Chapter - 1

INTRODUCTION

In recent years considerable attention has been processed on methods ofevaluating projects. The increasing interest in the evaluation reflects theimportance of analysis in making the project a success.

Evaluation is a kind of measure, which specifically gauge the prospectsconcerned with the project by considering design behaviour and resultantoutput after the appraisal and object oriented monitoring.

Analysis provides a frame work with in which all aspects of a proposedproject can be evaluated in a co-ordinated, systematic manner. Analysisbefore, during and after projects execution help us evaluate projectsfeasibility and can save a lot of inconvenience and expenditure from beingwasted on undesired or less important projects.

Project evaluation allows us to do just that; a well-conceived and well-directed evaluation program can be extra ordinarily effective in deliveringreal benefits to building owners, managers and occupants. These benefitscan be significant and diverse as:

Better matching of demand and supply. Improved productivity within the work place. Minimization of occupancy costs. Increased user satisfaction. Certainty of management and design decision making. Higher return on investment in buildings and people.

Though evaluation, people get commercial, organizational, operational anddesign intelligence and make confidence, successful decisions aboutbuildings and operations with in buildings.

ANALYSIS

Systematic analysis of the extensive range of existing and innovativeprojects especially social programs are now common place. Analysis is anarea of activity devoted to collecting, analyzing, and interpreting

information on the need for, implementation of, and effectiveness andefficiency of intervention efforts to better the lot of human kind byimproving social condition and community life.

In planning social intervention programs, the focus of evaluations is onthe extent and severity of problems requiring social intervention and onthe design of programs to ameliorate them. In the conduct of ongoing andinnovative programs, the concern is that programs are reaching theirintended target populations acre are providing the resources, services, andbenefits envisioned. As interventions are implemented and continued, thereis interest in whether they are effective and, if so, what the magnitude ofimpacts are. For accountability purposes, and for decision making on thecontinuance, expansion, or curtailment of programs, it is important toconsider costs in relation to benefits, and to compare an intervention’scost-efficiency to that of alternative resource allocation strategies.

Some evaluations are comprehensive and consider all of these questions;other are directed at only some of them. In all cases, the aim is toprovide the most valid and reliable findings possible within political andethical constraints and the limitations imposed by time, money and humanresources.

WHY ANALYSIS

Analysis may be undertaken for a variety of reasons:

For management and administrative purposes. To assess the appropriateness of program changes. To identify ways to improve the delivery of interventions. To meet the accountability requirements of funding groups. May be undertaken for planning and policy purposes. To test innovative ideas on how to deal with human and community

problems. To decide whether to expand and curtail programmes. To support administrative program as opposed.

Finally, they may be undertaken to test a particular social sciencehypothesis or a professional practice principle.

For all above purposes, the key goal is to design and implement anevaluation that provides a firm assessment, one that would be unchanged, ifthe evaluation were replicated by the same evaluators or conducted by

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another group.

OBJECTIVES

Analysis can have a variety of objectives:

1. To judge the worth of ongoing programs.2. To estimate the usefulness of attempts to improve them.3. To assess the utility of innovative programs and initiatives.4. To increase the effectiveness of program management and

administration.5. To meet various accountability requirements.

INTRODUCTION OF SENSITIVITY ANALYSIS

Sensitivity analysis will tell us, which are the correct prices. In othercircumstances it will tell us which the important prices are to be sureabout. In a perfectly competitive economy the proper prices for costbenefit analysis are in general the market prices of the resourcesinvolved. Market prices do not reflect the costs elsewhere in the timeeconomy. At the same time it is very expensive and perhaps impossible tofind out what these costs really are.

There is something called sensitivity analysis which is being talked abouta great deal in operations research cities in the Pakistan.

WHAT IS SENSITIVITY ANALYSIS?

A set of prices from the housing project point of view; which contains:

The price of labour. The interest rate. The price of foreign exchange. The price of building materials. The price of cement. The price of oil. The price of steel. The price of constructional equipments etc., certain technical data

whose values are not completely sure fall in to the same category.

The sensitivity analysis asks:

How much difference does it make if we are wrong?

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How sensitive are four results to a change in assumptions? What is the real cost of unskilled labour to the economy?

For analyzing a project we should try several different assumptions abouteach of these critical prices. We should try several interest rates and ifwe find that the project is terribly sensitive to the assumptions that wemake about the interest rate, and then it means that we will have to pay alot of attention to picking the proper rate for discounting the costs andreturns. In other hands the project may turn out to be rather insensitiveto the rate f interest we assume for discounting. It may change therelative magnitudes of costs and benefits comparatively little if we assume8% rather than 4%. In that case we do not have to worry too much about it.

On the cost of labour, for instance, if we take current rate for labour, weare likely to get one result. When we are analysis in some areas the costof local buildings and cost of R.C.C. structures. If we take a somewhatlower labour costs, local buildings are likely to look more profitable thanR.C.C. structures.

This information tells us that the analysis is sensitive to what we assumeabout the cost of labour.

In such circumstances it is important to be sure about the prices ortechnical data we assume for our analysis.

If the projects worth is sensitive to the cost of capital then thissensitivity further suggests that we ought to try to design a less capitalusing solution to the problem, since the costs of being wrong could besubstantial.

SENSITIVITY ANALYSIS

Sensitivity analysis is the study of conditions under which a solution isvalid. There may be side effects or subtle differences not reflected in theestimates of costs: the gas supply may be more or less reliable than theelectricity supply, or one type of furnace may be more immune to studentvandalism. The cost of one energy source may be more likely to escalatethan that of the other. If a clear choice does not emerge, either theprincipal can make an arbitrary decision (having found it cannot costsignificantly more than the rejected solution, or there can be a return toan earlier step.

Modern Engineering By DONOVAXI YOUNG

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EconomyJohn Willey and SonsInc.Year 1993.

Georgia Institute ofTechnologyPage: 4.

Sensitivity analysis is defined here as the determination of the economicperformance of engineering alternatives as measured by present value,annual cash flow or rate of return, and as a function of one or morevariables.

A sensitivity analysis is used to evaluate the effects of uncertainty.Sensitivity analysis is also used in more formal risk analysis whereprobabilities may be assigned to possible values of variables.

The following discussion concentrates on sensitivity analysis and does notdeal with the distinctions between uncertainty a risk.

1. Inflation as a Factor in Sensitivity Analysis

Sensitivity analysis are commonly performed on variables such as throughput, utilization, and price of a product. These types of variables areoften the dominant factor in determining the economic out come of aninvestment.

SENSITIVITY ANALYSIS

Reworking an analysis to see what happens under these changed circumstancesis termed sensitivity analysis. How sensitive is a projects internaleconomic or financial return to increased construction cost?

To stretch out in the implementation period? To a fall in prices?Sensitivity analysis is one means of trying to deal with a key reality ofproject analysis: the fact that projections are subject to high degree ofuncertainty about what will happen.

A sensitivity analysis prior to the detailed appraisal of the project candetermine the collective value of information to be obtained fromadditional investigations. Further more, when additional precision ofestimates can not be attained. Sensitivity analysis, combined with roughestimates of the extent of uncertainty about various factors andparameters, can provide a preliminary estimate of the risk that the rate ofreturn will be lower than anticipated.

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In risk analysis, the single point estimates (or best estimates) are firstof all partially replaced by estimated probability distributions, when thisis a more realistic assessment of the information available to the experts.

Sensitivity analysis on policy or controllable variables and probabilityappraisal can be expected to contribute new insights into the anatomy ofthe economic benefits of a project. It is difficult to generalize about theextent of this contribution. In any case consideration of alternativecourses of action in a project is almost always useful. The value ofknowing the estimated probability distribution depends on the credibilityof the judgments made in the analysis and on knowledge of the probabilitydistributions of alternative projects.

SENSITIVITY ANALYSIS TEST

Sensitivity is a projects internal economic or financial return toincreased construction cost:

To a stretch out in the implementation period.

To a fall in prices?

Re-working an analysis to see what happens under these changedcircumstances is termed as sensitivity analysis test.

TABULAR ANALYSIS

When the results of the analysis of any data or information are shown intable form, so to easily read out the required information and results ofthe analysis, it is called “Tabular Analysis”.

BAR CHART ANALYSIS

When the results of the analysis are compared in chart form, so as toeasily compare the results of the analysis with different possibilities, itis termed as “Bar Chart Analysis”

OR

Once a schedule of important dates has been developed, more detailedinvestigation can translate the dates into a bar chart that, setting outthe programme in visual form, permits the rate, sequence and duration ofworking on each particular operation to be seen.

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PROGRESS CHART ANALYSIS

The simple form of over all progress chart makes the cumulative value ofwork done month by month for the duration of the contract. The progressanalysis can be checked by this chart easily.

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ECONOMY

WHAT IS AN ECONOMY?

An economy is a mechanism that allocates scarce resources among competinguses. This mechanism achieves three things:

What How For whom.

1. What goods and services will be produced and in what quantities? Howmany VCRs will be made and how many movie theatres will be build? Howmany high performance cars will be built and how may trucks andstation wagons?

2. How will the various goods and services be produced. Will a supermarket operate with three checkout lines and clerks using laserscanners or six checkout lines and clerks keeping in prices by hand?Will workers weld station wagons by hand or will reboots do the job?Will formers keep track of their livestock feeding schedules andinventories by using paper and pencil records or personal computers?Will credit card companies use computers to read charge ships in NewYork.

3. For whom will the various goods and services be produced? Thedistribution of economic benefits depends on the distribution ofincome and wealth. Those with a high income and great wealth consumemore goods and services than those with low income and little wealth.Who gets to consume what thus depends on income.

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To understand how an Economy Works?

We must identify its major working parts and see how they interact witheach other. The working parts of the economy fall into two categories.

1. Decision makers – any person or organized group of persons thatmakes choiuces.

2. Co-ordination mechanisms – arrangements that make the choices ofone person or group compatible with the choices of others.

Decision Makers

Decision makers fall into three groups:

a) Households.b) Firmsc) Government

a) Households

A household is any group of people living together as a decision-makingunit. Every individual in the economy belongs to a household. Somehousehold consist of a single person while others consist either offamilies or of groups of unrelated individuals, such as two or threestudents sharing an apartment.

b) Firm

A firm is an organization that produces goods and services. All producersare called.

ECONOMY IN THE BUILDING SENSE

Economy is one of the very important factor which is required to be kept inview while involving any scheme. Every unit of the built up area is afunction of cost and as such the architect has to make sure that thebuilding planned by him can be completed within the funds available for theproject. Many-a-times it becomes necessary to carryout number ofalterations in the plans to keep the proposal within the limitation offunds. Some of the factors which can be considered to achieve economywithout sacrificing the basic principles of planning are:

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i) Conceive simple elevation without ornamental work.

ii) Standardize the size of various components of the building.

iii) Do not use rich specifications for internal and external finishes.

iv) Specify use of locally available materials to the extent possible.

v) Do not use timber for Door/Windows frames. Use R.C.C. frames on L-iron steel frames instead.

vi) Adopt single stack system for plumbing.

ECONOMIC ANALYSIS

Definition of Economics

There are various definitins of economic. But one of the most usefuldefinition given by Prof. Samuelson inhis world famous text book is:

“Economics is the study of how men and society choose, with or without theuse of money, to employ scarce productive resources, which could havealternative, uses, to produce various commodities overtime and thedistribute them for consumption, now and in the future, among variouspeople and groups in society”1.

Economic means “The study of how people use their limited resources to tryto satisfy unlimited wants”.

Economic Analysis

The economic analysis basically allows for remuneration to labour and otherinputs at market prices or shadow prices which are intended to approximatetrue opportunity costs. Every thing left over is than compared to thecapital stream necessary for the project.

Economic analysis is the rational approach toward the price structure, upsand down falls, proportional as well as fractional advantage in respect offuture and hidden factors, which are likely to encounter during thephysical progress and damage consideration during the carrying out of theactivity.

Economic analysis of a project tells us nothing about income distribution,1 Crowson Phillipl Economics for Management; year 1985, Macmillan Press Hong Kong.

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it is neutral as well to capital ownership. The value of a capital assetarises from the right to receive the future income which it generates.Since over economic analysis methodology does not specify who in theeconomy is to receive the income which our project earns, it is neutral towho owns the capital.

Economic measures of a project worth are equally valid to help choose themost remunerative alternative from the social stand point whether thecapital is to come from public revenue or whether the project is to be inthe public sector or to be operated by individuals on their own behalf.

Economic Return

In the total return for productivity or profitability to the whole societyor economy of all the resources committed to the project regardless of whoin the society contributes them and regardless of who in the societyreceives the benefits. This is the social or economic return of the projectand we determine it by applying what we will term economic analysis.

ECONOMIC ANALYSIS DOCUMENTATION

Many technical reports contain economic analysis section in which thechoice among the main design alternatives is explained. A four prtstructure is recommended. It is assumed that alternatives have already beendescribed.

A) The First Part is a cost estimate for each alternative. Assuming thatan alternative involves an investment, its cost estimate documents theanticipated costs to implement and operate the facilities or equipmentrequired by the alternative.

1) The synthetic approach: A synthetic (or detailed) cost estimatecreates a taxonomy of all the materials, labour, and effort ofevery kind needed to implement, supply, operate and maintainthe facilities or equipment and the estimated cost for eachtime period, is the sum of all these costs, plus a contingencycost, often 10%, to account for the inevitable neglect of someneeded elements. It is better practice to provide only onecontingency cost than to over estimate every item.

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2) The Analogue Approach: The analogue approach involves comparingthe alternative to a previous one with known costs, correctingfor differences.

B) The next part of an economic analysis is a benefit estimate for eachalternative. This is often an estimate of cost savings that thealternative will provide relative to an on going operation.

After costs and benefits have been separately documented for all thealternatives, the documentation for ‘evaluation of alternatives isstraight forward.

Economic assumptions (Like MARR), economic lives, planning horizons,tax treatments, risk are stated and Engineering economy calculation,are performed and reported.

Sensitivity analysis calculations are performed a reported. Finally,an economy analysis documents conclusions in the form of definiterecommendations or selection.

SCARCITY

All economic questions arise from the fundamental fact of scarcity –Scarcity means that wants exceed resources. Human wants are effectivelyunlimited but the sources available to satisfy than are finite.

Economic activity is what people do to cope with scarcity. Scarcity forcespeople to make choices. Making the best choice possible from what isavailable is called optimizing. In order to make the best possible choice,a person weighs the costs and benefits of the alternatives.

