Pakistan Property News > Karachi Devleopment News :Construction: Rising prices, regulatory hurdles hamper activity

Karachi Devleopment News :Construction: Rising prices, regulatory hurdles hamper activity

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For builders and developers, 2011 was marked by slow business, rising input costs, bureaucratic hurdles, land grabbing and harassment at the hands of tax authorities.

According to the International Housing Finance Programme 2008, the housing backlog in Pakistan is seven million units. However, the Association of Builders and Developers of Pakistan (ABAD) – which represents over 700 builders from across the country – say the national housing backlog is expected to have reached up to nine million units in 2011.

“Housing shortage in the country goes up by 300,000 units every year. About three to four hundred thousand housing units are built every year while the annual demand is between six and seven hundred thousand units in Pakistan,” said ABAD Vice Chairman Arif Siddik.

Home financing

ABAD Chairman (South Region) Saleem Kassim Patel says double-digit inflation and high interest rates in 2011 made it impossible for lower-middle class and middle class people to buy property. He said efforts should be made to make home financing affordable, and its procedure less cumbersome, especially for lower and middle classes.

“Commercial banks have developed negative lists vis-a-vis professions of potential customers and the areas where they want to buy property. This practice limits financing options and hurts both general customers and the construction industry,” he said.

Commercial banks provide home financing in big cities only. The House Building Finance Corporation (HBFC), however, operates in over 90 districts of the country. Commercial banks tend to finance housing purchases and avoid new construction finances because of the perceived risk. It is estimated that the average loan size of the banking sector in home financing is nearly 10 times of the loan size at HBFC, as 80% of the latter’s housing finance is for new construction.

Holding the industry back

A significant rise in cement prices increased the cost of doing business for builders in 2011. The 30% increase in cement prices over a seven-month period was in spite of the reduction in the fixed excise duty from Rs700 to Rs500 per ton while the government vowed to do away with it entirely in two years.

The government also decided in 2011 against giving gas connections to new high-rise buildings to control gas shortage in the country. The decision drew condemnation from industry representatives who termed it short-sighted. “All it’ll do is drive away investment. Why is it meant for high-rises only? The ban is simply ridiculous,” Patel said.

There are 15 under-construction high-rise buildings in the country. Seven of them are in Karachi.

With the rise in threats to builders in the form of land grabbing, encroachment, extortion and demolition of site offices, a Crisis Management Cell was established in Karachi on the directives of the federal interior minister in 2011. However, industry sources say the measure wasn’t effective

Tag : bureaucratic, developers, land grabbing , tax authorities, International Housing Finance Programme , Association of Builders and Developers of Pakistan (ABAD) , encroachment, encroachment, federal interior minister, House Building Finance Corporation (HBFC),

Pakistan Property News > Karachi Devleopment News :Construction: Rising prices, regulatory hurdles hamper activity

Karachi Devleopment News :Construction: Rising prices, regulatory hurdles hamper activity

314369-constructionbuilding-1325283156-859-640x480

 

For builders and developers, 2011 was marked by slow business, rising input costs, bureaucratic hurdles, land grabbing and harassment at the hands of tax authorities.

According to the International Housing Finance Programme 2008, the housing backlog in Pakistan is seven million units. However, the Association of Builders and Developers of Pakistan (ABAD) – which represents over 700 builders from across the country – say the national housing backlog is expected to have reached up to nine million units in 2011.

“Housing shortage in the country goes up by 300,000 units every year. About three to four hundred thousand housing units are built every year while the annual demand is between six and seven hundred thousand units in Pakistan,” said ABAD Vice Chairman Arif Siddik.

Home financing

ABAD Chairman (South Region) Saleem Kassim Patel says double-digit inflation and high interest rates in 2011 made it impossible for lower-middle class and middle class people to buy property. He said efforts should be made to make home financing affordable, and its procedure less cumbersome, especially for lower and middle classes.

“Commercial banks have developed negative lists vis-a-vis professions of potential customers and the areas where they want to buy property. This practice limits financing options and hurts both general customers and the construction industry,” he said.

Commercial banks provide home financing in big cities only. The House Building Finance Corporation (HBFC), however, operates in over 90 districts of the country. Commercial banks tend to finance housing purchases and avoid new construction finances because of the perceived risk. It is estimated that the average loan size of the banking sector in home financing is nearly 10 times of the loan size at HBFC, as 80% of the latter’s housing finance is for new construction.

