the major reasons why the housing industry is not picking up. The mortgage-to-GDP ratio should have been four to five percent in Pakistan, he said.

According to the State Bank of Pakistan (SBP), mortgage-to-GDP ratio is only 0.6% while gross housing finance at the end of 2013 amounted to just Rs52.2 billion, down 8.5% from a year ago.

“With extremely low mortgage-to-GDP ratio and shortage of land, ABAD – an association of over 700 builders and developers – cannot do much for the housing industry of the country,” he stressed.

The three-day exhibition, which will conclude on August 14, has attracted hundreds of allied industries like tiles, sanitary and hardware, paints, pipe manufacturers. Exhibitors believe that the presence of the country’s leading builders and developers in the show will result in business deals between builders and equipment makers.

However, despite positive sentiments about the future growth of the construction industry, some exhibitors pointed out that limited gas supply to new residential high-rise buildings is hampering the growth in this industry.

“Our sales have been satisfactory in recent months, but the energy shortages are restricting the growth of manufacturing sector,” Sonex Tiles & Ceramics Industries Project Manager Rafaqat Ali said.

“Moreover, slow growth in the construction sector is due to the short gas supply to the new residential schemes thus hampering the sales of items like sanitary, hardware and tiles,” he added.

About two years ago, PPP-led previous government had placed a ban on all new connections to high-rise buildings. Sui Southern Gas Company (SSGC) – one of the two gas distribution companies in the country – is still following the ban and thus creating problems for the builders and developers in Sindh especially in Karachi.

The exhibition is being organised in all six halls of the Expo Centre. According to the organisers, there are over 130 companies exhibiting in the show out of which 24 are from different countries like UAE, Malaysia, China, Turkey, Thailand, Singapore, Sri Lanka and Germany.

According to ABAD, Pakistan lacks 8 million houses and the ever-increasing shortage is increasing at a rate of 300,000 housing units yearly.

Published in The Express Tribune, August 14th, 2014.

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