Opportunity cost is the cost of one choice in terms of the best forgonealternative. The opportunity cost of any action is the best alternativeaction tht could have been undertaken with place. Attending class insteadof staying in bed has an opportunity cost. The cost of one hour of rest.

Scarcity forces people to compete with each other for scarcity resources.People may cooperate in certain areas, but all economic activity ultimatelyresults ,in competition among individuals acting along or in groups.

THE ECONOMY

The economy is a mechanism that allocates scarce resources among competing

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uses, determining what, how, and for whom the various goods and serviceswill be produced.

The economy’s working parts are divided into the categories: decisionmakers and coordination mechanism. Economic decision makers are house holdsfirms and governments. Households decide how much of their factors ofproduction to sell to firms and government, and what goods and services tobuy from firms. Firms decide what factors of production to hire and whichgoods and services to produce. Governments decide on the scale of purchasesof factors of production from households and of goods and services fromfirms. They also decide on the scale of provision of goods and services tohouseholds and firms, as well as on the rates of benefits and subsidies andtaxes.

OPPORTUNITY COST

The opportunity cost of any action is the best alternative action forgone.The opportunity cost of acquiring one good is equivalent to the amount ofanother good that must be given up. The opportunity cost of a goodincreases as the quantity of it produced increases.

Ecology and Economics derive from the same Greek root, “Oikos” meanshousehold. The Sciences deal with the study of the laws and theinteractions among our greater household, namely, the ecosphere.

Ecology and Economics deal with production and distribution of valuableresources among complex net works of producers and consumers. Energy andmaterial transofmrations underlie all these processes, and therefore bothecology and economics must comply with the fundamental constraints imposedby thermodynamics. Ecology and Economics have had relatively littlecontact.

Economic activity, by its nature, dials with production under constraints,otherwise the economic problem would not arise. Each society faces adifferent set of constraints, determined by its natural setting, resourceendowment, labour organization, technology and social structure as a whole.

These constraints are not fixed, they are in a process of constant changeand evolve alongwith the rest of the society. Human economics areexperiencing a transition from “cow boy” to “spaceship” economics,according to building’s classific analogy. Thus a different set ofconstraints, arising from the composition and structure of the biosphere

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are becoming crucial to the future humanity demand.

Figure.

HOW SENSITIVITY ANALYSIS CAN BE IMPROVED?MEASURES TO BE TAKEN

Today housing industry has become synonymous with the word corruption whichis mainly due to the discretionary and arbitrary powers of officials andagencies involved in this sector as well as due to ambiguous and obsoleterules and regulations.

All that housing industry demands is devolution of power, a level playingfield, rules which are simple to apply and simple to implement andapplicable to all uniformly with out discretion and formulation of longterm policies.

Therefore it has now become imperative to take following measuresimmediately.

a) Restructuring of concerned departments.

b) Updating existing building bylaws, zoning regulations.

c) Thorough re-evaluation of land allotment policy.

d) Price indexing of construction material and labour.

e) Implementation of National Housing Policy in its true spirit andletter.

f) Long term planning for low cost housing to reduce housing shortagein the country.

g) Incentive for private sector to mobilize its resources in terms offinance, management skill, man power and good will etc.

Research and development being done in the field f low-cost housing indifferent areas be shared.

Short comings was owing to various factors including high cost of

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construction material, shortage of skilled workers, unavailability ofsuitable land etc.

Special attention needs to be given to the low income and middle classpeople, because the housing problems would greatly affect these two people.

Development of appropriate technology would reduce construction cost as itwould replace the costly conventional items; like doors, windows, roof,slabs etc., and reduce the labour expenses.

In Pakistan, there were around 19.54 M houses for the country’s over 131million people bringing the occupancy rate at 6.55 persons per house,which, according to the international standards is very high and consideredto be over crowding.

Shortage of houses in the country was around 6.25 million and the presentlyover 580,000 housing units were required annually. Surveys had showed thatlow income communities usually tend in short life or kutcha structures (75%in rural and 45% in urban areas)’ while 19% of the houses were of semipucca construction and around 36% in urban, 6% in rural areas houses wereof pucca construction.

The feasibility of material he assessed by using them in pilot projectshaving size of 500 to 1000 housing units, so that their commercialapplication may be examined.

Country is full of natural resources and what was needed was to tap theseresources and find ways and means to use these for the benefit of the poormasses by providing them low cost housing.

Earlier, Tasneem Ahmad Siddique shared his experiences regardinghis scheme “KHUD-KI-BASTI”, which was very successful scheme.

The last “MERA GHAR Housing Scheme”, launched with much fanfare in4-major cities by Pakistan Housing Authority has failed to make anynote worthy headway. Initiated by the PML (N) Government andrenamed by the present regime as the “PHA Housing Scheme” exceptfor Islamabad, it has failed to generate any positive response withonly a small proportions of the flats having been plucked ;up. Itis the high cost of the units that has been responsible for theirpoor response.

The present government which intends to make cheap houses available to low

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income people would do well to first study the causes of the failure ofsuch schemes in past before it initiates any plan.

Project Evaluation may, indeed, he systematized. To evaluate the ultimatecommercial feasibility of proposed new projects.

HOW SENSITIVITY ANALYSIS CAN BE IMPROVED?

Took two different prices of foreign exchange and three for labour. It willbe discovered that the project was almost completely insensitive toassumptions about different costs of foreign exchange and of labour.

Benefit cost ratio was high, this additional information increased theconfidence in the project. It can be assumed about labour and foreignexchange costs by reasonable amounts, the projects still remained clearlyprofitable.

Costs tend to be rather more concrete than benefits because there are to beincurred in the near future. The comparison with the current costs of doingsimilar things keeps us tied to reality.

CONCLUSIONProject analysis is a must before the commencement of any project. Carefulproject analysis will point out unrealistic or questionable assumptions andindicative ways in which a project can be modified to improve its wealthgenerating capacity or to increase the non-economic or non-quantifiablevalue which have we expect to gain from it. A project carefully analysedand revised in the light of this analysis has a much improved chance ofbeing implemented on time and of yielding the benefits we seek.

Project evaluation is a must before the commencement of any project.Economic and financial analysis provides a frame work within which allaspects of a proposed project can be evaluated in a coordinated; systematicmanner. The various types of tests discussed in the report are a means tothis evaluation. Through a careful analysis of the proposed project, onecan bring to light its merits and demerits. The recognition of demerits isa special importance at this time; as it would be smch easier to tie up allthe loose ends before the project is actually implemented. This is turnwould save a lot of money and energy that would otherwise have been wested;

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had the draw backs become obvious after the project had been completed.

Thus a project carefully analyzed in the light of the analysis done by theuse of tests has a much improved chance of being implemented on time and ofyielding the benefits we seek.

The Standard Concept of the Economic Process

STEPS IN ENGINEER ECONOMIC DECISION MAKING

Recognize the need for an economic analysis:

1. Formulate the decision problem. What are we trying to decide? What isgiven, and what is out of the question?

2. Establish criteria for estimating and evaluating consequences.

3. Generate alternatives.

4. Establish technical understanding of alternatives.

5. Estimate consequences of alternatives (cost and benefits).

6. Select the preferred alternative.

7. Perform sensitivity analysis; return to step 6 if necessary prepare toobtain ratifications and seek approvals.

8. Document and communicate the decision and its justification; advocateor implement the decision.

Note:

Construction manager decides when to start an excavation knowingthat a late start will avoid some construction loan interestpayments but will risk delaying the entire project.

In Engineering Economy: Cost and benefits are seen in terms of cashflows. A monetary receipt is a positive cash flow.

A monetary disbursement is a negative cash flow. A prospect or opportunityhas a worth measured as the size (amount) of a monitary receipt to what it

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is considered equivalent. {“Equivalent” means desired to the same degree).

SOCIAL ANALYSIS

Social analysis encompass the past, present and future proliferating socialtrends which took notice of the projects workability in terms of progress,pace and pecularity of the purpose Social analysis for economic policies isevil necessity but unfortunately a predictable prophecy can not be held acertain account.

Social aspects of a project are equally important to analyze beforefinalizing the projects implementation. These non quantifiable benefits orout comes of any project have gained wide spread importance in the recentyears. These social benefits or out comes help improve the peoplesenvironment and hence have to be given due consideration especially to thegovernments.

Cost benefits and cost effectiveness analysis in the social analysisprogram in the world of business, where costs are constantly compared withthe profits.

Eq.1: A computer company may be concerned with the relationship ofcosts to profits of making micro computers compatible with those of amajor competitor.

Eq.2: A small restaurant owner is concerned with whether to providedinner music or promote a “happy hour” in order to increase profits.

Evaluators undertaking cost benefit or cost effectiveness analysis ofsocial interventions must be aware of the particular issued involved inapplying efficiency analysis to their particular field, as well as thelimitations that characterize the use of cost benefit and costeffectiveness analysis in general.

____Chapter - 4

SOLUTIONS, RECOMMENDATIONS

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AND CONCLUSIONS

4.1 HOW COST CAN BE REDUCED

For which of you, intending to build a tower, sitteth not downfirst, and counteth the cost, whether he have sufficient to finishit? Lest haply, after he bath laid the foundations, and is not ableto finish it, all that behold it, begin to mock him, saying, thisman began to build, and was not able to finishLuke 14 vs 28-30

As in the apostle Luke’s time, almost all buildings proposed today have tocomply with a budget and the tightness or otherwise of this budget willdepend upon many factors. Normally the principal one will be theavailability of funds to the client and, in most cases, the return oncapital invested There are, of course, buildings provided on a social basis(usually funded by central or local government, for example schools andhospitals which do not provide a return on investment in any tangiblesense; here the technique of cost-benefit analysis can be used to ascertainthe ‘worth’ of such buildings and also to compare the advantages inmonetary terms of two essentially different projects.

One of the most. common techniques that, the design team will employ toensure the best value for money in the building will be that

Known as cost planning. Cost planning is the process by which projects canbe costed at the design stage in such a way that a clear statement of thevarious issues is provided showing the cost implications of the differentcourses of action open to the design team.

The design team will be concerned with considering various alternativeswhich can have an impact on cost. It will analyse the initial cost and therunning costs and the different solutions for producing the same buildingat lower cost. It could also extend its role to considering whether adifferent building which would produce greater returns employing the sameresources should be built instead.

Cost control in building is necessary not only to ensure that the totalexpenditure is kept within the amount agreed by the client in the early

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stages of the design process, but also to ensure that the client obtainsgood value for money and that the funds are distributed between the variousparts of the building in a balanced and logical way. Good value for moneymeans a well constructed, workable, and aesthetically pleasing building.The design team must look at the total cost of building projects and not besimply concerned with the initial capital cost. The running and maintenancecosts of the building throughout its projected life or capital returnperiod must be considered despite the difficulty of this exercise.

Too often economics are allowed to become the prime determinant ofbuildings and the built results are all around us giving evidence of this.It is usually the design team who gets the blame when so often it has beenthe penny pinching requirements of the clients that have forced the designteam’s hand into producing mundane buildings that provide much lesspleasure to their users and viewers. The same client who recognizes thatquality in clothes, cars, and similar items costs more, can impose budgetsfor his buildings that bear little or not respect to the requirement ofquality.

In many cases, especially where public funds are involved, only the initialcost concerns the instigator of the project, the subsequent running andmaintenance costs being ignored until only a few years later these returnto haunt those concerned.

Initial cost is usually the first thing that is forgotten about a building.Nevertheless, it is up to the design team to produce the building withinthe reasonable economic constraints that have been imposed. Simplicity ofdesign has already been mentioned as the principal way of achieving thisand designs should reflect it in their planning, form, shape, structure,choice of materials, and components, as well as in the servicesinstallations.

Planning should be straightforward and should be contained whereverpossible in a simple shape, square or rectangular shapes are moreeconomical to build than more complex shapes such as the ‘L’ or ‘T’crucifix, star, circular, or free. Again, the nearer to square that therectangular shape is, the more economical it is because of the lower ratioof external wall area to plan area. Thus the maximum floor area can beachieved for the minimum cost in buildings where a square plan is adopted.Of course the minimum external wall to floor ratio will be achieved with acircular plan but circles are expensive to construct and thus any saving inwall area is quickly lost in the complexity of the construction.

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The height of building will have considerable impact on its form and alsoon the cost. In domestic buildings it is usually found that the traditionalheight for the locality proves to be the most economic because of thefamiliarity of the building team with the construction and working method.Thus whilst trwo storey houses usually prove to be the most economic, wherethe tradition is of single storey dwellings, these prove to be the moreeconomic.

That having been said, two storey buildings for other uses tend to be moreepensive than single-storey. A comparison can be made between a singlestorey square building 10m 10 m and a wo storey building 16.33 mm 3 mboth giving room2 of floor space. The latter building could cost as much as26 per cent more than the former.

For buildings to function properly the plan shape will be determined by useand certain plan shapes and sizes have developed that balance economics andfunction.

Circulation space is expensive but cannot be dispensed with the here Seeleysuggests that providing this does not exceed about 19 per cent of grossfloor area in offices and 21 per cent in four storey flats these buildingswill not suffer from an uneconomic excess of this type of space.

The most economic height of buildings other than houses depends upon anumber of different factors, mainly construction/structure, servicesinstallations, and vertical transportation. Generally cost increases fairlyrapidly as the number of storeys increases over about three. Now-a-daysfour storey buildings usually require lifts/and escalators, constructionbecomes more complex both in its design and its execution (framedstructures usually being employed rather than one incorporating walls andpartitions which provide a dual function of enclosure and load bearings),fire precautions become more complex and services installations are moreelaborate. As the height of a building increases there are definite pointswhere the costs rise rapidly. These are where the structural method has tochange (as at the point where a frame is needed rather than load bearingwalls); where the foundations have to change from pad or strip to ple;where first and subsequent lifts are required (in flats one lift isrequired in a four storey building and a second at seven-storeys); whereadditional fire protection and fire-fighting equipment are needed; wherethe more sophisticated services and structure require additionalconsultants to be added to the design team, and where more expensive plant(for example, tower cranes) are required for the construction. As the

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height of a building increases a greater proportion of the floor area istaken up with circulation, structure, and services. In addition,maintenance costs usually ,increase with height.

