Zameen Interviews—Mr. Zaighum Mehmood Rizvi Talks about Naya Pakistan Housing Scheme

On April 17^th 2019, the current government, under the leadership of Prime Minister Imran Khan announced a new initiative to build 5 million low-cost houses. This initiative has been titled Naya Pakistan Housing Scheme. The announcement of the housing development was quickly followed by the formation of a 17-member task force by Prime Minister Imran Khan, chaired by Mr. Zaighum Rizvi.

Zameen.com sat down with Mr. Rizvi recently to discuss how he is overseeing the government’s flagship housing project and some associated details of the project that might be of interest to our readers.

The interview with Mr. Zaighum Mehmood Rizvi is the second one in our ongoing series of interviews with prominent personalities to educate the public on a number of societal issues and current affairs. The new platform launched by Zameen.com is called Zameen Interviews, and the first episode featured an interview with Mr Iftikhar Durrani, who serves as a Special Advisor to the Prime Minister.

Mr. Rizvi has served as an Advisor to the State Bank of Pakistan and as the CEO of the House Building Finance Corporation. He is a Nominee Director on the Boards of various corporate entities in the financial & manufacturing sectors. Mr. Rizvi has also worked on multiple United Nations missions for Pro-Poor Housing Finance in Asia. He is widely accepted as an expert on low-cost housing and here’s what he had to say about Naya Pakistan Housing Programme (NPHP):

“It is not the first time that we are talking about this plan that houses should be constructed”, began Mr. Rizvi. “This [plan] has been a part of political slogans in our country since the 1970s.”

Discussing the concept of housing for the people in light of the political history of Pakistan, he said, “When we talk about housing, the most popular slogan globally in today’s time is ‘housing for all.’ If all the institutional, regulatory, and legal work which is being done now was done in the 1970s, then we would have only had to construct the building, like [in a construction project] the floor plan is approved and the location is decided and all you have to do is construct the building. That’s the issue we are facing nowadays.”

“In the past, if people had said that they could only construct 10 lakh houses and could not construct more than that, then they could have claimed that our target of 50 lakh houses is very ambitious, not wrong, but very ambitious. Today, if they are saying that the target is too big, it is not appropriate to say so, because the desired target will keep on increasing with every delay if no work is being done on it”, he further continued.

Question: How is this scheme different from previous government housing initiatives?

“About Imran, I personally believe, there may be some fault in his ideas or deliverance, as he’s a human after all, but he is a person who is incorruptible and unpurchaseable”, responded Mr. Rizvi.

Talking about his own interactions with the PM, he said, “When I was appointed with this responsibility, he told me in a meeting in front of everyone, “Mr. Zaighum, if anyone pressurises you for any wrongdoing, I am available 24/7.” So, I may make a mistake unintentionally, but I won’t make a mistake deliberately because I know I am not supposed to make any mistake and my leader is also not in the wrong.”

It can be said that Mr. Zaighum Rizvi was of the opinion that good results can be expected from Naya Pakistan Housing Scheme since the right people are in charge of affairs being led by the Prime Minister himself.

Question: What led to the failure of previous government housing schemes?

“This often happens in Pakistan that the first bid is usually low but in the end, the projects are 3 to 4 times more than the first bid. Similarly, you might have heard recently that the original cost of the trains was 50 Arab or 25 Arab but has now almost reached 125 Arab. The fact is that when the person took the contract of 25 billion, they already had the target of 150 [Arab] in their mind. So, there is either use or abuse,” answered Mr. Rizvi.

He further expressed his opinion saying, “When I asked the people about Ashiana [Housing Scheme], they said, basically there was no problem in the laws but power was abused and the contract was taken [by force] which led to the violation of laws. After that, they abused [their rights], gave lands [away] and there was no construction or delivery of results. Now, this is abuse.”

Considering his statement, we can deduce that the current government is hopeful for the success of NPHS based on increased transparency and keeping a check on matters. 

Question: What role does culture play in the implementation of low-cost housing projects in Pakistan?

Taking an example of Pakistan’s biggest metropolis, Mr. Rizvi responded, “In Karachi, horizontal [construction] is not acceptable. They consider it a wastage of land. The culture of high-rise has developed over there. It was not there, by birth or since 1947 [but] you have to maximise the use of the land. High-rise is considered a better use of the land or what you call densification.”

The conclusion we can draw from this statement is that houses or housing in different cities of Pakistan will be developed as per the prevailing culture of that city and the lifestyle of the locals.

Question: Do you think the State Bank’s revised policies would lead to a situation similar to the 2008 American financial crisis?

Expressing his views on the matter, Mr. Rizvi was eager to enlighten people over the reason behind the 2008 American financial crisis.

He said, “People do not understand the reasons for the subprime crisis which took place in 2008. People were given loans at 110% of the housing costs. Banks had more liquidity and it was done under a program. It started failing because usually in the US, unlike in our country, there is a cycle of housing prices, which changes every 5 years. Although it [the cycle] is linear, it rises and falls constantly. The market has a linear high and rising trend but it also faces down cycles sometimes. When they faced down cycles at 110% in the mortgages, foreclosures began. Suddenly, many houses came under foreclosure. It is mostly because of their mismanagement. Their regulatory regime was also quite defected, which they improved after the 2008 subprime crisis. So, housing is not a bad loan. In fact, it is the safest and most secure loan.”

The Subprime Crisis referred to above, wreaked havoc on the housing industry in 2008 in the US, affecting the home loan industry due to borrowers being approved for unaffordable loans. Home loans and financing is a relatively untapped industry in Pakistan and if it is targeted correctly, it can be a highly lucrative option for the country and the people as a whole, especially based on the Policy for Low-Cost Housing Finance released by the State Bank of Pakistan in March 2019.

