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Closure of housing projects affect 50,000 persons

NISAR AHMAD SHEIKH

ISLAMABAD: With the forcible stoppage of construction of housing units all over the country some 50,000 persons have been directly affected while the contractors' money amounting to about one billion rupees has been blocked.

The stoppage has also indirectly affected some 40 building material concerns leading to laying off of thousands of workers, another adverse effect this stoppage has caused is that the recession-hit economy, which had a good chance of revival, has again been out into limbo.

These were the sentiments of the participants of the All Pakistan Contractors Association which held a press conference here on Tuesday to express concern at the inordinate delay on the part of the government in arriving at a decision as to whether the housing project would be continued or scrapped.

The acting chairman of the association, Akbar Sheikh, accompanied by some one and a half dozen contractors and project managers representing the 38 firms which had been awarded 42 housing contracts, made a request to the Chief Executive General Pervez Musharraf to grant them an interview so as to enable them to apprise him of their genuine problems and difficulties.

He said the government action like helping the cotton growers and the onion growers, a generous gesture, should also provide one to two billion rupees to restart the housing projects for providing jobs to unemployed labour, to boost the economy and to provide housing units for the needy and in doing so honour its contractual obligations.

He explained that for the completion of the 42 housing projects a total amount of Rs 5 billion would be needed. The government may provide the seed money of Rs 1.5 billion to the Housing Ministry to clear the liabilities of the contractors, consultants and designers and to restart the closed projects. The remaining amount, he was confident, would be generated by marketing the sale of the housing units. The seed money will be returned to the government after sale of units in due course of time, he held out the assurance.

Akbar Sheikh pointed out that the title of the land of majority of sites has been transferred in the name of the Pakistan Housing Authority (PHA), therefore, there would be no problem of marketing the housing units.

He was confident that the sale of the housing units in public sector by the PHA will be surer and speedy because people have faith in public housing authorities like the CDA, LDA and KDA.

He said there are more than 9000 plus units in 42 housing projects and autonomous bodies like PBC, PIA and PAEC, etc., would purchase at least half of the housing units for their employees. Welfare associations of various disciplines may go for bulk purchase of housing units for their members. In this way the payment of sale proceeds would be ensured.

He said that a two bedroom unit with a TV lounge, kitchen and bathroom would cost Rs 4,50,000. The allottee will have to make a down payment of 15 percent at the time of allotment and another 15 percent at the time of taking over possession in about two years' time while the rest would be paid in 15 years.

The relaunching of the projects will establish faith of the local and foreign investors in the 'state craft' and healthy economic activity will begin countrywide, stressed the APCA acting chairman.

Spelling out the effects of winding up the projects, the APCA acting chairman said that so far the contractors, consultants, designers have spent Rs 700 million. Barring a few contractors, no one has been paid; hundreds of thousands of skilled and unskilled labour would be rendered jobless.

The government will have to pay substantial amount to the contractors, consultants, designers for settlement of their claims for termination of contracts; the closure of the project will result in waste of investment as well as land; crisis in major industries like steel and cement has deepen after the closure of projects.

He demanded that the projects be restarted as originally planned without dropping in the greater public interest and liabilities of the contractors etc., may be cleared immediately.

He said that the construction industry is the highest tax payer and contributes eight percent to the GDP while employing eight percent of the country's work force thus becoming the biggest employer of manpower. The construction industry, pays Rs 7 billion in direct taxes and about Rs 50 billion in indirect taxes. In fact it pays more taxes compared with the textile industry.

Akbar Sheikh estimated that the country needed at least 600,000 housing units while the demand is increasing at the rate of three hundred thousand every year.

He said, the Chief Executive General Pervez Musharraf on November 26 last year announced to continue the scheme and pay contractors one billion rupees as seed money. But unfortunately even after the passage of about four months the pledge has not been redeemed.

He regretted that some of the sites have been forcibly taken over. At the moment the government is losing Rs 2.5 million daily which is being forced upon the contractors for no fault on their part.

He said they do not wish to go to the court but said that a contract is a contract and has to be honoured. "It is our prayer that we do not go to the court. We are development managers of the country. We have no intention as such to take recourse to law and that is why we are requesting the Chief Executive to give us a chance to explain our problems personally."

The contractors stated on oath that this is the first project in Pakistan which has been started in a most transparent manner and is being implemented with national spirit.