As with plans, the form of a building has as great an impact upon theeconomics as does the shape of the component parts. Simple cubes andrectangular prisms are the most economic forms (but not necessarily themore desirable aesthetically. This is because construction is easier asalmost all materials and components come in rectoliner shapes or aredesigned for use with rectolinear shapes. Even plastic materials such asconcrete require form-work which is easier to provide for rectoliner shapesthan for either curved or free shapes. There are, of course, exceptionssuch as tensile structures clad in thin membranes or sprayed concrete butthese rarely prove to be economic except for some special structures suchas sports stadiums. Square and rectangular shapes for components usuallyprove to be the most economic and, wherever possible, standard productsshould always be used. Specials can prove to be disproportionatelyexpensive and it is such a pity that, so often, standard buildingcomponents are poorly designed in themselves and give the impression thatthe design has been produced to suit the manufacturing machine rather thanthe other way around.

The construction of a building is usually more economic if it follows thetried and tested methods employed in that place for buildings of that type.New innovations in construction are, of course, necessary otherwise therewould be no progress. However, when it comes to economical building it iswise to let the other person do the experimenting and for the design teamonly to adopt it when the new methods or materials have been foundsatisfactory for their particular building type and in that locality.

Generally speaking, it is more economical to use walls and partitions asload-bearing elements on buildings up to three or four storeys. Forbuildings above this height a framed structure usually’ proves to be moreeconomic depending upon the use of the building. The answer to the questionof whether concrete or steel is mote economic for the frame tends to veryfrom country to country. In Europe including Britain concrete seems to hethe more economic whilst in the USA steel often proves to he better. On theother hand single-storey industrial buildings, in which large clear spacesare required, are invariably more economic if built using a steel frame;this is because of the speed of erection together with the fact that thesteel rarely needs any fire protection for this type of building.

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Any form of construction that requires a high degree of precision in itsexecution will invariably prove to be more costly - not only because of thetime factor and difficulty but also because of the chance of error and thecost of rectification in such errors were to occur. For this reason eventhe flat root, which according to all the other rules quoted hithertorelating to simplicity of form and shape should invariably prove to be moreeconomical than a pitched roof rarely proves to be the case, even in theinitial construction. The possible exception to this is in the ease ofsmall domestic garages and extensions to existing buildings where the roofconstruction could prove to be extremely complex if pitches wereincorporated that married up with the existing roof.

In buildings over one storey design teams should aid the construction byplanning wide open spaces, where structural obstructions in the form ofcolumns must be avoided, on the top floors whilst ensuring that theheaviest loading is on the ground floor or, at the very least, on the lowerfloors; this will simplify the structure and thus keep costs down.

The construction of the external envelope of a building, which is that partthat contributes most to the external aesthetic, needs carefulconsideration. Materials in common use in the locality will usually proveto be the cheapest but even within the general range choices will have tobe made. Even for the humble brick prices can vary by as much as a factorof 10 with the dearest rarely being the best or the cheapest being theworst. Many other factors such as colour, texture, strength, weathering,and soon will determine the choice of bricks rather than the cost. Theexternal envelope will have to take the full force of the climatic andenvironmental factors and if careful detailing and choice of materials doesnot take place the building will quickly deteriorate requiring considerableexpenditure over the years on maintenance, This may soon overtake, in costterms, any savings that were made at the time of building.

The energy consumption of buildings for heating or cooling amounts to avery large proportion of the total energy requirements of most developedcountries today.

Factors that affect the consumption of energy in buildings relate basicallyto whether the full implications of climatic design have been appreciatedand implemented so that the building is oriented in the best way and hasits openings properly located to minimize heat loss/gain etc. In additionthe envelope is required to provide a maximum of insulation against thisheat loss/gain (except in some regions where high diurnal temperature

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ranges exist. In addition to the correct choice of materials and theprovision of adequate insulation heat loss/gain can be affected by theshape of a building. Obviously the greater the ratio of external envelopeto floor area the greater will be the heat loss.

INTRODUCTION OF HOUSING PROJECT

These days Housing Industry is going through a very critical situation. Itis facing lots of problems and hurdles of multiple magnitude and has almostreached to stand still position.

After independence in 1947, the government policies and actions weredirected towards solving the housing crisis mainly through their own means.One of the early issues was the problem of refuges, who were pouring infrom India in large numbers. In much of its efforts, the government triedto provide land and housing through its own existing institutions withvirtually no support from the private sector.

A Ministry of Rehabilitation was formed in 1949 with the task of housingthe refugees and developing relocation projects. Later, the same ministrywas entrusted the responsibility of providing housing to low income groups,mostly in the prime cities of Karachi and Lahore.

This initiative was launched through the federal government as the localinstitutions were either non-existent or did not possess the institutionalcapacity for launching land development or housing schemes.

The governments contribution in housing continued to decline considerably.The National five year Development Plans, which are the key policydocuments clearly established this fact. For example, in the first FiveYear Plan (1955-60), the government allocated 10% of the public sectorfunds for housing while the same figure was reduced to a mere 5.1% in theSixth Plan.

With in the same frame work, the government planned to prepare the buildingplots complete with water supply, drainage, under ground sewerage androads. The construction of the house was left to the peoples resourceswhile the provision of building materials was to be facilitated by thegovernment. The plan also suggested the construction of new refugeescolonies and completion of those under construction. It also aimed to

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promote self help housing investment in housing was encouraged by the longterm credit facilities offered by the government and also directly throughthe Housing Building Finance Corporation.

However, the plan could not achieve its targets as housing was a capitalintensive exercise and the government had to balance it with other sectorexpenditures. Thus, only those projects could be launched which had a donorinput while the rest were kept pending. The displaced people’s township inKorangi, that was built in mid 1950’s is an example.

The shortcomings with min the First Five Year Plan were carried forwardinto the Second Five Year Plan (1960-65) to meet the requirement forhousing. The basic approach of the government remained the same. Despitethe fact that a large number of refugees from India and rural hinterlandhad move into the prime cities, the government still focused on directinputs. It resorted to direct expenditures such as construction of ;houses.

However, the plan could not meet the prescribed targets.

Evaluation of the Second Five Year Plan showed the increasing shortage ofthe housing settlements beyond the identified target within the plan. Thescarcity of the development of the developed land for housing, changes infamily trends towards and nuclear family system and the need of housing fordisplaced persons as well as general low income and public servants becameacute.

Vertical expansions was encouraged within the third year plan thecontribution of the private sector to land and housing development wasemphasized, as public funds were directed towards the development of thenew capitals of Islamabad and Dhakka.

However, it could not meet its targets since the country lacking a properlyelected local government structure. Also, government efforts largelyencouraged the private sector to enter into land and housing development.

TAX HOLIDAYS

Tax holidays at different levels of government were provided to investorsin the housing sector according to specially formed government regulations.With respect to private sector two aspects became conspicuous from thisattempt.

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Although the government promoted private sector involvement, it kept theland allocation prerogative to itself. With exception of land allotted tohousing societies, the distribution of land was undertaken by therespective government departments.

The following Five Year Plans emphasized on the strengthening the creditfacilities the HBFC was the only were also linked up with private sectorprojects for housing. The HBFC and other credit institutions, do nothowever, extend any help for the acquisition/purchase of land. It providescredit only to those who had a piece of land to be constructed. Besides thedocumentation and regulations procedures restricted the coverage of HBFC tothe settlements launched by the public sector only.

IMPLEMENTATION OF NATIONAL HOUSING POLICY

National Housing Policy was declared by the government in 1991 which coversmany aspects of housing sector. It clearly envisages that:

I) Housing shall be declared a Highest Priority sector in the nationaldevelopment plans.

II) The role of the Government in Housing shall primarily be:

to provide sites and services (like water, sewerage, electric,gas and road links)’

to provide credit

to ensure availability of building materials.

To promote housing finance institutions.

Where as actual construction of housing shall generally be left to theprivate sector.

Formulating and announcing the national policy on housing indeed is a goodsign as far as policy matter is concerned and it seems that it will boostprivate investment in housing sector. Needless to say that as far asimplementation of this policy is concerned there is no progress. Thoughhousing has been declared as highest priority but it is not reflected assuch in fiscal measures taken by various governments in recent past. Forexample:

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a) Construction material, though locally available, is heavily taxes.

b) Housing finance is available at very limited scale.

c) Allocation of funds for infra structure is not sufficient.

d) Conversion charges collected from the plot owners for change ofland use, which are solely meant to reinforce existinginfrastructure, are normally spent, on non-development expenses.

e) Property tax, betterment tax, motor vehicle tax conversion chargesand additional floor charges are directly or indirectly collectedby the provincial government, where as the maintenance ofinfrastructure facilities and distribution of services such asroads, water supply, sewerage and solid waste disposal system isresponsibility of the local government.

The Sixth Five Year Plan (1`983-1988) showed a decline in housing relatedinvestment. In the provincial allocations also, the funds for housing andland development reduced to a considerable extent.

The National Housing Policy of 1986 addressed several important issues.Rationalisation of allotment provisions was one such aspect previously suchprovisions, that existed for each province, had entirely different modes ofacquisition and development.

For instance, the Government of Baluchistan and the Capital Developmentauthority (CDA) did not follow any prescribed policy for the reservation ofresidential ,plots for the different categories of public and professionalgroups, whereas in NWFP no policy was prepared for the entire province. TheGovernment of Punjab followed a definite policy under Martial LawInstruction No. 23.

The government of Sindh also followed a policy under the Sindh allotment ofPlots ordinance, 1979. These ordinances streamlined the provisionalallocations of land to different public sector departments for housing.

Provincial Development ExpenditureGovernment of Sindh

(Rs. in Millions)

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Year Total ADP Percentage Housing Percentage

84-85 1677.00 100 389.341 23.21

85-86 2016.85 100 384.070 19.04

89-90 2702.00 100 605.169 22.39

90-91 3113.362 100 631.034 20.27

91-92 4235.552 100 733.117 17.03

92-93 4696.551 100 802.000 17.07

93-94 3271.74 100 365.094 11.16

94-95 13257.135 100 1201.332 9.06

95-96 14394.114 100 1251.301 8.60

8TH FIVE YEAR PLAN

According to extracts from 8th Five Year Plan report on ;housing andphysical planning, there is shortage of 6.25 M housing units in the countryand this shortage is pilling up at the rate of 150,000 units every year. By2020 this may reach to 10.0 M units. To bring this shortage to zero it isrequired to built 500,000 housing units every year for next 20 years.

Shortage of housing is increasingly alarmingly and if not met within aforeseeable future. It could pose a serious threat to social peace andsecurity and create a host of political and economical problems. There is,therefore, a strong case of assigning Highest Priority to this sector.

Besides, the cost of construction has virtually made the housing just adream for the majority of people in Pakistan. It is not out of place tomention that housing is major social indicator after food and clothing.

FINANCIAL MODEL OF AFFORDABLE HOUSING FOR LOW INCOME EOPLE

According to 8th Five Year Plan there is shortage of 6.25 Million housingunits in the country and this is increasing at the rate of 150,000 housingunits every year. Therefore in next 20 years this shortage would be about

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10.0 M housing Units. To overcome this shortage a 20 years strategy shouldbe chalked out, which means that at least 500,000 housing units should bebuilt every year. About 70% of this shortage lies in lower and lower middleincome group, mainly due to their lower affordability limit or financialconstraints.

Keeping in view the current back log of housing stock and its increasingdemand, the best possible solution is to go for low specification housingwith incremental approach concept. Cost of developed lands is always amajor component of housing unit, therefore housing for low income group isnot possible without really having a low cost land with initially bareminimum infrastructure facilities. Full services should be built as andwhen resources allow, on incremental approach.

As a conservative estimate one room unit of such type covering about 300sq.ft., on a 3-Marla plot costs about Rs. 180,000. This includes cost ofdeveloped plot, cost of construction, fixed overheads and contractorsprofit.

Presently loan on such type of housing unit is available at the rate of Rs.200/- per sq.ft. which comes about Rs. 60,000/- i.e., on 67 : 33 equitybasis. As a special consideration for low income people, if loan isprovided on 40 : 60 equity basis, the cost of one house can be distributedas under:

a) Cash component: Rs. 72,000/- payable in 30 months with initialsaving of Rs. 30,000/-, allottee will have to pay Rs. 1400/- permonth.

b) Loan component = Rs. 1,08,000/- plus markup payable in 20 years atthe rate of about Rs. 1`300/- per month.

On the basis of Rs. 180,000 per unit, total amount required for 500,000units will be Rs.30 billion per year for next 20 years to overcome presentbacklog of housing stock in the country.

An other Rs. 25 billion per year will be required for infra structurefacilities. Whereas according to Economic Survey Report 1996-97 fundscurrently being financed are 2.5 billion by HBFC and about 800 million byIHFL, Citi Bank and LTV jointly.

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It is not possible for any government in the world to provide this hugeamount in housing sector alone. This target can however be achieved byadopting an appropriate housing policy and devising ways and means toattract private sector contribution and mobilizing financial resources ofpeople through formation of housing bank, building societies and housingfinance institutes with proper legislation for the security of public aswell as loan giving agencies.

DECLARTION OF HOUSING AS AN INDUSTRY

The role of private sector in socio-economic development is of prime value.Without the help or facilities from the government, the private buildershave shouldered the responsibility for providing the housing on mass scaleto the shelter less, which primarily is a job of the government.

ABAD has been pursuing at different levels for recognition of Housing as anindustry so that this sector may be able to enjoy various facilities, whichare provided to other industries in the country such as:

Finance of housing projects by commercial banks; Reduction in electric tariff during construction. Tax holiday for housing projects in rural areas. Rebate in income tax on repayment of housing loans. Permission to import duty free desalination plants and generators

for residential projects etc.

IMPACT OF HOUSING INDUSTRY ON THE ECONOMY

Following table reveals the consumption of major materials and employmentof labourers for 430,000 units built annually with an average area of 800sq.ft. each.

Total Turn over 90 Rs. In Billion Cement 140 M. Tongs Steel 800,000 Tons Aggregate 1500 M.Cft. Bricks/Blocks 14 Billions Direct labourers employed 600m000 Hos/day

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Indirect labourers employed 400,000 Hos/day Estimated revenue to government

through direct and indirect taxation 35 Rs. In Billion

Estimated revenue through sale of plots 7 Rs. In Billion

Other materials such as aluminium, wiring, plumbing, material, sanitaryware, paints, furniture and fancy fittings etc., also contribute a lot ofnational economy due to activities in housing sector.

Similarly housing is the major consumer of utility services.

Table -

Sr.No.

