Govt can generate Rs58.8bn by better use of land ‘occupied’ by federal govt employees: NGO

ISLAMABAD: The federal government can generate at least $58.8 billion by efficient and productive use of the land occupied by federal government employees while monetising the allotted houses to officials.

This was the crux of a webinar titled, “the waste of prime real estate in Pakistan, do we need high rises or farm houses”, organised by the Pakistan Institute of Development Economics (PIDE), here on Tuesday.

Answering a question asked by Vice Chancellor (VC) PIDE Dr Nadeemul Haque, the PIDE’s associate researcher Muhammad Azwar said that the public land occupied for the official residences and other purposes in the federal capital can be released and used for other productive economic activities given their location and opportunities it presents. He said that as per estimates the investment that can be generated after releasing the land and using it for mixed-use high-rise buildings amounts to $58.8 billion.

He further said that as per research the houses for government employees only in Islamabad are around 17,471, allotted to various categories. The total area that these houses occupy only in Islamabad is approximately 1,325 acres.

The perks such as housing for government employees can be monetised at market prices, instead of allotting them houses. The monetisation cost for employees that are currently allotted houses is Rs7.9 billion to 27 billion.

However, the total cost of monetising all the federal government employees will be between Rs135 to Rs741 billion annually at market-based rent. He said that such official luxury residents were not provided to the presidents and prime ministers of developed nations as in Pakistan are provided to even assistant commissioners and deputy commissioners.

State-owned land possesses immense potential despite that it is used for unproductive purposes; i.e., providing housing for government employees, at prime location with potential for generating significant economic activity.

The opportunity cost in the shape of forgone economic activity and opportunities for the society is huge compared to its current use by the state hence the term state captured real estate. The land can be unlocked and used for productive purposes benefiting the economy and society at large, which will require envisioning the potential alternative use, instead of looking at state-owned land in its current state. The case of state-owned land in Islamabad is presented here.

The total number of government houses for government employees in Islamabad is around 17,471, allotted to various categories. The total area that these houses occupy only in Islamabad is approximately 1,325 acres. The market value of only the land in its present state, excluding the structure, is a minimum of Rs2,278.6 billion.

The underutilisation is not just limited to government houses, we have other unproductive, and state-captured assets i.e., Clubs for civil servants, housing for politicians etc. Islamabad Club is located at a significant location and covers an area of 425 acres, which as per commercial estimates is valued at Rs2,819.3 billion (10.2 billion $). Similarly, the minister enclave and parliament lodges cover an area of 238 acres and have a significant market value of Rs688.4 billion.

Copyright Business Recorder, 2024