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Construction industry in hot waters - Naveed Yaseen - 08-04-2009 04:53 AM
* Non-availability of finances from HBFC hurting housing activity
By Moonis Ahmed
KARACHI: Most of the construction projects in the city are not being finalised due to a decline in the loan disbursement by House Building Finance Corporation (HBFC), which has put the construction industry in deep trouble.
Chairman, Association of Builders and Developers (ABAD) Babar Mirza Chughtai said in a letter to CEO and MD HBFC Azhar A Jaffri, Monday.
He said that a number of meetings have been conducted between ABAD and HBFC regarding issues pertaining to HBFC policies and problems being faced by builders. But, even though a consensus was reached on various matters after a series of meetings it did not become the part of the meetings.
He said that this is a very sad state of affairs that the non-action from HBFC has put the construction industry at a very critical situation. During the last six to eight months the loan disbursement has fallen to a very low level, which has hurt the pace of projects, Babar said.
He said that the power of loan approval process has been transformed to Credit Management Committee at the head office of HBFC from the zonal offices. It is not only ABAD’s opinion that if the loan disbursement fell below the target, the sustainability and viability of HBFC is at stake.
It was also the finding of the study conducted by an international organization, which was sponsored by HBFC, he added. The loan disbursement to the lower and middle income group by HBFC is of utmost importance, it is not only the lifeline to the very existence of HBFC, but plays a very vital role in providing homes to a large number of homeless people in Pakistan.
“This year HBFC has disbursed only 15 percent of the disbursement, which was made last year, and that is only 5 percent of the recommended disbursement,” he said. The vision of the president and the government of Pakistan to build million homes in a year will become an unlikely target to meet if the HBFC will not take drastic measures to increase the loan disbursement to the recommended level.
He said that under these circumstances, it becomes imminent that HBFC should ensure that the decisions arrived at the meetings with ABAD are implemented promptly in letter and spirit. This would not only help the construction industry in providing the possession of housing units to the allottees in a timely manner, but it would also make it sustainable and viable.
http://www.dailytimes.com.pk/default.asp?page=2009\08\04\story_4-8-2009_pg5_7