Description 1981 1997

1. Population 5.4 M 13.0 M

2. Average Cost of Land

Rs. 500 perSyd.

Rs. 5000 perSyds.

3. Average Construction Cost

Rs. 60 perSq.ft.

Rs. 400 persq.ft.

4. Average Area Density

1500persons/sq.km

3600persons/sq.km

REVISION AND UNIFICATION OF TOWN PLANNING REGULATION LEGISLATION

Existing Town Planning Regulations in almost all cities are outdated.Growth of cities in dynamic in nature which requires constant revision andupdating of town planning and zoning regulation. Basic parameters forhousing and physical planning of cities as well as ground realities arechanging at very fast pace. These include:

a) Population and its growth rte.b) Available developed land.c) Financial resources.

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d) Available infrastructure facilities.e) Area density.f) Affordability of people due to increase in cost of land,

construction and infrastructure.g) Tendency of people to live near urban centers and close to their

communities etc.

NESPAK REPORT

According to a report compiled by the NESPAK group preparing an integratedmaster plan of Lahore, there is a backlog of 225,000 dwelling units in theprovincial metropolis.

The supply of housing, the report says, is lagging behind withaffordability being the crucial factor. At present the provision of shelterhas exclusively been taken over by private co-operative housing societies,but these are meant for middle and upper income groups. Low income groupsare left to find for themselves in katchi abadies or illegal landsubdivisions on the peripheries.

About 70% of the annual incremental housing demand is of low income groupswhich are neither served by LDA nor by private schemes.

BACKGROUND

Lahore has growth, the report says, around the walled city mainly and dueto physical constraints in the south, with a set of radial roads. Most ofthe land development schemes in Lahore have been prepared or undertaken bythe LDA and its predecessor, the Lahore Improvement Trust. The and mostlyis owned privately and urban expansion ;has been at the expense ofperipheral agricultural land.

Low density and ‘lea frog’ development of the city has resulted in high

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infra-structure costs. Furthermore provisions of public facilities in theseareas lag behind the requirements of the residents. The walled city todayface a multitude of problems which related to decay of urban form, lack ofopen spaces, inadequate maintenance, and a near to complete collapse of theutilities, built centuries ago.

The cost of land acquisition was reasonable till the late 60’s and LIT/LDAwere in a position to acquire land at market prices. The rise in land costsin the 70’s put the acquisition cost beyond the capacity of the developmentagencies. As a result the Punjab Acquisition of land (Housing) Act, 1973was passed which assisted the LDA in acquisition of private land at a fixedrte of Rs. 20,000 per acre. The land thus acquired was developed andsubdivided into plots of different sizes and uses.

The Act was repealed in 1986, with the restoration of the land Act, 1994,which stipulated the acquisition of land upon payment of market pricesthrough a time consuming procedure. This change brought an end to the landdevelopment process in the formal sector due to the high land costs in theopen market. From 1986 onwards no major housing schemes could be launchedby the LDA. Instead a large number of housing development schemes sponsoredby co-operative societies are at various stages of development under thesupervision of the LDA.

The sizes of the residential plots in LDA sponsored housing schemes havebeen gradually reduced from maximum of 33,340 sq.m to 418 sq.m (8 kanals to1 kanal) as land becomes more and more expensive. The emphasis in some ofthese development schemes has been on catering to the lower socio-economicsegment of the population. Even then, the low income groups can not affordthe smallest sized plots in the formal sector and resort to living inkatchi abadies and illegal subdivisions. The cooperative housing societies,too, do not supply developed plots for low income groups.

The historical growth of population indicates a yearly increase of around205,000 people. In other words, assuming the current household size ofseven persons, the annual demand for housing would be around 30,000dwelling units. In the absence of any new housing development since 1986 inthe formal sector, this increasing demand is adding to the housing backlog.The housing situation for the low income groups and rural migrants is bleakindeed.

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Land values in Lahore have increased by as much as 100 times in someinstances. For official purposes a comprehensive land values notificationwas issued by the Deputy Commissioner/Collector for various localities ofLahore in the Punjab Gazette on July 12, 1995. The land values given in thenotification for some areas have increased by 100% during the last threeyears. These land values have severely curtailed public developmentprogrammes while low income groups can not dream of land ownership with inthe city.

Land ownership in peripheral areas, which have the potential for beingurbanized in the near further, is in small fragmented ;holdings with amajority (69%) being of less than 4.8 ha (12 acres). This implies asituation where consolidation of land after acquisition will be a tediousjob as verification of ownership assumes prime importance.

In the past, various master plan studies have been undertaken by the localauthorities for guiding the city’s growth. These plans have been partlyimplemented. The factors which negatively affected plan implementationinclude financial limitations of the public sector; changes in thepolitical scenario affecting priorities; inadequate and ineffectivemechanism to control unauthorized developments; absence of a strong legalbase for plan implementation and duplication, over lapping of functions ofvarious agencies and lack of qualified and experienced professionals withthese agencies.

The prevailing urban density in Lahore varies significantly, with thehighest figure of more than 650 persons per hectare in central zones(walled city and its environs) and the lowest of less than 50 persons pethectare in outlying zone.

It may be mentioned here that the reported backlog of 225,000 housing unitsis despite the development of about a dozen housing schemes by the LDA.These schemes, involving over 100,000 plots include Allama Iqbal Town,Model Town Extension, Mustafa Town, Gulshan-e-Ravi, Tajpura, Shadman(Mental Hospital area), Data Nagar, Mohlanwal, Jauhar Town and Sabzazar.

Heavy machinery to remove debris, char ways for rescuing the injured,transporting them to the nearest medical center, development of medicalstaff, provision of enough medicines, providing immediate clothing and food

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and security of the property in the affected areas are of prime importancethat have, so far, not attracted the attention of our civic leaders.

Fortunately we have a large number of sympathetic people in the metropolisand some of the organizations like the Edhi Foundation have maintained aglorious record of public service.

When Bismillah Building collapsed quarter-a-century back, Maulana Edhi wasthe first person to arrive at the disaster site and provided relief withwhatever was available to him.

While the scientists have yet to invent a method to predict an earth-quake,an effective remedy left to us is to adopt measures that can reduce theeffects of this calamity and make our rescue efforts speedy.

Like all natural calamities, quakes are unavoidable, and when it becomes solet us not wait for learning the ways to bear the misery but learn tolessen its effect before it strikes.

AN ACCUTE SHORTAGE OF LOW-COST HOUSING IN THE CITY AND LED TDA MUSH-ROOM GROWTH OF KATCHI ABADIES ON GOVERNMENT AND PRIVATE LAND

Housing Shortage Gives Rise to Katchi Abadis in Lahore

The rapid increase in Lahore’s population during the last few years hasresulted in an acute shortage of low cost housing in the city and led to 9mush room growth of katchi abadies on government and private land.

Now with the cost of land in densely populated areas very high (up to Rs.200,000 per marla in some areas), land even in the katchi abadis, most ofthem along the rail tracks, has become attractive for people belonging tothe low income group and the salaried class. Real state business withrespect to these settlements involves dealing in transfer of possession asland in these areas is still non transferable.

Some of these settlements have been declared katchi abadis with grant ofproprietary rights to the occupants. But the case is different with theresidents of dwellings located on federal government land. There are only

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occupants and not owners of the land. Although their settlements arerecognized as katchi abadies by the LDA, they are still illegal occupantsin the eyes of federal government departments like the railways, the WAPDAetc. Once these departments decide to recover the land from the occupants,of which there are indications from the railways, it would be a major scaminvolving thousands of families.

According to a report of Katchi Abadies Directorate of the LahoreDevelopment Authority, as many as 80,000 families are living in 145 katchiabadis located in various parts of the city. About 26 of these settlementshave already been declared as katchi abadis while cases of 45 are stillpending with various government departments. At least 56 of thesesettlements are located on private land.

The government departments involved in katchi abadis affairs are the LDA,the Evacuee Trust Property Board, the Auqaf Department, the PakistanRailway, the MCL, the WAPDA, the National Guards, Health, Home, PublicWorks, Forest, Industries and settlement Departments and the Civil AviationAuthority.

Katchi abadis awaiting NOC include:.

Behari Colony (123 housing units railways). Gharib Nagar (105 units – MCL) Al-Madad Colony (560 Units – National Guards). Shuja Colony (430 Units – settlement, MCL). Awami Colony (924 units – Health). Begumpura Mahmoodabad (245 Units – Auqaf, Home). Saint Mary (177 Units – CAA). Henry Kay (350 Units – CAA). Gopal Nagar (450 Units – CAA). Ara Channan Din (1380 Units – CAA). They Zaildaran (950 Units – CAA). Mustafabad (370 Units – CAA).

Other major undeclared katchi abadis are: Dars Baray Mian. Jhuggian Railway Station.

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Esabad. Sansi Quarters. Majahid Colony. Iqbal Park. Mujahidabad. Tariqabad. Mian Mir Colony. Qurban Line. Abbas Nagar. Nusrat Colony. Sher Singh Road. Shamspura. Maqbara Morr. Manzoorabad, and Gujjarpura.

____BUIDING DREAMS IN THE DESERT SANDS

The land is so barren, the soil so dry – not even enough moisture to bindthe grains together - that the mere act of walking lifts the fine articlesinto the air in voluminous clouds. And should the wind be blowing ever soslightly or a vehicle passing in this flat expense devoid of trees, bushand grass, it kicks up an instant, dense fog!

For less than an hour we inhaled this dust, tasted it on our lips just asthe wretched of the earth have to day in and day out for indefinite yers oftheir lives. We now did not look too different from the residents who hadthe permanent appearance of those who had rolled in the dust.

Who would want to live in such a place? Only the poorest of the poor;those who earlier could barely scratch a living from the land they couldnever call their own? Those who live in huts that lasted only as long asdebts were tolerated or encouraged their share-cropper status? Only thosewho were refuges in their own country, fleeing from the countryside, thebounties of which were never shared equitably with them? Only those who

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could not find even the most miserable of shelter in heartless cities thatare interested only in services that create profit and not in theconditions of the ill paid, ill fed and shelterless poor who render them.

Yet this monotonous landscape of beige holds all the promise of a fruitfulfuture for the residents who moved in less than nine months aqo. It is aplace they can call their own – they have paid for it – and it boasts therequisite on which they can build, with which anything is possible – water.

Most of the breadwinners here earn his than a thousand rupees a month. someless than 500, with which to maintain an entire family. But all they had todo was put an unheard-of pittance of Rs. 460 cash down for occupancy, andpay a balance of less than Rs. 10,000 in tiny installments (from 50 to 110)spread over the next eight yers!

The charges sould impossible, but not only are they true, they reveal thepossible that has throughout been denied to the voiceless poor. Some mayeven question how such poor can be guaranteed continued ownership andcompanion facilities when all governments to date with vast funds at theirdisposal, have completely failed to do so – even for people who earnsalaries above Rs. 1000 up to Rs. 3000, or several such combined salariesfrom members of the same family?

This is a valid worry, since an intricate and entrenched network of land-grabbers, speculators, government functionaries and police have defeatedeven the best of intentions of many housing schemes for low-income groups.In this case, however, an experiment in Kotri, called the Gulshan-e-Shahbazhousing scheme by the Hyderabad Development Authority, has worked – so far!

It depends, as does an such scheme, on the integrity and firm adherence torealistic policy, of those at the helmy and their personal interest andinvolvement to see to it that their subordinates are not sabotage anything.Consequently it is working, and will continue to work unless HAD issuperceded by stronger and less-than-honourable powers and motivation.

There are reasons to fear for this scheme. Countless times before, the poorhave been brutally thrust aside and deprived of their right to the minimumshelter in the same breath that welfare and upliftment projects have beentrumpeted for them.

Pakistan’s sorry history of selective housing development bears this out.They failed because they did not look at “needs” through the eyes of the

37

needy but through the eyes of bureaucratic planners, with standards andattitudes for removed from the socio-economic and sociological realities ofthose whom they claimed to serve.

The earliest example is of the sixties in the first Martial law days when aslum clearance programme was introduced. It can be credited with partialsuccess – as an interim action response to an urgent problem – because therefugees who migrated from India gladly moved out of their makeshift“jhuggies” and hovels to the low cost but more solid, concrete quartersbuilt for them by the government.

It cost the latter heavily, for it was done with a huge international loan,and the house owners were supposed to have repaid the cost in smallinstallments. Today, twenty five years later, most of the Korangi projectdebt of Rs. 189.2 million, remains unpaid. Rs. 116.5 remains unrecovered,and it is doubtful it will ever be.

But the motives behind it were all wrong too. To remove the “Jhuggi”eyesore from prime land in the center of the city along with pacifying apolitically volatile group who had come away losing all because of thecreation of a separate country for Muslims. Affordability and practicalitywere never the hallmarks of the plan; nor were they of the other housingschemes that were to follow, purportedly for the poor.

A NEW STRATEGY TO DEAL WITH THE CONTINUEDGROWTH OF SLUMS IN PAKISTAN

Like other developing countries hyper urbanization in Pakistan during thelast 30-35 years has been an unprecedented phenomenon. Unfortunately rapidurban growth in almost all developing countries has been associated withpathological growth of urban slums. This is not to say that we areunderplaying the problems of unemployment, crime, traffic congestion,pollution and lack of basic civic services like water, sewerage,electricity, transport and facilities for education, health andentertainment.

It is very intriguing that inspite of all government efforts to stop thisphenomenon and inspite of evolution and application of new alternativestrategies for development, both by national and international agencies,urban slums continue to proliferate with each passing day.

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Why has this mass migration and exodus of topic historic proportions takenplace? What are its determinants and context, its reasons, causes?

Paul Harrison in this book “Inside The Third World” while describing theplight of the urban poor has very aptly remarked. “Migration is a symptomof rural poverty and of urban privilege”. The lead cannot provide the ruralpoor with a job, so migration is most cases is like a plea for employment,courageous expression of the willingness to work more than the poor soil orthe unjust society of the home area will allow them to. It is not easy tomigrate, through. For most people it means going into exite, leaving thesupportive network of the extended family. It is a last resort, when allhave failed

Continued growth of urban slums has become a fact of life with us, and willbe so till our cities reach the saturation point….. or burst at the seams.In the foreseeable future this trend cannot be stopped , alternate orreverse, notwithstanding all high pitched stoganooring and empty rhtorics.Reason “political priories manifested through economic strategies are theroot cause, rural to urban migration the observed malady. Since structuralchanges followed by a turn around in the economic development strategycannot be brought about, our priorities will not change and the landless,near landless, unemployed and underemployed people from the rural areaswill continue to migrate to the big cities and slums will keep on growingor expanding.

