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Islamabad: PM housing scheme contract

The housing & works minister has informed the Senate Standing Committee on Housing & Works that the contract for construction of one million houses under Prime Minister’s Housing Programme has not been awarded yet to UK-based Company IHL (as reported rather erroneously in the Press) and the matter is still under process, as each and every aspect is being looked into carefully.

The Committee that met at the Parliament House Monday under the chairmanship of Senator Dr Muhammad Ali Brohi was also informed that not a single penny would be spent on the project from the public exchequer, as this would be executed under public-private partnership basis.

The minister assured that his ministry would continue to seek guidance and support from the Senate Committee in this regard. The Committee directed the Ministry of Housing & Works to ensure the highest degree of transparency and safeguarding of the country’s as well as public interest. It also instructed that complete profiles of the remaining 14 companies, which signed the MoU, might also be presented before the August House body.

Extending full support to the government scheme for the provision of housing to the poor and middle income groups, the Committee observed that since the project of this magnitude was not undertaken earlier, it is necessary to keep it under parliamentary oversight to avoid all sorts of delays and shortcomings that plagued such projects in the past. A number of members expressed the view that open bidding must be held before awarding the contract.

Earlier, the Housing & Works secretary informed the Committee that an advertisement was published in all leading newspapers and 50 firms responded in giving the EOI. The project would be implemented under IPDF and it would be on PP-P basis in the form of a joint venture.

He said 14 firms signed the basic MoU, which included reputed firms from Germany, US, UK, Spain, China, Malaysia, etc, and December 25 was its closing date. “We have the services of core financial, legal and technical advisors and are moving under the direction given to us by the Steering Committee of the project,” he said.

The IHL proposals were forwarded to the Ministries of Law and Finance respectively for their evaluation and the agreement is not finalised yet. “Since IHL responded first, it was only natural to evaluate their proposals in the beginning”, he added.

Construction of 30,000 housing units would be undertaken within two years and the project would be completed in 10 phases. Initially, the project consisting of 2,840 units will be taken in phase-I at Defence Road, Lahore. The ministry officials submitted that attempts to scandalise things in the media would serve only to scare away foreign investors and the public at large would suffer, since there is a shortfall of nearly 7.4 million houses in the country.

The IPDF advisor also apprised the meeting of the project’s salient features. He said it is a non-PSDP project to be executed under public-private partnership, adding that IPDF is an independent body and plays the role of a facilitator and enabler. IHL, he said, has a diversified portfolio and shoe making is one of its expertises. However, the firm has prior experience of constructing houses in countries like UK.

He said the observations made by IPDF are being looked into by the ministry and the scheme on the whole is a sound one. “It is commendable that reputed firms are willing to enter into the project and make investment on 4-6 per cent profit, which is good business wise”.

The representative of Ministry of Finance informed the meeting that the agreement was signed between PHA and IHL but IHL was shown to be registered in Lahore (therefore, not foreign) and it was to provide 100 per cent equity for the project and has already purchased land in Lahore. Sovereign guarantees are not involved in the project, as there is no component of foreign loans, etc. He said the ministry was asked to provide Rs6 billion as guarantee but it was not forthcoming, as PHA has no risk and apparently, it would be a construction-sale agreement. The final decision with regard to sovereign guarantees lies with ECC, he added.

The meeting was attended, among others, by Senators Hafiz Abdul Malik Qadri, Shuja-ul-Mulk, Bibi Yasmeen Shah, Dr Abdul Khaliq Pirzada, Sardar Mohammad Jamal Khan Leghari, Sardar Mehmud Khan, Mir Mohabbat Khan Marri, Nisar A Memon, Amjad Abbas, Syed Muhammad Hussain and Muhammad Saleh Shah besides Minister for Housing & Works Senator Rehmatullah Kakar, the M/o Housing & Works secretary, Secretary Senate Raja Muhammad Amin and the M/o Finance additional secretary.

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