Holding the industry back

A significant rise in cement prices increased the cost of doing business for builders in 2011. The 30% increase in cement prices over a seven-month period was in spite of the reduction in the fixed excise duty from Rs700 to Rs500 per ton while the government vowed to do away with it entirely in two years.

The government also decided in 2011 against giving gas connections to new high-rise buildings to control gas shortage in the country. The decision drew condemnation from industry representatives who termed it short-sighted. “All it’ll do is drive away investment. Why is it meant for high-rises only? The ban is simply ridiculous,” Patel said.

There are 15 under-construction high-rise buildings in the country. Seven of them are in Karachi.

With the rise in threats to builders in the form of land grabbing, encroachment, extortion and demolition of site offices, a Crisis Management Cell was established in Karachi on the directives of the federal interior minister in 2011. However, industry sources say the measure wasn’t effective

Tag : bureaucratic, developers, land grabbing , tax authorities, International Housing Finance Programme , Association of Builders and Developers of Pakistan (ABAD) , encroachment, encroachment, federal interior minister, House Building Finance Corporation (HBFC),

Pakistan Property News > Islamabad News : IHC orders FIA to probe CDA land scam

IHC orders FIA to probe CDA land scam

ISLAMABAD – The officials of the Capital Development Authority (CDA) involved in Park Road land scam are likely to face the music as the Islamabad High Court (IHC) Friday directed the Federal Investigation Agency (FIA) to take an action against all those involved in the said scam.
Justice Shaukat Aziz Siddiqui was hearing the petition filed by Baqir Hussain Shah, the owner of the land situated at Park Road in Chattha Bakhtawar. The counsel for the petitioner, Raja Inam Ameen Minhas, told the court that his client had purchased 44 kanals of land in the said area and on June 6, 2008, he requested the revenue office of Islamabad Capital Territory (ICT) for the land’s demarcation.
He said on October 10, 2009, the CDA land and rehabilitation director ordered for a second demarcation of his land and its report. He said the second report also did not point out any encroachment by the owner of said land.
He maintained that his client, with the due permission of CDA officials, removed the ditches and made a retaining wall to save his land from a nearby drain. Then, he said, the owner sold some of the land to different buyers who constructed their houses there, he explained.
Minhas told the court that FIA deputy director Mohammad Sajjad Haider, an NRO beneficiary and ex-staff officer with Interior Minister Rehman Malik, who was demanding a share in the said land, later initiated an inquiry of the matter and was threatening the owner of dire consequence. However, the counsel for the FIA dismissed the allegations of the petitioner. Upon that, Justice Shaukat Aziz Siddique dismissed the petition of the owner of the land.

Tag : Islamabad high Court, FIA, Federal Investigation Authority, CDA, Capital Development Authority, Islamabad Capital Territory, rehabilitation, demarcation, Park Road

Pakistan Property News > Islamabad News : IHC orders FIA to probe CDA land scam

IHC orders FIA to probe CDA land scam

ISLAMABAD – The officials of the Capital Development Authority (CDA) involved in Park Road land scam are likely to face the music as the Islamabad High Court (IHC) Friday directed the Federal Investigation Agency (FIA) to take an action against all those involved in the said scam.
Justice Shaukat Aziz Siddiqui was hearing the petition filed by Baqir Hussain Shah, the owner of the land situated at Park Road in Chattha Bakhtawar. The counsel for the petitioner, Raja Inam Ameen Minhas, told the court that his client had purchased 44 kanals of land in the said area and on June 6, 2008, he requested the revenue office of Islamabad Capital Territory (ICT) for the land’s demarcation.
He said on October 10, 2009, the CDA land and rehabilitation director ordered for a second demarcation of his land and its report. He said the second report also did not point out any encroachment by the owner of said land.
He maintained that his client, with the due permission of CDA officials, removed the ditches and made a retaining wall to save his land from a nearby drain. Then, he said, the owner sold some of the land to different buyers who constructed their houses there, he explained.
Minhas told the court that FIA deputy director Mohammad Sajjad Haider, an NRO beneficiary and ex-staff officer with Interior Minister Rehman Malik, who was demanding a share in the said land, later initiated an inquiry of the matter and was threatening the owner of dire consequence. However, the counsel for the FIA dismissed the allegations of the petitioner. Upon that, Justice Shaukat Aziz Siddique dismissed the petition of the owner of the land.