But, then how to meet their housing needs? Should we allow them to squatwherever they like and in whatever manner they like and make theamelioration plans for them afterwards? Or, should the government meettheir shelter needs on their arrival in the cities by providing them withbare necessities and keep on improving their living conditions with theircooperation and participation gradually?

On this short paper we have tried to make an in depth study of thephenomenon of continued growth of squatters slums (or katchi abadies as wefondly call them) and reasons for government failure in controlling themfrom a slightly different angle.

We have also tried to analyse public policies for sheltering the urban poorfocusing on their short-coming and pitfalls. Having done that, an attempthas been made to explore the problem further keeping in view thesociological and economic factors like income distribution in Pakistan,rate of saving, cost of housing and the problems connected with the

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immediacy of need in having a shelter in big cities like Karachi andHyderabad.

The second portion of this paper suggests an alternative strategy forsheltering the urban poor at affordable prices and without any timelagbetween allotment and possession of land with basic necessities of life. Itgives the details of successful housing project started by HAD to meet theimmediate housing need of the poorer sections of our society.

It is hoped that this short paper will provide useful guidelines to thosedevelopment practioners, planners, sociologists, community workers, andofficials belonging to the national and international agencies who areinterested in finding out a long term, low-cost and meaningful solution ofthis massive and complicated problems at micro level.

INTRODUCTIONUrbanization is world-wide phenomenon. During the last 200 years, the paceof urbanization has accelerated to the extent that today we are on thethreshold of living in a world that is numerically more urban than rural.It has been estimated that by the turn of the century, the majority ofworld’s population will be living in the urban rather than rural places.This rapid transformation form a rural to a heavily urbanized world oftoday and the consequent development has a way of life have been far moredramatic spectacular and the population explosion itself.

Migration for work is accelerating in the Third World. Some of it floodstowards cities. A few migrants may be following some vague dream of the bigcity and sophisticated lifestyle. The majority are driven by thenecessities of survival.

Here, we need not go into the contexts and determinants of immigration nordo we intend to concentrate on policies and programs which influencemigration from rural areas to the cities. This is a separate subject andneeds a detailed study.

The intention here is to look at the policies both government and privatewhich have been tried from time to time to solve the housing problem of theurban poor and reasons for their failure, and try to find out what can bethe long term, low-cost, practical solution of this massive problem.

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A study of the income distribution in Pakistan is necessary because theeffective demand for housing in static terms is a function of income levelsand the price of housing (and other goods)

Per capita income and its distribution among house holds along with theprice of housing establish the amount of housing that a particular familycan afford. Over time, demand is determined by increases in family income,changes in the distribution of income, and the rate of household formation,which in turn depends upon population growth and the size of households.

According to survey data collected by Karachi Development Authority in1974, 80% households in Karachi had an income of Rs. 500 or less, 14%earned Rs. 500 to 2,000 and only 6% families earned more than Rs, 1,000/-per month which is bare minimum for a family of seven persons.

It is pertinent to note that according to these sources, the rate ofunemployment in Karachi is over 15 %. This rate is as high 20% in low-income areas. Reliable data for under-employment and seasonal unemploymentis not available but keeping in view the high unemployment rate thesefigures can be well imagined.

It is also interesting to know that low-income households spendapproximately 70% of their income on food and clothing.

Juxtaposoed with an income of Rs. 1000/- or loss per month, the price ofhousing in cities like Karachi, Lahore and Hyderabad is just beyond thereach of poorer sections of our society. Even in the low-cost housingschemes which are announced with big fanfare, houses constructed on plotsof 80sq. yds cost around Rs. 50,000/- and in most cases down payment wouldbe at least Rs. 10,000/-

Similarly a fully serviced plot of 120 sq. yds would cost between 30,000 –50,000 (depending upon the locality), and a small two-room that would costnot less than Rs. 125,000/-. It may be noted here that on government pricesplots/flats are not available to every purchaser because for every plotthere would be about 100 applicants in Karachi and 15 at Hyderabad, toquote the example of two cities.

As the demand is always more than the supply (because of the huge housingbacklog, natural growth, and high rate of rural to urban migration) marketmechanism keeps pursing up the prices and in most cases poor people with anincome of Rs. 1,000/- or less per month cannot even think of buying a plot

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of land, what to talk of constructing a house for their family. Hence thecontinued growth of squatter colonies or katchi abadis inspite of allefforts by the government agencies to control their establishment.

It is important to note that the timelog between allotment of plots andactual development is generally between 5 to 10 years. Immediate housingneeds of the poorer sections of the society, therefore, cannot be met andthey are forced to look for plots also where as in most cases they cannotpostpone their shelter needs for such a long time.

It is necessary to see the condition of the urban poor before we discusstheir housing problem:

About 40% live in squatter slums. 75% of them get drinking water from the community taps, 10% from

rivers, ponds, etc. 30 to 40% of them are underemployed or unemployed. 60 to 70% of them cannot afford housing not even public housing. 4-5 persons live in one room, Sewerage services do not exist for 90% of them in cities like

Karachi or Lahore. They have to waste 3-4 hours daily in commuting to work and back. Facilities for health, recreation, education for their children

barely exists. They are the barely worst sufferers of all the natural calamities,

(rain, tornados, floods, cyclones).

In spite of elaborate studies by national an international agencies andexperts, and inspite of evolution and application of new and alternativestrategies for development, the problem of slums continue to grow. Why doesit happen? What are its causes?

Can we say that the cause for the continued growth of squatter colonies isthat the government response to shelter needs of the urban poor is notcompitable with their sociology and economics?

It is a fact that all urban housing policies are natively conceived and(willingly or unwillingly) tend to ignore the needs of the poorer sectionsof the society.

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While discussing housing policies for the urban poor we will concentrate onthe following criteria because the success or failure of any housing policydepends on them:

a) Targetingb) Affordabilityc) Policies & procedure for allotments.d) Timelag between allotments and actual development of fully servicedplots.

Let us now take a detailed look at government policies which were used fortackling this problem from time to time to find an answer to theseimportant questions.

GOVERNEMNT RESPONSE LOW COST BUILT-UP UNITSExample: Landi, Korangi colonies in Karachi of the early sixties.

This re-settlement scheme launched in Karachi with great fanfare in theearly period of first Martial Law had the following important features:

1. Government had build a large number of low-cost quarters from isown resources and by raising an international loan.

2. Cost of quarters was repayable by the allottees in easyinstallments.

3. This was basically a slum clearance programme as the refugeescoming from India and occupied whatever open land in the city theycould lay their hands on. The jhuggi-dwellers were not onlyperceived to be a nuisance in the then clean city of Karachi but atthat time they were a politically volatile group and something hadto be done to pacify them. Schemes like this were also thought tobe necessary to create a reformist image for the military regime.

4. The scheme was fairly successful as in a short time large numberof low-cost units were built and the jhuggi dwellers willinglyoccupied the houses which provide them batter living conditionswith certainly of title. But it had its own problems.

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PROBLEMS: No government can provide housing at its own cost to everyshelterless person even it loans from national and international agenciesare arranged. Experience has shown that recovery percentage is dismisllylow. In the area of Korangi out of an investment of Rs. 189.2 million, Rs.116.5 million have still not been recovered from the allottees even after25 years.

PROVIDING LAND WITH URBAN FACILTIES:Example: Metroville Projects in Karachi.

Under these projects land was developed by official agencies and put up fordirect sale to low income groups. The system of providing loans wasdispensed with.

PROBLEMS:

Cost of land with all services was too high for low-income groups. Peoplebelonging to the affluent middle class ultimately grabbed these plots,because they could afford to pay high prices. Since of them purchased twoadjacent plots, demolished the boundary walls and constructed a biggerhouse. It official controls are made stiffer, these projects will lie emptyfor year together (as happened in the case of Karachi Metroville Projects).Here 4,144 plots remained unconstructed for a number of years, while inOrangi 60,000 families started living in the same vicinity in the sameperiod. When controls were relaxed in Metrovillos, construction activitystarted but the target group was elbowed out.

TO OVERCOME THE FINANCIAL PROBLEM THE STATE TURNSExample: Shah Latif, Surjad Schemes in Karachi and Qasimabad, Gulshan-e-Shahbaz in Hyderabad (schemes deigned for low income groups).

Under method projects are announced before they are physically commencedand the public is asked to apply for a plot with advance payment. Thissystem is now in vogue in most of the cities of Pakistan and thedevelopment authorities amass huge sums of money and keep them infixeddeposits or use them in other projects after collecting money from thegeneral public. In some of the cases the actual development may take 10 t015 years.

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Sites and services methods is now being generally used in Pakistan. Butapart from other problems, this method of providing plots has two severelimitations:

a) In view of the huge backing in housing (specially for the urbanpoor), these plots will always be in short supply resulting inspeculation and rise in prices prohibiting the genuine buyers frompoor sections of the society from buying these plots from the openmarket.

b) Allottees/buyers generally do not purchase these plots forhabitation. The plots are used as (i) a sound investment and (ii)as a cushion against galloping inflation. Plots are also purchasedfor providing cash to meet the unforeseen events and also as longterm investment for marriage expenses of children, specially girls.

OTHER PROBLESM:

These include

a) Cost of too high. Poor people with a monthly income of Rs. 1,000/-or less cannot afford to pay 25% of the total cost which is usuallydemanded with the application.

b) It does not cater to the needs of low-income groups speciallybecause of a big timelag as already discussed.

c) To get a plot, people must apply for it, till a set of forms andfullfil series of formalities. Given unequal relationship betweenthe government and the people (specially the poor and theilliterate) & given the time wasted in bureaucratic redtapism, evenif they are willing to wait for years the poor cannot and do notapply for these plots.

d) Even if they cross all the hurdles, it is not necessary that theyget a plot. Number of applications always far exceeds the number ofplots available in most cases successful allottees are investorsand speculators.

PRIVATE SECTORAlmost the same story is repeated with the additional problem that in somecases the developers disappear after collecting money from the purchasers.

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Bombay Town, Madina Town in Hub area and several other schemes in Karachiare examples in this sector. The private developers no doubt cater to theneeds of the middle income group but the poorer sections of the societyremain out of their purview as the smallest flat would cost around Rs.125,000/-. Similarly a fully serviced plot of 120 sq yds would cost aroundRs. 50,000.

Timelag between allotment and actual development of plots is even more inprivate sector as compared to the government development authorities.Scheme like Saadi Town, Roomi Town etc. in Karachi are examples of thissort. Plots have not been fully developed even after 12 years ofallotment/sale.

Even in low-cost built-up unit schemes about which have recently beenannounced with fanfare, houses constructed on plots of 70 sq. yds wouldcost between 45 to 50 thousand rupees and in most of the cases the downpayment would be around Rs. 10,000/-. In these schemes external developmentis done by government agencies which may take 5 to 10 years. In most of thecases the supervision and the quality of construction is poor causinginnumerable difficulties to the purchasers.

Joint ventures the Zonal plan Scheme of HAD have also failed because of:

a) Poor standard of work by private developers.b) Delay in generating the funds.c) Port supervision by HAD staff.d) Lack of coordination between different government agencies.

CO-OPERATIVE EFFORTIn Pakistan (specially in Sindh) the performance of cooperative movementsis very poor but in the housing sector they have catered to the needs ofmiddle income and higher income group to some extent. However, in most ofthe cooperative housing schemes, poor management, difficulties incollecting installments from the allottees, lack of coordination betweendifferent government departments, abnormal delays, embezzlement of funds bysociety office bearers are some of the chronic problems. Scheme No. 33 inKarachi is a sad story and the dream of purchasers remains unfulfilled evenafter 25 years. Similar difficulties were faced by Sukkur CooperativeHousing Societies Union where the entire scheme remained dormant for about20 years before its major problems could be solved.

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Having realized that they cannot give/provide regularized land with urbanservices at an affordable price to the poor, the state has accepted thekatchi abadis/squatters colonies as a reality and initiated the process ofregularizing and upgrading them.

KATCHI ABADIS :SQUATTER SETTLEMENTSThe Katchi abadies can be divided into two broad categories:

Old Katchi Abadies

These abadies had three important characteristics:

a) The were mostly located right in the heart of city.

b) Growth was haphazard

c) They had no regular plans; streets were narrow; space for schools,mosques play grounds etc, did not exist.

PROBLEMS:

These include

1) Different surveys show that in the upgrading process 20 to 25% ofthe population is dislocated. The state has to provide them withalternate land at the same cost at which the squatters are beingregularized.

2) Once squatters know that a katchi abadi has been taken up forimprovement/regularization, they show little or no interest ingetting houses. They feel secured so far as land title isconcerned.

3) Regularization charges are quite high. All cannot afford to pay.Payment in installments in a complex and expensive process, so isacquiring the lease. The squatter has to visit several governmentagencies including the registration office and may have to waste 10to 15 days, over a period of 3 to 4 months. For a daily wageearner, it is a very difficult exercise it not an impossible one.He may also be subjected to hostility and institutionalizednegativism at the hands of government functionaries and may have topay illegal gratification at various stages.

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Baldia Town in Karachi is an example for this sort. Decision was taken in1977 to regularize this township; actual work started in 1981 and sincethen not even 10% plots have been regularized.

New Katchi Abadis

Given the failure of government agencies, people have to find ways andmeans to over come their housing problems. The new katchi abadis which havebeen established in different parts of Karachi and Hyderabad are a solutionof the problem by the informal sector.

These New Katchi Abadis have the following characteristics:

1. They are generally located on the periphery of the city.

2. They are planned on the grid iron (official planning regulationswill have little quarrel with their town plans)

3. Modern technology is used in construction.

4. Water is made available either on payment or through civicagencies.

5. Transport needs are also taken care of.

6. The cost is affordable even by the poorer section of thepopulation. In some case no profit is charged because somecommercial plots are kept in reserve for disposal at highcommercial rates to subsidize the development cost of smallerresidential plots.

7. Technical advice for construction and sanitary problem is alsoprovided

8. Immediate concession is handed over to the purchasers with littleor no paper work.

9. Credit is also made available in cash and in kind, if needed.

10. Availability of artisonal skills is also assured.

11. Protection from eviction in 90% cases is guaranteed as thesedevelopers or ‘dallas’ as we may call them, have a very closeliaison with police and government agencies.

