Prime Minister's Housing scheme: Kakar ensures full transparency in award of contract

Senate body on Housing and Works has directed the Ministry of Housing for open bidding process for awarding contract for constructing one million houses under Prime Minister's Housing scheme as members of the committee expressed serious reservations over awarding Rs 60 billion contract to a UK-based firm.
However, the Minister for Housing and Works Rehmatullah Kakar assured the committee that contract was not yet awarded to the British Company and the matter is still under process with Ministry looking carefully in each and every aspect of the contract.
The committee was met with Dr Muhammad Ali Brohi in the chair here on Monday. The Minister briefed the committee about the process of awarding contract. The meeting was also informed that not a single penny would be spent on the project from the public exchequer as this would be executed under public-private partnership basis. The Minister assured that his ministry would continue to seek guidance and support from the Senate Committee in this regard.
The Committee directed the Ministry Housing & Works to ensure and submit the MoU signed with 14 other companies before the committee. While extending its full support to the Government's scheme for provision of housing to the poor and middle income groups, the Committee observed that since the project of this magnitude was not undertaken earlier, it was necessary to keep this under parliamentary oversight to avoid all sorts of delays and shortcomings, which plagued such projects in the past.
Earlier, the Secretary, Housing and Works Ministry informed the Committee that the advertisement was published in all leading newspapers and 50 firms responded in giving the EOI. The project would be implemented under IPDF and it would be on Public Private Partnership basis in the form of a joint venture. He said that 14 firms has signed basic MoU including firms from Germany, US, UK, Spain, China, Malaysia and December 25 was the closing date.
He said we have the services of core financial, legal and technical advisors and we are moving under the direction given to us by the Steering Committee of the project, he added. Construction of 30,000 housing units would be undertaken within two years and the project would be completed in 10 phases.
Initially the project consisting of 2840 units will be taken in phase-I at Defence road, Lahore. The officials of the ministry submitted that attempts to scandalise things in the media would serve only to scare away foreign investors and the public at large would suffer since there was a short fall of nearly 7.4 million houses in the country.
The IHL, he said, has a diversified portfolio and shoe-making is one of its expertises. However, the firm has prior experience of constructing houses in countries like UK. "It is commendable that reputed firms are willing to enter into the project and make investment on 4-6 percent profit".
The Representative of M/o Finance informed the meeting that the agreement was signed between PHA and IHL but the IHL was shown to be registered in Lahore (therefore, not foreign) and it was to provide 100 percent equity for the project and has already purchased land in Lahore. Sovereign guarantees are not involved in the project, as there is no component of foreign loans etc.
He said that the ministry was asked to provide Rs 6 billion guarantee but it was not forthcoming as the PHA has no risk and apparently it would be a construction-sale agreement. The final decision with regard to sovereign guarantees lies with ECC, he added.
The meeting was attended, among others, by Senators Hafiz Abdul Malik Qadri, Shuja-ul-Mulk, Bibi Yasmeen Shah, Dr Abdul Khaliq Pirzada, Sardar Mohammad Jamal Khan Leghari, Sardar Mehmud Khan, Mir Mohabbat Khan Marri, Nisar A Memon, Amjad Abbas, Syed Muhammad Hussain and Muhammad Saleh Shah, Secretary, M/o Housing & Works, Secretary Senate, Raja Muhammad Amin and Addl. Secretary M/o Finance.
Later addressing a press conference , Rehmatullah Kakar claimed that the ministry has satisfied the Committee on Housing and Works over the issue of awarding Rs 60 billion contract of PM Housing Scheme to a UK based company 'Imperial Houses' without inviting open bids and no company has been finalised yet.
He said that the news items appeared in the media regarding this issue were baseless. Kakar said that the member of the committee who were not satisfied by the Ministry on this issue were of the view that the Ministry should not invite foreign investors in the bidding. Kakar ensured full transparency in awarding of contract for the implementation of the Prime Minister Housing Scheme.
"For further transparency on January 16' 2009 all the contractors will be invited to give detailed briefing", he said. He further informed media men that a UAE based group is ready to invest $2 billion in the housing sector of Pakistan. Foreign companies have shown their keen interest to invest in housing sector in Pakistan but the baseless news in the media no doubt would discourage them.
He further said that the issue regarding providing accommodation to the government officials of grade 17-22 will be soon resolved. Answering to a query about the development of sector G-14/1 he replied that the process of acquisition of land is under process and as soon as it will be completed the planning and development work will be started.