PTI Govt Finds a $2 Billion Foreign Investor/Builder For Naya Pakistan Housing Program

Just the build and deliver portion of the NPH scheme (excluding land cost/price, soft costs, etc) is estimated to be a whopping $40 billion to $60 billion program–as big or bigger than the Pakistan China Economic Corridor (CPEC).

BE2C2 Report (Islamabad) — A Chinese company on Wednesday held talks with Prime Minister Imran Khan and committed investing $2 billion dollars in Pakistan’s housing sector–an earlier report (in January) said a Chinese company was willing to build 2 million housing units under the Naya Pakistan Housing Scheme in urban and rural areas.

The company, XCMG, which manufactures and exports machinery worldwide also wants to setup a heavy equipment manufacturing plant and assembly line in the country.

Xuzhou Construction Machinery Group Co. Ltd’s (XCMG) Global Sales President and General Manager Dr Hanson Liu, as well as the Chairman of the HSS Group, Syed Saman Hashmi, announced their plans at their meeting with the premier at the PM Office here.

Related Article: How Realistic and Practical is Imran Khan’s 5m Houses, 10m Jobs Initiative

XCMG — described as China’s leading “total solution provider” for the global construction industry’s equipment and machinery, has expertise in constructing high rise buildings and housing units.

The PTI-led government aims to build 5m low income housing units countrywide during its 5 year tenure–considered a very ambitious program by experts but doable if collaborative approach is taken with enabling and not inhibitive bureaucratic involvement, said one expert.

Just the build and deliver portion of the NPH scheme (excluding land cost/price, soft costs, etc) is estimated to be a whopping $40 billion to $60 billion program—-as big or bigger than the Pakistan China Economic Corridor (CPEC)–assuming that each unit of an average 400sft to 600 sft dwelling and built by a qualified developer at the average least competitive price of Rs2500 and Rs3000 per square foot respectively on a countrywide scale.

Pakistan’s housing and construction sector, both lack the capability and capacity to wade into such a massive pool without the pre-requisites been first taken care of.

Also Read: 90 Percent Housing Societies Duck FIA Audit Ordered By Supreme Court

Therefore, the government seeks local and foreign investors, expertise, overseas Pakistanis involvement and qualified builders & developers and is establishing ease of doing business methodologies so that potential stakeholders can to be transparently participative in the ambitious venture.

With the government owning lands, and housing demand/supply skewed, the opportunity cost/benefit and as well as public policy attributes are skewed in favor of such a mega initiative. On public-private partnership basis, it could be a starter, said the expert.

A source privy to the development said that presently legal framework order are being worked out for mortgage, home loans by commercial banks, foreclosure laws, and builders/developers qualifications, etc.

It would take six to 8 months to hash all these matters out, the source said, adding that previously the home loan portfolio for commercial banks was less than 5 to 8 percent, but now the State Bank has allowed these banks higher percentage of mortgage and construction loans in their overall loan regime.

The housing projects in different locations to be built under the Naya Pakistan Housing Scheme is a gigantic step, given the lack of mortgage loans and the delivery ecosystem as prevalent in other developing countries.

The PTI-led governments in the Center, Khyber Pakhtunkhwa and Punjab provinces have made headways in the matter, said the source.

Sindh government launches low-cost housing scheme for Karachi residents

Meanwhile, the Sindh government has launched a low-cost housing scheme for residents of Karachi on Wednesday.

The housing project was launched in Taiser Town Scheme-45 of Malir Development Authority. Through the scheme, residents can get the ownership of plots ranging from 80 square-yards to 400 square-yards by taking part in a lucky draw.

The government has set the price for 80 square-yard plots at Rs.80,000; for 120 square-yard plots at 120,000; for 240 square-yard plots at Rs.528,000; and, for 400 square-yard plots at Rs.1,200,000.

Long queues of people were seen outside many branches of Silk Bank to get the form, which was available free-of-charge. The forms are also available online and can be submitted by March 31, 2019.

Pakistan Tehreek-e-Insaf’s Firdous Naqvi, who is also the Leader of the Opposition in the Sindh Assembly, criticized the PPP-led provincial government on the launch of the scheme.

He said the Sindh government was quick to launch a low-cost housing scheme after the PTI had announced to do the same in the city.

Housing is a provincial matter under the 18th Amendment. A PPP and PTI competition in this subsector of the economy could ultimately benefit the public, said one expert.

BE2C2 Report is a data journalism initiative of Irshad Salim Associates, a US-based consulting firm and it Pakistan affiliate BE2C2