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Is it not surprising that government cannot meet of the needs stated abovewith all the power at It’s command?

Over a period of time, these developers/’dallals’ become important andstrong politically as they are influential people of their areas and can beused as a vote getting machines through influence they manage to get civicamenities for these squatter colonies from civic agencies (in some caseswithout payment).

PROBLEMS:

These new abadis face three major problems:

1) They cannot manage to have bulk sewerage disposal system as itrequires huge financial outlays and complicated techniques.

2) Although there is no imminent threat of eviction but the title ofland remains a major issue as these people grab either governmentor private land without paying any amount to the owners. Withouttitle papers getting loan form HBFC or selling the plot posesproblems.

3) External roads are not developed as huge amounts are required forthis purpose and government agencies refuse to take up this workbecause they consider these colonies to be illegal or unauthorizedareas.

This development strategy is successful because it is compatible with thesociology and economics of the urban poor. The extent of its success can bejudged from the fact that this kind of development is growing rapidlyinspite of increasing restrictions from officialdom.

Now the question is: Can the government follow the strategy adopted by the‘dallals’/developers or to put it more succincity: Can the informal sectorbe formalized? Government has two options: either it should integrate theprivate developers/’dallals’ into its own development strategy oralternately adopt the strategy followed by the ‘dallals’

But in either case government will have to surrender a large measure of itspower if either of these moves is to be successful. This will alsonecessitates a change in the unequal relationship between the governmentagencies and the poorer sections of the society. It would than have to beinstitutionalized. Again the question is: Are these things possible? Will

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the well-entrenched groups in politics and bureaucracy allow this tohappen? And finally: Can it be done without bringing about structuralchanges in society?

HAD have carried out an experiment to get an answer to thesequestions. )Details of the scheme have been documented separatelyindicating different phases of its implementation and the difficultiesfaced at various stages). Initially we encountered many problems, likepolitical opposition at the local involve; over-coming government rulescovering allotment of plots; lukewarm attitude of our own staff and finallytargeting the right people for this scheme and convincing them of ourbonafides. But so far there have been no major bottlenecks.

The basic concept of the experiment is that plots are to be allotted to themost needy persons at prices they can afford with almost no down payment.Services like internal water supply, sewerage, roads, electricity and gaswill be provided as the allottees would pay their monthly installments.

THE NEW STRATEGYAfter carefully observing the process of the establishment of Katchiabadis, HAD earmarked an area of 100 acres from the Gulishan-e-Shahbazscheme for carving out 80 sq. yard plots. Supply of water was arranged byconstructing a water tank with service taps. Initial price of the plot wasfixed at a level at which every poor person can afford i.e Rs. 460/- only.This was possible because these were not fully serviced plots and allsubsequent development was to take place incrementally with the paymentsmade by allottees at the rate of Rs. 60/- per month on the average.

A team of social workers headed by HAD ‘s Research Officer took utmost carein reaching and selecting the target group. Following criteria were fixedfor the section:

a) Overspill i.e. families living in inadequate and insufficientaccommodation-purely spatial criterion, calculated at 120 sq. ftper person.

b) Retired low-salaried employees.

c) Low-Salaried employees proceeding on LPR (leave prior in rentedaccommodation.

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The target area was adjacent katchi abadi so that people could easily shiftto their allotted plots. A form was filled by the survey team whichindicated their monthly income, number of family members, details ofaccommodation whether living on rent etc. It was necessary to weed out theunderserving people.

The scheme has the following other important aspects:

1) Utmost care has been taken to discourage the speculators and theaffluent middle classes. This has been ensured by.

a) demarcating very large number of plots so that there is nopremium on the sale of plots.

b) Not issuing ownership documents unless the house is built, theallottees start residing there, and clear development charges.

c) Fixing a very short period for starting the construction workconstruction to start the very next day of possession otherwisethe possession of plots would be given to other applicants fromthe waiting list.

d) Initiating a new approach to solve the urgent housing problem byaccommodating those applicants who bring family and householditem in the reception area. They are given preference over allother categories.

2) The scheme aims at organizing further developmental activity on aco-operative basis (on the mohallah or lane level) so that:

a) dues are paid and collected by the allottees in time, and

b) development costs are reduced by ensuring supervision by theallottees themselves. It is also planned that some of thedevelopment work, especially the sewerage component should bedone by the allottees themselves (as has been done in theOrangi pilot Project) in order to reduce costs. It has beenobserved that costs are reduced by 30% if government agenciesand contractors are not involved in development work becausethe elements of corruption and profiteering are eliminated.

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3) The scheme would also take care of the bulk sewerage disposalproblem which the ‘dallals/brokers/agents ignore to take up becauseof substantial financial outlays and technical problems.

4) HAD’s site office would provide all advisory services at the doorstep, and most of the paper work (which would be minimal in anycase) would be done by them. Though model plans would be providedto the allottees, use of locally available material and selfemployment in construction activity would be encouraged in order toreduce cost.

5) The scheme does not eliminate the role of the informal sectortotally. Thallawalas (who provide advisory service as well asconstruction material on cast/credit) have been allowed to operatein the area. Only their role as land-grabbers and developers hasbeen eliminated. This has reduced the initial payment towards thecost of land to a very large extent. For example if a ‘dallal’ usedto charge Rs. 5,000/- to Rs.10,000/- for a piece of 120sq. yds.Plot, Had would only charge an amount of Rs. 460/- for 80sq. yardsplot initially, plus Rs. 260/- at a later stage.

The role of the informal sector should and cannot be eliminated in total.But its role and efforts can be supplemented by the government and otherdevelopment authorities to a large extent. Total formalization of theinformal sector is neither possible nor desirable but integration woulddefinitely yield spectacular results at least in the housing sector.

This scheme is at a nascent stage right now. But after overcoming theinitial difficulties over 800 houses have already been built and work onanother 100 is in full swing. 100 families are not in a position to startconstruction because of several financial constraints. They are putting upin self-made jhuggis. But the most important fact is all the allottees havealready occupied their plots and they live there as they continue to buildtheir houses. Each day there is an addition of one or two families. Thesefigures may not look very impressive but if this scheme is juxtaposed withthe main Gulshan-e-Shahbaz Housing Scheme (where not a single allotttee hasstarted construction nor is ready or willing to construct his/her houseeven after paying all the four installments) the success of this scheme insuch a short period of five months would definitely look spectacular.

This experiment has shown that even without bringing about basic changes inthe power structure of the society; without changing the unequal

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relationship between the government and the katchi abadi dwellers, and evenwithout any definite political programme in favor of the wretched of theearth, development authorities can successfully assume the role of thedallals/brokers at least partially and follow their strategy successfully.

However, we still believe that the poorest of the poor, are still outsidethe purview of this scheme. According to raw estimates, about 10 to 20% ofour population which largely consists of single parent families, mostlyheaded by females, unemployed workers, daily wage earners, crippled and theindigent cannot afford even this sort of housing. The long list ofmustahiquin-e-Zakat will bear us out on this point.

To make this scheme more successful we are trying to undertake thefollowing steps also:

1. Development and encouragement of low-cost appropriate technologybased on cheap materials available locally to reduce constructioncosts substantially. Different model houses starting fromtraditional mud and lime to bricks and blocks have been constructedby the allottees themselves under the supervision and guidance ofHAD with spectacular results so far as cost of construction isconcerned. Similarly different experiments to reduce the cost ofthe roof have been successfully carried out.

2. Allotment of plots to homogeneous groups in a lane/sector so thatthe cooperative efforts at the grassroot level may be successful.These small units would ultimately be integrated into a cooperativeunion or federations.

3. Provision of public transport so that the allottees may not faceany difficulty in reaching their work places.

4. Use of private generators to provide electricity to those who caneffort it. These generators will be installed by those allotteeswho can invest money in the business and recover dues from theusers at their own risk and cost.

5. Constant monitoring and evaluation of the entire scheme in all it’sfacets so that difficulties faced by the allottees at any stage maybe remedied immediately.

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In the end it may also be highlighted that investment in housing hastremendous impact on income and employment through the multiplier linkages.According to a recent World Bank research publication (Housing for Low-Income Urban Families) first round effects are the direct increments toincome and employment generated by construction is higher than that formanufacturing and close to that for the economy as a whole. In Pakistan,the income multiplier of housing construction is estimated at 2 and 14additional jobs are created for every US$ 10,000 invested in housing, thepublication adds.

HDA’S BOLD EXPERIMENT

One of the major problems faced by the cities of developing countries intransitional stage of economy is housing shortage. The presence of thenumber of un-authorised settlers, the so-called katchi abadis, slums,bastis are clear indicators of such process and problems that have beennightmares for the city planners.

Hyderabad (Pakistan) is also one of such cities in which the number ofunauthorisedly settled families range around 30,000 and the figure isconstantly on the increase.

As per rough estimates the present housing shortage and requirement ofadditional housing from over spill, rented dwelling and congestedenvironments in around 52,000 housing units. The figure of congestion isdepicted in the 1981 housing census which shows that 35,000 housing unitsaccommodate 6 to 9 persons in one room only, 500 housing units have 14persons living in one room.

To solve the housing shortage HAD initially resorted to the conventionalapproach of sites and services schemes.

In this sort of schemes, land is sub-divided into plots, carpeted roads areprovided alongwith door to door water supply, sewerage disposal lines,electricity and gas etc, and the combination of a number of such plots isknown as sites and services scheme. The development of plots is downthrough the money received from the allottees mostly in annual installmentsspread over a period of two to three years.

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As far as mode of allotment is concerned it is regulated through SindhDisposal of Plots Ordinance 1980 which contains certain ratios of allotmentof quotas covering general public, government servants, professionals, menof letters, etc. Under the above ordinance applications are invited throughwide publicly in news-papers and allotment made through ballot if thenumber of applications exceed the number of available plots. In biggercities the population growth rates do not leave the possibility ofutilizing the if. The number of applications are many many times more thanthe plots and hence allotment is always by ballot.

It is an established fact that investment in real estate has proved to bethe safest and most profitable business. People also purchase plots as acushion against galloping inflation as well as dowry for their daughters.In view of these factors whenever a new housing scheme is announced,speculators with huge sums of money at their disposal apply in scores offorms reducing the chances of allotment of plots to the needy.

HAD initiated its first housing scheme in 1979 and over a persons of 8years has developed disposed off about 15,000 plots. It is a surprisingfact that though such a large number of plots have been developed, but only35 plots have been constructed and occupied while 44 are underconstruction. The gap between provision of plots and habitation is quiteintriguing if it is juxtaposed with the housing back-log in Hydarabad.

This revelation led HAD to the clear deduction that somehow HAD,s housingpolicy was not compatible with the sociology and economics of the poorersections of the society i.e the group most desperately in need of shelter.

HAD also realized that to meet the housing requirement of the needy poor,the provision of shelter should have the following basic considerationstuned to the requirement of the target group.

1. Procedure of allotment.2. Affordability.3. Timelag between application, allotment and possession.

The lacunae in procedure of allotment by ballot and its result have beenmentioned above.

Regarding affordability, at the present (1986) scheduled rate fixed by thegovernment and with all the components of development as discussed earlier

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the occupancy value of an 80 Sq.yd. plot without any subsidy comes toaround Rs. 12,000.

Spreading the scheme on 3 years we have annual installments of roughly Rs.3000. The average limit of installment being around 25% requires Rs. 3000to be paid alongwith the application and further requirement of 25% at thetime of issuance of allotment order doubles the financial strain on the lowincome group. The period between application and allotment does not involvea period more than one year forcing low income persons to arrange for Rs.6000 in a year.

The question is: If a person can save Rs. 6000 in a year, can he beclassified as belonging to low income group?

Statistics show that 80% of urban poor earn around Rs. 1000 per month andwith this earning if we expect him to save Rs. 6000 in a year for a housingscheme as above, we could definitely be living in a fools paradise.

The timelag between application and possession ranges around 5 years. Onereason is the developer agencies insistence on possession after fulldevelopment of plots with all the services. The result being that theurgent requirements of housing cannot be met. The housing authorities thusdo not have any provision for providing immediate shelter or even immediatebasis of shelter i.e. a plot of land, the result is formation of katchiabadis.

Katchi Abadies form as dallals (brokers) spot a piece of land (in mostcases belonging to the Board of Revenue or any other government/ localagency), divide it into small size plots (ranging between 80 to 240 sq.yd.), indicate the road alignment arrange water supply either throughtankers or by constructing a small tank with service taps, and finallyprovide artisanal skills, and in some cases construction material, oncredit.

The initial requirement of a shelterless family is only a parcel of landwith source of water near by or at hand. He does not require compactedroads or drainage disposal facility of electricity at the initial stage.This one the one hand, enables the shelterless persons to settleimmediately with minimum investment. Other facilities like drainagedisposal etc have been and can be very successfully done by the residentsthemselves on cooperative basis if properly motivated (as in the OrangiPilot Project).

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Thus the dallal provides the basic requirement of a shelterless family andsolves their immediate problem of shelter. His strategy has been verysuccessful in the informal sector giving instant results because he makesavailable plots at affordable prices, there is no time lag betweenallotment and possession and so no paper work is involved.

The provision of shelter through the informal sector, formation of KatchiAbadis and development of infrastrucuture on cooperative basis was studiedin detail by the HAD to evolve a housing strategy in accordance with therequirements of the target group.

The analysis resulted in the introduction of the scheme by the name ofincremental development scheme.

Initially plot sizes of 80 sq. yds. Were earmarked at site. The targetgroup was selected by the HAD with the help of councilors and socialworkers of the target area. The target group were broadly categorized underthe following classification who indicated their urgent need of shelterduly attested by the area councilors and area social workers:-

1. Over spill i.e. families living in inadequate and insufficientaccommodations, purely spatial criteria.

2. Persons living on rent.3. Retired government servants belonging to lower grades.4. Government servants on verge of retirement.

The over spill was calculated on the basis of 120 sft. Per person.Regarding the affordability of payment of development charges the minimumsaving capacity of a family for housing was found to range around Rs. 50per month only.

Based on the above guidelines. Master Plan Department HAD launched a pilotproject in Gulshan-e-Shahbaz in sector D6 and E4 which were initiallyplanned for residential plots of 80 sq. yds. Only. The staff of HADearmarked the target region and with the help of area councilors and socialworkers prepared a list of families falling in the categories listed above.

Application forms were distributed at the residence of the applicants andRs. 460 was recovered as an initial deposit which included Rs. 10 for theapplication form.

