LDA engaged for Ashyana apartments on Burki Road

[Salman]

LAHORE

The Punjab government has engaged the Lahore Development Authority for the forthcoming Ashyana Housing Apartments project on Burki Road., which fixed the price of an apartment at Rs 2,398 per square feet.

The cost of house was charged from applicants for Ashyana houses art Attari Saroba was only Rs 900 per square feet.

The Punjab government in its previous tenure had established a company ——Punjab Land Development Company (PLDC) —— with the prime objective of initiating and completing housing projects for low-income groups.

But for Ashyana Housing Apartments, the LDA has been given a major role which is right now involved in price fixation of apartments, planning, bidding and ore-qualification process of the project.

According to the price fixed by the LDA for the Ashyana Housing Apartments on Burki Road, the price of a 500 square feet apartment is put at Rs 11,99,000 with down payment of Rs 2,39,800 and a monthly installment of Rs 7,993 for a 10-year period, for a 600 square feet apartment it is Rs 13,99,000 with down payment of Rs 2,79,800 and a monthly installment of Rs 9,327 and for a 700 square feet apartment it is Rs 15,99,000 with down payment of Rs 3,19,800 and a monthly installment of Rs 10,660.

On this payment plan, the per square feet cost of a 500 square feet apartment is Rs 2,398, for 600 square feet apartment it is Rs 2,331.67, and for a 700 square feet apartment the price is Rs 2,284.29 while Rs 800, 900 and 1,000 are being charged as application fee.

When contacted, Zaeem Qadri, a spokesperson for the Punjab government, said that the Lahore Development Authority was only providing technical assistance in the Ashyana Apartments Project as the Punjab Land Development Company did not have capacity to handle technical aspects of such mega projects.

He said the cost of apartments published in an ongoing advertisement campaign of the Punjab government was not true.

“The cost is what I am telling you not what is in advertisements”, he insisted.

Mr Qadri said that the per square feet cost of the project is Rs 1,800 while in the Ashyana Housing Project it was 900. A philanthropist has contributed Rs 1.25 billion to that project so that the cost was reduced for low-income groups, he mentioned.

“Now the raw material cost has increased so it has added to the Ashyana Apartments Projects end-user price”, he added.

Replying to a question that why the government is not filling the vacant post of the Chief Executive Officer of the Punjab Land Development Company, the spokesperson said the post had been advertised and the government was in process of hiring. Currently the housing secretary has been given additional charge of chairman of the PLDC through a proper legal procedure, he said.

He said that the PLDC was limited to infrastructure development and it was working on it, adding the LDA did not meet investors of the project.

To a query, Chief Engineer of the Punjab Land Development Company (PLDC) Arif Majeed Butt said that the Lahore Development Authority was planning the project while the PLDC would execute it. All the costing of the project is being done by the LDA while it was decided by the Chief Executive of the Punjab that the PLDC and LDA will jointly work on the project, he said.

Of the price of apartments, he said that the cost of land was also included in the consumer price. He said the Ashyana Housing of Attari Saroba was constructed at a cost of Rs 900 square feet while Sahiwal and Faisalabad at Rs 1,600 and 1,800 square feet, respectively.

He went on to say that the construction of the apartments would not start before six months owing to legal requirements, including tendering of the project, pre-qualification etc. The construction at the sight may start from April to May, 2015, he added.

About engaging private developers in the project, Arif Majeed Butt said that the PLDC was not aware of it. The PLDC was not engaged at that stage of the planning of the project. He said that the PLDC was not aware of meetings with private investors.

About the delivery time of these apartments, he said the delivery of the apartments to successful applicants was expected to start after 18 months of initiation of the project while the process was hoped to be completed by 48 months.

However, some flexibility of four to six months in delivery time could be possible. But the PLDC is committed to completing it within the given timeframe, he said.

The division of the apartments’ size would be made in accordance with the applications received while it is expected that it might be clear by end of December 2014 as the last date for submission of applications for Ayshana Apartments is December 22, 2014, he said.

Mr Butt believed that involving the LDA in the project would help strengthen the PLDC.

“The LDA is an established organization with executing mega projects and its involvement will give a big push and credence to the PLDC”, he said.

Talking about the cost, he admitted that the cost of Ground+3 project was supposed to be less as the same land was used in the building. However, he said, this reduction is not substantial as the structure cost of Ground+3 is much higher than a normal housing as string housing and pillars are required for it.

On the other hand, the payment plan of these apartments is very attractive as compared to the market as no mark-up is being charged by the government on it while full payment would be completed through installments in 10 years.

Punjab Housing and Physical Planning Secretary Dr Arshad Mahmood said the government was giving these apartments to the public much lower than the market rate.

“The government is incurring a loss in this project and if someone thinks that it is overcharging, he or she should not apply for this apartment”, he insisted.

Dr Arshad believed that it was not the duty of the government to provide housing facilities to the public. “The government job is to facilitate the public not provide housing facilities”, he said, adding in the case of Ashyana Apartments the government was doing the same.

He said the cost of land in the DHA was very high and the government was going to provide these apartments in the Defence area on 10 years of installments without mark-up.

Terming the Ashyana Apartments the most successful model of the Public-Private Partnership in Pakistan, he said the public would benefit from it. He made it clear that so far no decision was made on the number of apartments to be built.

This all depends on participants who are going to submit their bids that how much apartments they will offer to the government against a particular piece of land i.e. 28 per cent of the total 3,100 kanals. Bidders will have to construct apartments and use 28 per cent of the land for their own projects. This will be decided after the bidding, he said. About the high apartment price, he said he was not dealing with it. The LDA is looking after this matter so better ask it, he added.

Talking to this reporter, Member of the Planning and Development Board Aga Waqar said that the construction cost was calculated at Rs 1,850 per square feet. In the approved project of Ashyana Apartments on Bruki Road, 28 per cent land would be utilized for apartments while the rest of 72 per cent would be used for public amenities.

Meanwhile, a leading developer in the private sector said that the Association of Builders and Developer of Pakistan had suggested the government to execute the project on a Public-Private Partnership basis. “We have suggested the cost should not be exceeded to Rs1 million”, he said, adding the government had also called some local builders for this project. A number of reputed builders avoid doing business with the government owing to various hiccups, he said.

He appreciated the project but questioned that cost charged by the government from the applicants should be cleared with land cost and construction cost so that no ambiguity left in the project.