Pakistan to initiate construction projects worth Rs400b this year

Minister for Information and Broadcasting Shibli Faraz has said that four hundred billion rupees (Rs400 billion) construction related projects will be initiated in the last quarter of the current year.

Addressing a news conference in Islamabad on Thursday, he said a project envisaging construction of houses and apartments worth Rs145 billion will start on 20th of October.

 The Information Minister said Prime Minister Imran Khan is giving special emphasis to the uplift of construction sector in order to revive the economy as well as realise the dream of disadvantaged segments of the society to own their houses.

The Information Minister said those constructing five marla houses will be given loans on five per cent markup and for the ten marla houses, the markup rate will be seven per cent. He said instalments will be such that the people could easily pay.

 He said additional Rs30 billion have been set aside as subsidy for Naya Pakistan Housing scheme.

The Information Minister expressed satisfaction over the recent auctions of Capital Development Authority saying there is an enabling environment for the construction sector in the country.

Shibli Faraz said the Prime Minister today chaired a meeting of National Coordination Committee on Housing, Construction and Development. It was attended by the country’s prominent investors and builders.

He said the meeting discussed several proposals to uplift the sector including holding international roadshows for construction related projects in order to attract investment of overseas Pakistanis.

He said the Prime Minister has now decided to hold the meeting of the committee every two or three days keeping in view the importance of the sector which is both labour and capital intensive.

The Information Minister said the focus of Prime Minister Imran Khan’s policies is middle class and poor segments of the society.

Speaking on the occasion, Prime Minister’s Special Assistant on Poverty Alleviation and Social Protection Dr Sania Nishtar said that the government has decided to expand the scope of the Ehsas Emergency Cash programme.

She said its budget is being increased from Rs144 billion to Rs203 billion. She said 16.9 million deserving families, which almost cover more than half of Pakistan’s population, will benefit from this scheme.  Dr Sania Nishtar said distribution of cash assistance is continuing till the last deserving family gets the amount. She said Ehsas Emergency Cash programme is the biggest social protection package announced in Pakistan’s history.

 She said this programme is being commended at the international level under which cash assistance is being provided to deserving families in a transparent manner and beyond political affiliation.

Meanwhile amidst federal government’s special incentive for the construction sector, the State Bank of Pakistan (SBP) on Wednesday decided to set a mandatory target for banks to extend mortgage loans and financing for developers and builders.

According to a press statement issued by the central bank on Wednesday, the banks will be required to increase their housing and construction of building loan portfolios to at least 5 per cent of their private sector credit by the end of December 2021.

It said due to significant shortages in meeting the annual additional demand of housing facilities by its citizens, a huge shortfall of housing units has accumulated over the years in the country. Filling this gap is important to improve quality of living conditions for common people and construction of housing with linkages to dozens of allied industries offers substantial potential for boosting economic activities in the country.

This, however, requires considerable amount of financing to meet the investment needs of this sector. In Pakistan, bank financing for mortgages and housing construction is less than one per cent of GDP which is one of the lowest in the region. Banks have remained reluctant over the years to extend mortgage financing for various reasons.

Keeping in view the need for housing and its contribution to the economy, GoP is aiming to increase the number of housing units manifold in the coming years and has recently announced several measures including commitment to remove hurdles in mortgage and construction financing.

To play its due role in enhancing financing to the housing and construction of building activities, SBP is also taking several measures in consultation with key stakeholders. A high level Steering Committee, under the Chairmanship of Governor SBP and with representation from Chairman NAPHDA (Naya Pakistan Housing Development Authority), several bank Presidents and other stakeholders, is meeting every week to resolve issues and follow up on decisions to promote mortgage and construction financing, especially for NAPHDA projects.

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