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The applicants were called at site and physicalpossession of an 80 sq. yd. Plot given to them,alongwith a formal allotment order.Initially the terms of allotment required that they complete theirconstruction within one year. The choice of building material was left tothem. The only building regulations they were to follow was to leave a 3ft. corridor at the rear of their plot to enable them to provide a windowfor cross ventilation. The period for completing the work was kept on theliberal side as the allottees had assured us that the moment they weregiven possession of the plots, they would start their construction orJhuggis and shift to the new accommodation. Howev3er, the applicants didnot honour their commitment. Only two applicants raised the constructionabove plinth level while 9 others laid only plinths, which merely served asplot demarcation lines. The other 21 plots remained vacant for 15 days.

Since the desired results were not forthcoming. HAD staff started worryingand further research on the project revealed that 50% of the applicantscould not raise enough funds to start any construction work, while theremaining 50% after receiving their allotment order were satisfied with asense of ownership, as they thought that HAD could not take any actionagainst them in view of the legal allotment orders and the fact that theirwas one full year to complete the construction.

HAD then instantly discontinued issuance of formal allotment orders andreviewed the whole strategy. In the new approach no title documents wereissued to the allottees. Instead only the physical possession of the plotswould be given and any documents to be issued is kept in abeyance till thefamily had constructed the house and started living their. In order toassess the feasibility of the scheme and to identify the most needy group,the period of construction was reduced to 3 months only.

There was still not much response by the allottees. The possession of plotwas considered enough by the applicants. Who should start first? This timeHad found that the main reason was lack of initiative.

HAD waited for 15 days and then started canceling all the previousallocations. Simultaneously, plots were allotted to the new applicants whowere on the waiting list. This time with the following instructions:

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1. The applicant must start construction immediately and maintain asteady construction pace so as to shift his family to the plotwithin a month.

2. If the applicant failed to start the construction the next day,the allocation would be cancelled and the plot re-allotted to thenext needy from the waiting list.

3. The allocation would remain valid as long as this allottee wasmaintaining a steady, pace of construction. If for 3 consecutivedays no construction work was noticed on the plot the allocationwould be cancelled and plot re-allotted.

4. The plot would be non-transferable except by way of inheritance.

5. The applicants whose allocation would be cancelled would loosetheir priority and be forfeited. Their names would be enteredagain as per waiting list maintained by HAD. This chance will begiven only once.

This policy was strictly adhered to and a number of plots were cancelledand a re-allotted from the waiting list. This step made it very clear, thatthe HAD meant business and only those person should therefore, come forwardwho were seriously in need of plots to build their own house.

The result of this policy was encouraging and within one month 13applicants resided in their houses. 212 laid their plinths and 110 putJhuggis were they resided during the day time only. Further 89 familiesconstructed their houses with one or two rooms upto roof level, all within1 ½ months.

While the system of identification through area representative andallotment was going on as per list prepared, some of the families could notwait for their turn of allotment despite being recommended by thecouncilors. What they did was that that they shifted their families fromtheir previous premises alongwith their household articles came to theincremental site and sat on a plot on which only the plinth was laid byprevious allottee. This phenomena indicated that the ongoing system ofallotment was inadequate in the sense that it did not cater for theemergencies and would therefore not help in eliminating illegal squattingwhich was one of the equally major aims of this scheme.

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This incidence indicated that those who bring their families and all household items at site for allotment of plot would be more genuinely interestedto have a shelter of their own and in turn would therefore be facing equalpush forces from their previous settlement. Could HAD work out a scheme toaccommodate this phenomena in a systematic manner? This was the nextquestion faced by HAD.

The HAD then came out with the answer of reception area scheme within theincremental scheme. An open plot of land used as a reception area. Thosefamilies who were in immediate need of shelter were required to bring alltheir families with their entire household items. They were then placed inthe reception area, where they erected make shift house. These familieswere observed for 5 to 10 days and being satisfied with their sincerity theHAD earmarked regular plots of 80

COST OF CONSTRUCTION 10” X 10”TypeRoom SiteMaterialMortarWall thicknessCOMPONENTBricks-2500 to 3000Labour-One Mistry 2 Labourersfor 3 daysDoorRoofBeam-WoodSupports (wood) 14 to 16Chatai 8Sarkan 12’ x 18’ (One)

SupervisionContractor ProfitApproximately

Stoping roof-One Room10’ x 10’Bricks + Thatched roofMud Roof & Wall9”PRICERs. 1,000 to Rs.1,200Rs. 480 to Rs.810Rs. 120….to Rs130

Rs. 60 to Rs100Rs. 112 to Rs.128Rs. 60 to Rs80Rs. 55 to Rs60Rs. 1,887 Rs.2,208Rs. 120 Rs.

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120Rs. 2.007 Rs.2,328Rs. 2,000 Rs.2,300

Sq. yards and advised them to shift their Jhuggi (make shift) house to thenew location and build adequate shelter while living in the same premises.Thus evolving the concept of live and build.

This scheme was initiated on 2nd Nov. 1986 and by 18th Nov. 1986 as much as350 families shifted to their regular plots through the stages of receptionarea and are residing there. No family who passed through the receptionarea scheme left their premises.

At a later stage some observations were received from some white collarfamilies whose social pattern of living discouraged them from living inJhuggi especially because of women folk observing purdah. This aspect wasstudied and different proposals were examined to evolve a low cost room tohouse such families who are needy but cannot afford being passed throughreception area scheme. This group belonged to the lower middle class havingstricter norms, different from lowest income group.

An allottee of this scheme belonging to a rural area had constructed a roomof bricks with mud plaster, thatched roof again coated with mud. Half theheight of the wall was 9 inch thick while upper half was 4 inch thick. Theroof was supported by central beam of heftier wood. Total cost was Rs.1,500 only. This price was very reasonable and it was decided to open thescheme for white collar persons immediately in need of shelter. Theirregisteration was done separately and they deposited Rs. 2,000.

Thus this scheme also successfully solved the problem of the low middleclass, as well. Further development in constructed unit scheme isutilization of blocks instead of bricks involving Rs. 2,250 only.

The present procedure of allotment is that the desirous family submitsphoto copy of their NIC (National Identity Card) to HAD. The cards arenumbered and date of submission stamped. The HAD picks out 20 families eachaccording to the serial number every Friday and puts upto the notice onsite informing them to bring their families and household items within oneweek of such notice.

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On contact with their families they are issued a card for reception area onreceipt of Rs. 460 only as installment of occupancy value. This amount wasfixed after detailed survey as to what was the extent of affordable downpayment of the target groups. The responses indicated the figure of Rs. 460per month. After receipt of the card the family settles in the receptionarea and are watched for some days before being shifted to regular plots.They are followed by the next 20 families on the list, to the receptionarea.

The total cost of the plot, has been fixed at Rs. 9,600. This would includewater supply, sewerage lines, and carpeted roads. Electricity was providedon receipt of the charges in easy installments of Rs. 50 per month in 1980,and proportionally increased by its 20 till 1000. After 1980, the receiptof development charges would be fixed at Rs. 110 per month.

To solve the water problem initially one water tank was constructed by HADfollowed by 2 more water tanks by the allottees on a cooperative basis.Initially the tanks were supposed to cater for drinking water facilitiesand limited construction activities but the settlers started constructingbrick houses which needed vast quantities of water. To cover this aspect 8inch water line was arranged externally where public stand posts wereerected to solve the problem.

However HAD found that if any facility is provided through a formalinstitution indirectly, the sense of belonging to the service lines to thebeneficiaries is very weak. At the initial stage HAD laid nylon pipes toprovide temporary water supply facility to some families who had resided inthe scheme. After two days the tee joints were found missing. The knobs atpublic stand posts were found missing one morning and then one fine morningthe entire pipe of 400 ft length was found missing.

This changed the thinking of HAD and thenceforth it was decided that thelane residents would contribute directly for their required level ofservices. A nylon pipe laid by lane residents remains undamaged. Anincident was also noted that a person while crossing an excavated trenchfor sewerage lines carelessly dropped some earth into the pit. He stopped,brought to shovel and cleaned the trench voluntarily before proceedingfurther. He was in effect directly taking care of his own work.

Every resident of lane now chooses their lane leader who is contributingfor their desired services. One lane has applied for sewerage lines another

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for water line and work is in progress. A committee of the residents havebeen formed to oversee the allotment/

A primary school has been opened by them, a doctor provides part timemedical facilities to the resident and the scheme is thus on the way forprovision of shelter to the homeless on incremental and cooperative basis.

COST OF CONSTRUCTION 10” X 10”TypeRoom SizeBuilding MaterialMortar - RoofWall Excavation for PlinthBlocks 450Cement 3 BagsSand 100 CftWater ChargesLabourDoorChatai 6 Nos. 5’ x 10’Sarkan 12’ x 18’ Beam WoodenRoof Supports wooden 20 Nos.@ Rs.5Building material rent

SupervisionTotal

Stoping roof-One Room10’ x 12’Bricks for walls &Thatched roofMud with Sarkan &ChataiCementRs. 30 -6” to 1Rs. 700Rs. 210Rs. 100Rs. 40Rs. 560Rs. 120Rs. 60Rs 60Rs. 55Rs. 100Rs. 48Rs.2,083Rs. 167Rs. 2,250

PHA HOUSING SCHEME

INTRODUCTION

Government of Pakistan announced the construction of apartment to cater thehousing shortage, mainly in big cities. One such project was announced on a

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site along Wheatman Road, Lahore. Government acquired the land fromRailways Department with no complete adjustment, which posed problemafterward. After the approval of first design with large number of flatsbecome different in terms of site hand over. There fore adjustment had tobe made in design by cutting short the A & B categories as well as minimizeof C & D type flat to only 224 accommodated with in (17-13) 20 blocks withfour floors. Site Layout as well as individual design made clear theoverall categories and three pocket of site can be identified. Projectcommenced on August 8, 1999 with one year completion time and revised dueto political problems with completion date of November 02, 2001. Little hasbeen achieved in respect of completion due to further delays in terms offunding, which is the excuse on the part of contractor to be unable to handover the project on time. NESPAK designed the project and PASCON was theconstruction company, earlier experienced in building roads and irrigationworks; having the first building project of its kind. Further more thecommencement of work at a number of blocks was delayed due to obstructionscaused by the existing sewerage pipe lines, PTC cables, abandoned PakistanRailway track and over head electric lines/poles etc. There problem wastried to solve by the coordination of PMHA & Pakistan Railways. Some blocksfaced obstruction due to encroachments, which were relocated. Sewerage linepassing through block C13 was diverted by the contractor. C18 suffered dueto electric lines. The abandoned railway track had to be removed forcarrying out work properly.

Covered Area of one apartment C-Type : 1115 Sft (5 Marlas) Including circulation

area D-Type : 900 Sft (4 Marlas) Including circulation

area. Date of commencement : August 08, 1999

Time and Date of Completion Original : 12 Months (August 07, 2000)Revised : 27 Months (November 02, 2001)

Contract Number PHA-003Construction Type C&D ApartmentsDesigner NESPAK (Pvt) LtdContractor PASCONSPM Consultant NESPAK (Pvt) LimitedEngineer’s Representative Mr. Arif J. Butt

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Project Cost (Rs. Million)Original109.713

Revised80.5

Number of Blocks (C & D) 18 & 10 17 & 3Number of Dwellings (C and D) 144 & 80 136 & 24

Payments previous Rs. 60.51 MillionThis Month -So Far Rs. 60.51 Million

Physical ProgressHanding over of site 100% (As per revised scope)Removal ,of site obstruction ** Not requiredEngineer’s Meeting at site Every MondayProvision of survey controls 100 %Provision of Detaileddrawings

100 %

Mobilization of contractor 100 %Contractor’s site office 100 %Consultant’s site office 100 %Provision of service utility(WAPDA, Telephone, Water,etc).

100 %

Mobilization of Machinery 50 %Mobilization of Consultant’sStaff

E.R. Inspector, F. Asstt.

Preparation of constrSchedule

Revised schedule as perallowed extension has beenprovided by the contractorfor 20 available blocks.

Location Wheatman Road, Lahore

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Letter of Acceptance August 3, 1999Notice to Commence August 7, 1999Date of Commencement August 8, 1999Date of Completion August 7, 2000Revised interim date ofcompletion

November 02, 2001

Achieved Progress (%) * 75.20 %Planned Progress (%) * 100 %Time Lapsed (Days) 993

ANALYSIS RATES

Analysis of rate is a process before bidding and contractor makes use ofhis past experience as well as comparison of rte with similar kind ofprogress. This project which is a kind of “Lump sum” contract is awarded atrate of Rs. 475/sq.ft. In order to calculate, contractor adopted thisprocess; for example he assumes the work to be done on 100 sq.ft. of wall,he will first calculate.

i) Material consumption like brick, mortar layer, wall finish.ii) Use of tool plant like scaffolding etc.iii) Labour input.iv) Income tax payments.v) Overheadsvi) Profit ratio

Likewise, he will calculate all the works to be done, employing, machineryalso taking into account damages etc. Now, he will get a figure for thework of 100 sq.ft. covered area, from where rte of 1 sq.ft. is easy tocalculate.

EVALUATIONPROBLEMS

Problems encountered during the construction process are related to thearrangements for the construction specially, and during construction

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generally. We will discuss some of the important problems, which somehowretarded the activity, as well as escalation of time.

Hand over of site was the very early problem encountered, becauseownership of the site was of Pakistan Railway and PHA authorities findit hard to settle the issues raised by the Railway Department. Thus bycontinued negotiations, some of the problems were solved and remainingescalated after sometime.

Reduced Number of Blocks have to be accommodated in the site planbecause work was started only on half of the blocks arid adjustmentshave to made in the layout design. It was counted due to the railwayemployee’s residences present there.

Layout has to be changed further when it was found that electricitysupply lines pass exactly over some of the blocks. It was rather easyto change layout than top remove the lines.

Extra work has to perform by the contractor in respect of readjustingthe drainpipes, which hindered the excavation of the two blocks. Nowsurprisingly, contractor decided to make the change by his ownexpanses, because in order to make a claim a lot of time was required.

Unrest in the Country made first delay of it’s kind which prolonged tolarge number of months. Now there was a new schedule of completioni.e. 27 months, unlike the previous 12 months. During that timecontractor machinery remain idle most of the time and permanent staffhave to be paid just disturbing the budget.

