The Association of Builders and Developers (ABAD) on Tuesday offered to construct houses under the Prime Minister’s recently launched Naya Pakistan Housing Scheme within the price tag of Rs. 1.2 million per unit.
The association disputed the figures of the total investment required for the project, adding $50 to 60 is required for the 50 million home project instead of the given $180 billion.
This was announced by newly-elected Chairman ABAD Muhammad Hassan Bakshi at a media briefing at ABAD House in Karachi. Other office-barriers and members of ABAD were also present on this occasion.
Hassan Bakshi said that the figure of $180 billion was quoted by British Pakistani property tycoon Aneel Mussarat. “But he has made the estimate by considering large houses costing Rs. 10 million or more. Pakistan needs small houses in the rural areas,” he added.
“Any unit which comprises two rooms, a bath and a kitchen is called a house. This is an internationally accepted definition of a house. This unit can be constructed on 500 to 800 Sq Ft area. This means that a housing unit can be constructed at a cost ranging between Rs. 750,000 to Rs. 1,200,000. The cost of land is not included in this pricing,” Bakshi added.
Bakshi proposed that the government should engage builder for construction of the houses only and handle the matter of land acquisition or pricing by itself.
Bakshi recalled the previous government had approved a financing plan for construction of low-cost small housing units. Under the scheme, a person can obtain a loan amounting up to Rs. 2 million. He suggested the government to up the financing ceiling under the scheme to Rs.3 million and the central bank may accord approval to it.
“The 50 per cent of the loan amount be given by the State Bank of Pakistan (SBP) at the rate of one per cent. And remaining 50 per cent be financed by commercial banks at the rate of KIBOR plus 3 to 4 per cent,” Bakshi suggested.
Chairman ABAD also highlighted the issue of pricing of construction materials. He said there is no check on the prices of cement, iron and other materials, adding with the launch of the housing scheme prices of these materials will go up. This issue needed to be addressed, he underlined.
He pointed out the steel Industry is working on 100 per cent capacity while the cement industry at 95 per cent installed capacity. “Both the industries are in the process of capacity enhancement and new capacity will be available by June next year,” he added.
Hassan Bakshi said that if the prices of local cement and iron were increased then the government must allow them to import these items.