Business district for Islamabad

AT the fag-end of its rule, the PPP-led coalition government is making a delayed move to embark on a tricky civil service reform — monetisation of housing facility for government officers.

The plan comes in the wake of an all pervasive institutional mismanagement — a major snag in improving public service delivery. Effective civil service reforms could lead to better governance and improved delivery system.

But pick and choose style of trouble shooting, as has quite often been the norm, could create more distortion and lead to manipulated misuse of public resources. This has been witnessed in recent months after the introduction of monetised transport facility for government officers.

The success of the housing monetisation depends on its formulation and execution by independent experts. The bureaucrats, having personal interests on top of their agenda, cannot be trusted to be judges of their own cause. However, the reform should make them better off through fair play.

In the recent months, a number of meetings have been held to finalise a pilot project for monetisation of housing facility for federal government officers (grade 17 and above) in the federal capital. The overarching stated objective of the exercise, which the economic managers plan to accomplish before coming elections, is to remove discrimination in housing provision and in the process vacate high value state land for multi-purpose high- rise buildings.

Official estimates put the total sanctioned strength of grade 17-22 officers at about 28,000. Of this, the working strength currently stands at about 21,300 officers and about 16000 of them are currently posted in the federal capital. Interestingly, only 14 per cent of Islamabad-based officers occupy government accommodation in or around three kilometer radius of the federal secretariat. Another 21 per cent are availing hiring facility and remaining 65 per cent drawing house rent allowance at 45 per cent of their basic salaries. The monthly expense of these 16000 officers is estimated at Rs500 million.

This has created a wide disparity and offers room for political patronage and manipulation. For example, the maximum hiring ceiling for an officer is less than Rs35,000 per month while market- based rental value of such housing is up to Rs250,000 per month. Posh government houses spread over a canal consume about Rs5 billion in annual maintenance cost. According to recent reports, an influential head of a civic body spent Rs4.6 million on refurbishment of the government house before moving in.

It was in such a situation that a number of cabinet decisions required a ban on spending on construction of houses, and instead allowed improved rentals ceilings to encourage government employees to build their own houses.

As part of the new proposed monetisation policy, all federal government officers would be offered market- based housing allowance along with salary. Starting from Islamabad, they would be offered housing monetisation at six times higher the existing hiring ceiling. The financial impact of the plan is estimated at about Rs18 billion a year. It requires that all government houses should be vacated within six months and occupants be provided with cash advance for six months to arrange their own housing.

The land so vacated and estimated at about 600 acres would be allocated for ‘High Density Zone’, with high-rise (mostly 20-story), mixed- use buildings for economic activities and general housing on the pattern of Madinatul-Jumairah or Burj Dubai.

The scheme would be executed through private-public partnership for reviving construction, investment, productivity and employment. A master plan is currently in formulation stage to create a Central Business District in the capital by involving private sector investor, real estate investment trusts, banks, State Life Insurance, National Insurance, Defence Housing Authority and other similar public and private institutions.

Planners estimate a potential Rs14 trillion income opportunity be created over a period of 10 years from Islamabad’s 548 acres of vacated land with an initial investment of about Rs140 billion.

“An officer, who apparently takes home a salary of about Rs100,000 per month, costs the government about Rs800,000-100,000 per month if his housing facility, two official plots and other benefits are put together”, he said.

Resistance to the initiative could not be ruled out. Many question why the government should pay three times higher salaries to those who were happy with lower salaries and no housing facility; how would those living like viceroys give up luxurious government residences? Some suggest that government should test the market appetite by offering such high density, high-rise buildings on vacant land on the airport corridors before taking a major risk on eve of elections.

Source: http://dawn.com/2012/10/01/business-district-for-islamabad/