Workers insurance matter is also pending because earlier thecontractor have only obtained guarantee for the period of 12 monthsand the present schedule, which again has exceeded the 27 months time,is a matter to be settled with the PHA authorities.

Overheads which deduct most the contractor’s share in the profit, wereuncontrolled, mainly due to abnormal delays in the continuity of theproject. Mainly, workers salaries, utility bills, rent of themachinery, idol machinery, maintenance; security of the entire area,delays in payments, site occupation problem, site office constructionand maintenance etc., comprise the overheads.

Excessive delays in payment and the little surety of the projectcontinuity as well as success have created doubts in the contractors

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mind, so does the efficiency of the project.

Stand-by option for the case of machinery utilization is a safetymeasure, but calculated efficiency, some times, creates problems inrespect of the amount of the work done (which disturbs, the schedule).Hoist machine efficiency made somehow problem in this respect, but oftemporary nature.

Model House has still not been eared as per condition of the contract.PHA can make claim but up till now there is no such possibility onaccount of the circumstantial delays in the successful completion ofthe project.

Escalation Clause according to the contract was applied specificallyto the fuel and other cases got little validity

Machinery detailed in the contract has not still been made availableto the site, but the progress of the work bear no ill effect due tothe unavailability of the total machinery. PHA can claim the verycase, only if the workability face delays on this account, but theyrather neglect it on there part for the ease of the contractor. Stillone cannot claim 100% mobilization on the site.

Tests Detailed in the contract could not be confirmed due to thelittle facility on the site. Some tests were carried out in the UETLahore Laboratories.

Brand Names which are given in the contract (please see appendix) werenot made exactly: The very fact only matters when engineer made noticeof the sub-standard material and insists on the product of the brandgiven in the contract.

Employer’s Risks detailed in the contract become activated as per caseof political unrest followed by the change of the government. Otherrisks are of rare nature, so find no liability to the progress.

Batching Plant Availability is asked in the contract, but the case isinteresting because the contractor made available a faulty equipmentthere; which was of no use but only to confirm the contract conditions

CONCLUSION

There are many examples in respect of excessive as well as abnormal delays

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of the scheduled project. There always somehow consequences, which becomeunable to suppress or controlled. The very case of PHA housing (Project003) fell victim to the abnormal delays. Overheads became a major problemfor the contractor, which must be kept minimum in order to avoid the burdenover the expected profit, thus swallowing the available resources.Conditions of the contract are going to be ignored to little extent, whichhas no ill effect over the running as well as continuity. Initialsettlement of the disputes in respect of site handover as well asredesigning of the layout took some of the valuable time, when the run ofthe other (same kind) projects was satisfactory. Thus the contractor cannotbe blamed at all, but the initial preparation to begin the project was notin accordance with the standards of the feasibility studies, so does theappearance of extra work, redesigning and rescheduling as well, Some timeshurdles are removed but the very case demanded the new layout to save thecost. Process of making claims is some time untidy because of the littlepreparation and sometimes due to the strong points raised by the employer.

As far as accident are concerned, there is no such evidence due to safetymeasure approach, but not to satisfaction level at all. Although some minorcases of injuries were noticed, but the availability of first-aid made nomajor problem.

Design of the blocks is, if satisfactory, but not qualifying. It is theneglect of the main facade care due to the presence of exposed pipes.Availability of punctures in the areas of the balconies is againquestionable, making problems later on.

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PHA HOUSING PROGRAMME

As part of an economic revival programme, the previous government promisedto provide every family a house by the year 2010. the scheme was launchedin May 1999 and was included in the 9th five year plan (1998-2003). In theinitial stage the ambitions programme envisaged the construction of 500,000houses for middle and lower middle class people in active collaborationwith the private sector.

Under the scheme 75,000 housing units were to be built in Karachi, 50,000each in Lahore and Islamabad and 25,000 each in Peshawar, Multan,

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Faisalabad and Hyderabad. Quetta and Sukkur were to each have 15,000 newresidential units.

For implementation, 20,250 acres of land was to be brought at an estimatedcost of Rs. 25 billion and the construction was to cause Rs. 300 billion.Al the projects were to be executed by the Pakistan Housing Authority(PHA), specifically formed for the job. Yes, the same PHA, which nowpromises Pakistanis home, albeit with necessary modifications.

Now the scheme is to be launched from January 22, 2001 with only 4500apartments having been announced to be constructed in Islamabad, Peshawar,Lahore and Karachi. According to the housing and works minister,

1`700 apartments will be constructed in Lahore. 1500 apartments in Islamabad. 1000 apartments in Karachi and only 300 apartments in Peshawar.

The construction will be completed in 18 months.

Officials in the PHA informed TNS that although the scheme appears to be acontinuation of the Nawaz governments programme, in reality that programmehas been shelved. The PHA is now only executing those projects on whichconstruction had started. The only difference is that now the PHA is alsobuying land which was earlier being based and constructing the houses to besold on a no profit, no loss basis.

The official said the apartments will be of B, C & D type categories withthe B-type houses having 3 bed rooms and a T.V. lounge among other things.

The prices would vary from a maximum of Rs. 1.8 million to around Rs.700,000.

“On a first come, first served basis, a person who makes a 100% paymentwill be entitled to a 10% discount and the right to choose a flat of hischoice, some one paying 50% of the cost, will not get any discount and aperson with 10% down payment will be required to pay the remaining amountin 15 equal monthly installments”, the official added.

In case of a large number of applications in the category of 10% downpayment, the selection will be made by balloting.

A HOUSE OF THEIR OWN

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Nadeem Iqbal, reviews the government’s decision to launch a housing schemefor the people and wonders how for the 4500 can go in tackling the problem.

Once again an advertisement in the papers and once again a promise. How faris the home from here?

After having shelved Nawaz Sharif’s Prime Ministers Housing Scheme, themilitary government faces the challenge on how to tackle the problem ofhousing in the country. Drastically curtailing the now defunct’ PM housingprogrammes, the government has decided as a lost option to construct 4500apartments at the cost of Rs. 500 million in the four major cities,Islamabad, Lahore, Karachi and Peshawar.

ECONOMIC ANALYSIS AND SURVEY

With the rapidly growing population, officials estimate that every year thedemand increases by 2 million houses. The governments failure to meet thedemand culminate in the emergence of shanty towns, slums and Kachi abadis,which are lucrative businesses for the mafias involved. The squatters areconsidered as illegal by the government.

According to the economic survey 1999-2000: “The estimated back log of 4.3million housing units including 52% to deal with over crowding and 48% assubstandard dilapidated houses require immediate reconstruction”.

The survey added that about 35% of the total urban population lives inkatchi abadis and slums where the population densities are high. Most suchareas are without water supply and sanitation.

Other than the governments public Works Department there are four otherautonomous bodies, National Housing Authority, Pakistan Housing Authority,Federal Government Employees Foundation and House Building FinanceCorporation, but their collective efforts have failed to reduce the housingdeficit.

The previous government’s scheme was considered a political gimmick withNawaz’s right hand man, the then accountability supreme senator Saif-ur-Rehman, calling the shots. It was infact declared and financiallyscandalous “Yellow housing scheme” by its critics. But an improved and morefinancially disciplined scheme could have had the potential to deliverwonders as the project was an out come of an institutional home work.

The scheme envisaged providing direct employment to 600,000 people and

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indirect employment to another 400,000 people while supporting 40 differentindustries in the country. It was projected that 11.5 million tons ofcement, 1.0 million tons of steel and 20,000 million tons of brick/blockwould be consumed in the scheme.

The government also enhanced HBFC’s loan port folio from Rs. 2 billion toRs. 7 billion. The rate of interest on loans from Rs. 100,000 to Rs.300,000 was fixed at 10%, for loans up to Rs. 500,000 at 15% and for loansmore than this at 20% per annum. HBFC also waived off a total loan of Rs.1521.4 million to 27049 million widows.

However, given the past experience, if such a scheme is launched now it cannot be implemented till October 2002, scheduled departure time for thepresent government. Now, what will be the home realities at that time, noone knows ……..

AN ALTERNATIVE TO ‘MERA GHAR’ SCHEME

The Chief Executive must have taken the decision to give a ‘go ahead’signal to the former prime minister’s housing scheme in the best interestof the nation.

However, it would be advisable to learn from the mistakes of the past andplan the programme in a manner that it does not drain the nationalexchequer of the much needed credit for other more vital and viablenational programmes.

Pakistan’s building sector is already laden with over Rs. 250 billions ofbed debts minus the recoveries of the recent past. Instead of putting morepressure and strain on this formal financial sector, judicious alternativeof mobilizing financing from the enormous hidden economy for the housingsector can usher in a new era of wise economic planning and development.The government needs to regulate this sector through appropriate policyplanning effective monitoring measures, and provision of basic infrastructure, instead of injecting public funds for building of housing units.The private sector, if given a conducive environment, can be tempted tomobilize the needed funds from the hidden economy which is as high as about38%.

Housing is one of the basic needs and therefore, provision of accommodationforms part of the responsibilities of the public administration everywhere.The important role of this sector as a stimulus for domestic economic

72

activity and national development can be identified from three points ofview:

1. Investment in this field is labour intensive.

2. It can stimulate the production of local building materials.

3. It can act as an incentive to mobilize household saving by offeringan attractive investment opportunity.

There is a backlog of about 5.0 million housing units and it will continueto increase over the years unless concerted efforts backed by sound andlong term planning are made to tackle the problem. The formal sector of theeconomy in Pakistan has been building 40,000 to 50,000 dwelling units peryear compared to the annual growth of households of 120,000 per year.Unless special efforts are made for providing of additional housing units,the situation will assume alarming proportions.

Governments have been doing their best, wherever possible, to ,improve thecondition. Not ,in too distant and future all villages would haveelectricity and rural housing units, which comprise 80% of the housingstock in the country, would have access to electricity. Similarly, greatemphasis is being laid on the improvement of ,infrastructure. But verylittle progress has been made in provision of new accommodation, mainlybecause of scarcity of resources.

So far the governments in Pakistan have, unfortunately, played a vital rolein aggravating the situation with regard to housing. The famous “Katchiabadis” slogan might have paid dividends in political terms but it hascreated in human living conditions in and around all urban centers of thecountry. These have also deprived the nation of the valuable parcels ofurban land which otherwise could have been used to generate economicactivity to its fullest potential.

But it must be realized that in many countries, efforts on the part of thegovernment to construct housing in the public sector have met with failuresbecause sufficient finance for such programmes is usually not available,costs are normally higher and consequently problems get multiplied insteadof being solved. Hence the policy should be minimum intervention andmaximum support to the peoples own efforts. Unrealistic and unstablesubsidies in the form of free land must be stopped or restricted to benefitonly a few at the lowest level of income. Financial assistance must be

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given but not without making provision for recovery of the money.

Housing in all urban centers of Pakistan has become very expensive. Fundsused in the purchase of houses would amount to billions of rupees but allthis wealth remains latent. It is not in circulation and hence doesnot ,play any active role in the national economy. Banks in Pakistan do notloan against real estate.

The desire to own a home can be pleasantly expected to encourage increasedpersonal savings. It will prove so, because in almost all countries of theworld, housing finance institutions in the private sector have played avital role in mobilizing personal savings. The importance of suchinstitutions, such as building societies, in respect of economic andemployment activities also, has been of significant importance to theeconomies of even the developed world. These private institutions havemobilized personal savings and have contributed to housing development to agreat extent and have provided housing finance upto over 80% of the totalinvestment. The activities of these private sector organizations have thuscontributed significantly to the national economics on the one hand andprovided the much needed shelter to the majority of the population, on theother.

The government, by giving approval to the Mera Ghar scheme, has alreadyplaced ;high priority on the housing sector. The judicial use of governmentresources combined with private efforts can go a long way in meeting theneeds of the nation in this vital sector. The question of existinggovernment contribution and subsidies should be critically reviewed withthe goals of increasing their effectiveness, avoiding unintended sideeffects minimizing costs to the public and private sectors and distributingbenefits fairly in relation to need. The government contributions must becarefully targeted to groups that have a specific visible need. Governmentresources should be allocated towards the improvement of sites and servicesand slum upgrading, provision of infra structure, the development of landinformation system, the reform of the tand tenure system and thedevelopment of financial markets and institutions.

The task of building new homes as well as providing loans to homeownersshould be diverted to the private sector.

Hence the housing sector does not have to be supported with public fundsborrowed from commercial banks. All that needs to be done is to ,provide apolicy frame work that would encourage the establishment and functioning of

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private sector housing financing instructions which would have the legalright to repossess the housing units financed by them in case the ownerswere not repaying the loans.

The fraudulent performance of the co-operative housing financingcorporations in the past should not, in any way, be referred to oppose whatis being proposed here. These finance corporations were able to roe thepeople because of the inefficiency and callousness of the regulatory andmonitoring agencies. If housing societies in other countries and, inparticular Britain, can have a financial out lay larger than the commercialbanks, why can not it work in Pakistan? It will definitely work providedthere is a will to let some thing good for the country to work.

BIBLIOGRAPHY

*1) J. PRICE GITTINGEEconomic Analysis of Agricultural Projects.The John Hopkin University PressBaltimore and London; 7th Printing; 1978

*2) I. D. LITTLEThe Little-Mirrless Exposition of Socio-Economic Project Analysis.Social and Economic Dimensions of Project Evaluation.Washington, D.C., 1977.

*3) PETER. H. ROSSI; HOWARD, E. FREEMANEVALUATIONA Systematic ApproachSafe Publications, Inc. United States of America, 1985.

*4) SHOLOMO REUTLINGERTechniques for Project Appraisal under uncertainty.The John Hopkin University Press. 1972Baltimore and London.

United national Industrial Development Organization.practical Appraisal of Industrial Projects.Application of Social Cost Benefit Analysis in PakistanUnited Nations, New York – 1980.

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D.H. GOWLANDModern Economic Analysis 2Butterworths and Co. (Publishers) Ltd.,Great Britain, 1983.

1. Article “A House for their Own” by Nadeem Iqbal ARCHI TIMES,February 2001, page. 10.

2. Article: (An Alternative to Mera Ghar’ Scheme) by M. Iqbal Wahla,Achitectures, February 2000, Vol. 15, No. 2, page. 7.

3. Article: An Acute Shortage of Low Cost Housing in the City and letto a Mush-Room growth a Katchi Abadis on government and PrivateLand. “Housing shortage gives rise to Katchi Abadies min Lahore” bySajid Iqbal, Vol. 13, No. 7, Pages 1 & 15.

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