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Monday, July 15, 2024

Nasla Tower Demolition: Challenge for the Karachi Developers & Investors

While Supreme Court of Pakistan sends a strong message against illegal constructions, Nasla Tower’s tragic end raises difficult questions for property developers, investors and common citizens of Karachi. May be "Due Diligence" by large Insurance firms offers the way forward to restore trust in failing government departments.

KARACHI: While the Deputy Commissioner and city’s administration continue to debate the best and the safest way to demolish the 15-storey residential Nasla Tower, builders and investors across Karachi are wondering, in a state of fear, on the future of commercial constructions across country’s largest city.

Country’s apex court, taking Suo Moto notice under Art. 184(3) had determined that Nasla Tower was built illegally, and more than 340 yards of extra land was appropriated in its structure, of 1121 yards, which was not part of the original allotment of around 780 yards.  It ordered demolition of the building on June 16, this year when it rejected a review by the builder.

Later, Supreme Court Registry had issued a written verdict in the Nasla Tower case, in the last week of October, ordering that controlled modern devices be used to demolish the high-rise building and to ensure that there was no further damage to other side structures during the demolition.

Read more: Pakistan’s Real Estate Development: A Potential Gold Mine

The court order had further instructed that this work should be completed in one week and the procedure prevailing in other countries for demolition of buildings should be observed. The apex court also ordered that the cost of demolition of the building should be borne by the owner of Nasla Tower and if the owner did not pay, the commissioner should sell the land.

Experts however pointed to the Deputy Commissioner’s team that a controlled detonation was not viable as it might also collapse the Nursery flyover, adjacent buildings and water and other utility pipelines. Besides, they said, a controlled detonation was not possible because the building was located in a densely populated area with a heavy traffic flow.

Debate across Karachi builders, developers, and investors

While the city’s administration and the experts continue to debate the best way to demolish Nasla Tower, another kind of debate is raging across the community of builders and investors across Karachi – which is Pakistan’s most built city and enjoys a disproportionate share of high-rise apartment complexes.

Builders and investors have been gripped by fear and uncertainty because Nasla Tower has a complex history dating back to 1950 and the land allotment, expansion and building construction took place under NOCs from multiple jurisdictions over a period of sixty years and remained unchallenged till the determination by the Supreme Court of Pakistan.

Facts are all over the print and electronic media. Plot No. 193-A, measuring 780 square yards, in the Sindh Muslim Cooperative Housing Society (SMCHS) at Sharea Faisal, was first allotted by SMCHS to a certain Nusratli in 1950 – three years after the creation of Pakistan.

Karachi was then a relatively a much smaller city, perhaps with half a million citizens, as compared to the large megalopolis of 25 million it has become today. It was rapidly growing and expanding being the only port city and was attracting migrations from parts of India and from all over Pakistan. However, what is now “Shah Rah e Faisal” was then called Karachi-Malir Drigh Road.

Upon Nusrat Ali’s death, the plot 193-A was transferred to his widow, Mustafai Begum. In 1957, the (main) road (Drigh Road) next to this plot was proposed to be realigned to 240 ft. from 280 ft. As a result, 20 ft. on both sides were allotted to SMCHS by the Commissioner against consideration. In 1958, SMCHA permitted allotment of an additional area of 20ft. bordering Plot No. A193 to Mustafai Begum. As a result, the area of the plot was increased to 1044 Sq. Yds.

Read more: Encroachment free Empress Market: The Naya Karachi of Naya Pakistan

This is apparently the allotment that has been found illegal and without any basis by the apex court after more than sixty years as no modified lease has been found on record. But the developer, that later erected Nasla Tower had purchased the property in the year 2005 after formalising due compliances – as per conventions. No objections were received against the sale from any quarters, including government departments and the civic agencies.

So, no one is clear if the builder or developer had any means of discovering if the allotments done sixty years ago were illegal. Many speculate that there may have been problems or loopholes or collusions in subsequent commercialization of the property when permissions were obtained to turn a standard residential property of mere 1000 yards into a 15-storey tower, but this is not the real issue for the fear that has gripped the developers and investors across the city.

They wonder what could be the future of many other buildings that have been raised years or decades ago and may have suffered from one or the other legal lacunae that remained undiscovered at the time of sale, transfer and construction and may be discovered at some stage when the original allottees, government officials and civic regulators are dead and not accountable. Developers across Karachi wonder if there could be some mechanism or institution that can take final responsibility for due diligence in such matters and can verify all the facts before final construction of a commercial plaza gets go ahead.

Could Insurance Firms provide “Due Diligence” and certainty?

Nasla Tower’s tragic saga symbolizes this challenge. It had 43 allottees, sale of land may not be sufficient to reimburse them, the developer already suffering from cancer may not be financially capable to reimburse all allottees. Supreme Court’s strict stand against illegal constructions is well known. Most welcome court’s principled position that may help set standards of probity for the government departments, developers, and investors.

Read more: Encroachment in Pakistan: A national psyche

But then most investors in today’s market practices are ordinary citizens who take decisions on the basis of advertisements in the media and can at best check the NOCS by relevant government departments and bodies like SBCA in Karachi. There must be some mechanism or body that can be relied by common investors and businessmen.

One idea that is taking shape is that of well reputed insurance firms that provide last stage due diligence before transactions and constructions go ahead. In western cities like London and New York the role of solicitor firms and Insurance companies is paramount in providing security and stability to the real estate market. Perhaps it is time for Pakistan to enter that age. Karachi’s property markets desperately need new ideas.