News Analysis |
In an interesting development, the Supreme Court of Pakistan ordered the National Accountability Bureau (NAB) on Wednesday to file separate references on a series of matters stemming from the Bahria Town Karachi project, including the arrears of three Malir Development Authority (MDA) projects. The implementation bench headed by Justice Azat Saeed was hearing the Bahria Town case when the order was passed.
Moreover, the court directed the corruption watchdog and other relevant departments to take action on the installation of illegal tube wells as well as payments made for sale and purchase of land. The bench instructed NAB and others to also look into the “K4 route issue” and the outstanding payment of MDA’s trio of projects which amounts to Rs1.5 billion.
The SC bench ordered the Sindh government and law enforcement agencies to recover the said land before adjourning the case until January 15.
It is important to mention here that an implementation bench was formed after the verdict of the apex court in Bahira Town Case on 4th May. In its verdict the court barred Bahria Town Karachi from selling any plot or constructed apartment in the housing scheme on the outskirts of the port city, declaring the grant of land to the Malir Develop¬ment Authority and its exchange with the land of the private land developers illegal and void ab initio.
Sources inform that the business tycoon Malik Riaz used his personal influence to get the land through illegal means which got the attention of media and public. The NAB has informed the court that Bahria Town, as per the 2012 survey report, had held 12,156 acres of land but that the area currently in its possession has reached 25,601 acres. The court also noted that 7,220 acres of land were illegally transferred to Bahria Town in 2015, adding that the real estate developer claims that it has not illegally acquired the said land.
The SC bench ordered the Sindh government and law enforcement agencies to recover the said land before adjourning the case until January 15. As a matter of fact, the land owned by the Bahria Town Karachi is now mostly under the ownership of private citizens, overseas Pakistanis, and dealers. There were protests in the metropolitan after the verdict of the court and people argued that the land now did not belong to Malik Riaz or Bahria Town but to the common citizens.
Third party, the new owners of the Bahria Townland, argue that through proper bank channels huge amounts of money even from overseas Pakistanis was transferred for purchase of plots in said society; huge land development and construction works including roads and energy infrastructure were laid down and if all that was not legal then where were the governments and the courts throughout this time period. “What is our crime?”
Analysts suggest that the apex court while implementing the verdict should keep into consideration that the common citizens and dealers who have done nothing wrong but only acquired land through legal channels have a right to be heard and get justice.
Real Dispute: Fair Price for the MDA land?
Since Supreme Court has declared the exchange of land between MDA and Bahria illegal the next question is of compensation to Malir Development Authority (MDA) or Govt of Sindh for the land that it should not have given to Bahria. And here lies the dispute. Before Bahria developed its housing scheme one acre of land in the area was between Rs. 6 to 8 lakh, as per the 2015 MDA rates. MDA revised its 2011 rates in 2015, and Bahria exchanged land in end of 2013, so which rates should be applicable is also a question.
If one acre of land, in 2013, was around Rs. 6-8 lakhs, now as a result of investments by Bahria and hundreds and thousands of third-party investors which Bahria invited through its development, the cost of land can be from Rs. 30 to 40 lakhs per acre. Newspaper quoting Bahria sources cite that Bahria invested around Rs. 500 billion in development. Most of this is “third party investment” by those residents and plot owners who purchased plots from Bahria in easy installments over 2-3 years.
At the 2014 prices (MDA Rates) the total cost of 18,000 acres (land exchanged) should be around Rs. 17- 18 billion. However the current rates of Rs. 30-40 lakhs per acre it can be as high as Rs. 80-100 billion. Bahria, revealed in the court that it generated a total revenue of Rs. 623 billion from the Karachi scheme, out of which Rs. 492 billion have been received and rest is still pending. Implementation bench has to come up with a fair price for the land given to Bahria by MDA. It is not known how MDA will compensate Bahria for the land it acquired from Bahria and will it return or reimburse Bahria for Rs. 4.17 billion it had received from Bahria as “Consolidation charges”
Sensational reporting of court proceedings in newspapers and shrill comments on TV have misled public at large and created a situation where many are happy to take positions without having any understanding of issues on the ground. The real issue is how Supreme Court Implementation Bench finally settles this dispute and determines a fair compensation to MDA keeping in view the land prices in 2013. Implementation bench will have to safeguard the interests of all those common citizens and investors who purchased plots in the scheme as it will determine the future of large housing projects in Pakistan. After DHA, Bahria is the only private sector developer that has successfully undertaken large housing projects and has demonstrated a capacity to deliver quality.
PTI government intends to develop five million housing units in five years, however this needs clear policy for land acquisition, development and compensation and as the Bahria Karachi saga reveals there is no clear framework and almost all schemes in private sector, seen in last 40 years, ultimately become controversial. The only safe schemes for Pakistani common citizens and investors are thus of Defense Housing Authority (DHA) that operate beyond the domain of federal and provincial governments. The real reason is that governments don’t have intelligent transparent frameworks that can facilitate such development.