Tag : Islamabad high Court, FIA, Federal Investigation Authority, CDA, Capital Development Authority, Islamabad Capital Territory, rehabilitation, demarcation, Park Road

Pakistan Property News > Balochistan Development News : Urea vessels causing congestion at Gwadar Port

Balochistan Development News : Urea vessels causing congestion at Gwadar Port

Shipping sources disclosed that mv Aggeious with 54,000 tons of urea arrived on Dec 17, mv Vesco Sky with 46,500 tons is waiting since Dec 19, and Chungo Tres with 49,000 tons arrived on Dec 27 while mv Rapid with 53,000 tons reached on Dec 29. – File photo

KARACHI: The government may suffer loss worth millions of rupees owing to wrong planning and defective shipping schedule as presently four vessels, carrying around 202,500 tons of urea, are waiting at the outer anchorage of the Gwadar port for the last six to 10 days.

The successive arrival of ships at the Gwadar Port has not only caused congestion, but also resulted in long waiting period for vessels at the off-port to get their turn for berths where only three ships can be accommodated at a time, shipping sources said.

Sources said around 722,000 tons of urea had been tendered for import by the Trading Corporation of Pakistan (TCP) to meet the Rabi wheat crop demand.

Around 456,000 tons of urea has already arrived and unloaded at the Gwadar port and a balance of 266,000 tons is due. All the 18 vessels, which had been chartered for haulage of urea to meet the pressing demand of growers, have been asked to call at Gwadar port.

The country is faced with around one million tons of urea shortage and there was an urgent need for import of urea. The government could have diverted some of the vessels to Karachi and Qasim ports to avert the current situation, sources said, adding presently both Karachi and Qasim ports after an embargo on Nato/Isaf containers movement across the Pakistan-Afghan border are having a lot of idle berthing capacity and could have easily accommodated urea loaded vessels.

Shipping sources disclosed that mv Aggeious with 54,000 tons of urea arrived on Dec 17, mv Vesco Sky with 46,500 tons is waiting since Dec 19, and Chungo Tres with 49,000 tons arrived on Dec 27 while mv Rapid with 53,000 tons reached on Dec 29.

Presently three ships are unloading urea at the Gwadar port with one vessel mv Lycavtios after unloading 51,996 tons of urea.

The vessel is expected to sail out on Thursday.

Official sources disclosed that the TCP initially booked 260,000 tons of urea from world market at $538 per ton, but subsequently on purchasing 440,000, the corporation paid $540.75 per ton. However, urea price in the world market has now dropped to $530 per ton.

Sources said that on average around 4000 to 5000 tons of urea is being unloaded per day at Gwadar, thereby resulting in long delays in clearance of ships.

As a result of this, vessels waiting outside the port have to wait for six to 10 days for being allotted berths at the port.

Shipping circles suggested that the government should divert ships to Karachi and Qasim port because presently both the ports are working under capacity and could save the country from suffering millions of rupees in demurrage and transportation cost.They further said that around 250,000 tons of urea had already left Gwadar port, of which 75,000 tons is still lying in warehouses at Karachi. Since there is no direct connectivity to the upcountry from Gwadar, entire quantity of imported urea would first come to Karachi through coastal highway and then again loaded on trucks to the upcountry.

It is not only the shipping schedule which is incurring extra cost to the national exchequer, but transportation and distribution of urea in a speedy manner is also a big issue.

Though the country has urea production capacity of 70 million tons, it is not being utilised even to the extent of meeting the domestic demand of around 22 million tons per annum due to gas shortage.

This is due to defective government policy which fails to make necessary adjustments in gas tariff to meet urea demand from local sources, Asif Aziz Balagamwala, member KCCI managing committee said.

He said if the government only raises gas tariff for fertiliser industry to the level of general industry, it would save millions of rupees by curtailing urea imports which is much costlier.

Mr Balagamwala explained that by jacking up gas tariff for fertiliser industry, it would only push urea price by Rs300 per 50kg bag, but on importing, it costs around Rs1500 more per 50kg bag for which the government has to give higher subsidy to growers.The government supplies urea to National Marketing Fertiliser Ltd (NMFL) at Rs10,760 per ton which sells at a control price of Rs1,300 per 50kg bag.

However, middlemen and boarders have completely took control of the urea market and pushed its price in the range of Rs1,600 to Rs2,000 per 50kg bag, market sources said.

Tag : Gawadar Port, Gawadar Sea Port, Gawadar Property News, Gawadar port authority, Gawadar airport, KCCI, TCP, gawadar map