Question: What is the role of the task force that you are chairing?

Mr. Zaighum Rizvi also explained the reason behind the creation of the task force and also elaborated on its role. Responding to the question above, he stated, “Imran Khan was told that the institutional framework which we are making [for] housing authority, legal framework, foreclosure laws and real estate framework, will go through the Act of the Parliament and the Senate. It has its own legal procedure which will be time taking. So, it’s very nice of him to consider what should be an interim arrangement till then. So, he made a task force.”

For the readers who might be wondering about the law, Foreclosure Law is generally a legal process in which banks take back possession of an unpaid or defaulting property, which is currently not in practice in Pakistan.

Question: In which provinces is the task force currently active?

“Task forces have been established in two provinces. In Punjab, the task force is actively involved in the work and the Federal Government is not interfering [with their work]. Whenever they need our support, we give it to them. A task force is also formed in KPK which will also begin working soon,” said Mr. Rizvi.

After explaining how the task force had been created for two of the provinces, he further elaborated on the role of the task force itself and how it would help the authorities once they were functional. On this note, he added, “In this way when the authorities will become functional, how much of the work is complete, how much of the work is under process and how much of the work is pending for future planning; all that [data] would be lying on their tables. It’s not like they will start the project from point zero. It will already be somewhere in between.”

Question: How do you plan to rehabilitate the slum dwellings across Pakistan?

Speaking historically on a personal note, Mr. Rizvi said, “Why don’t people enter my house and build slums in my lawn? Why am I negligent when it comes to government land? 90% of the slums are on government’s land but nobody bothers. Have you ever heard that slums have been formed on any private property? No, because over there, I [as the owner] am very vigilant. But now it’s done because the government showed its negligence.”

But he was hopeful about the future, saying, “Our plan will not be enforced on anyone but rather, we would offer them some incentive in a respectable and in an honourable manner. We would reward them somehow. Some models are being developed for it. Such projects are taking place all over Asia, in Mumbai and other cities of India. In Thailand, the system is very good. It’s happening in Indonesia as well. Wherever there are slums, including in Vietnam. Not to even mention countries like Brazil, where this market is much more established.”

What Mr. Zaighum Rizvi said makes perfect sense since slum rehabilitation is actually a prospect that many can look forward to, with an incentive for those who wish to upgrade their quality of life and move towards a better future.

Question: In your opinion, which is the most successful international low-cost housing model?

“Singapore is one of the countries in the world which has planned very decently. The PM has therefore advised that we take guidance from Singapore on urban planning and slum rehabilitation. In the 1960s, Singapore was one of the worst slums in the world. You can Google this and verify it. Today, it claims to be one of the best, organised, and disciplined cities in the world,” expressed Mr. Rizvi on the matter.

Question: How do you plan to address housing shortfall in rural areas?

Elaborating on statistics, Mr. Rizvi responded, “For the first time, in this program, we have announced that almost 40% [of the houses], which is almost 20 lakh houses, would be made in rural areas. [We] would try to make the lifestyle of the villagers relatively decent and would try to develop their culture. This target of 20 lakh is a very big target and a very challenging target because, in 70 years, no work has been done in this area.”

We can gather from the above statement that the government has identified and made plans for rural development and is acknowledging the importance it holds in the eyes of the government. Also, property development in rural areas will not only benefit the real estate sector but will also introduce new opportunities there, relieving the pressure on urban centres and decreasing the rate of urbanisation, which is at an all-time high as of now. 

Question: How is the private sector being incentivised?

“What incentives are we giving to the private sector? The private sector requires 2-3 types of incentives. The first incentive required is a regulatory incentive, in which we concern ourselves with matters like the floor area and so on. For instance, if the commercial area is 5%, we might allow them to utilise 10% and other such regulatory incentives”, said Mr. Rizvi, while listing down the benefits that the project would bring for the private sector.

He continued further, saying, “Secondly, work is being done on developers’ finance. The State Bank and the task force are working together on developers’ finance. Previously, they did not get any financing. The developers have not gotten any finance from the bank till date in Pakistan. They used to arrange it on their own, like taking advance from people. So, we are working on the developers’ finance. The third [incentive] being, land availability. Previously, small pieces and parcels of lands were given to the people. Now, we are making lands available on a large scale.”

To put Mr. Zaighum Rizvi’s words in a nutshell: Better regulations, finance for the developers, and better availability of land are the three key takeaways for the private sector concerning the development of Naya Pakistan Housing Scheme.

Question: How will the Real Estate Regulatory Authority bill affect the country’s housing sector?

Real Estate Regulatory Authority (RERA) plays a significant role in the development and regulation of the real estate sector in Pakistan.

Answering our question, Mr. Rizvi noted how RERA could resolve some of the most common issues associated with real estate in Pakistan and responded, “Firstly, we need to restore the trust of the people on the developers. You have witnessed a lot of Ponzi schemes. When these Ponzi schemes are introduced in the system, the fraudulent [developer] keeps on taking money from the people for about six months and then disappears without anybody knowing their whereabouts. Thus, RERA will ensure such things, that whether a developer actually has any land [for investment] or not, or if they have the construction capacity they claim or not.”

Question: How is technology being used in this project’s execution?

“In pre-fab [construction], they make slabs in advance instead of constructing a wall and set it up [on-site] to begin construction of the house. This not only increases the speed [of the project] but also, pre-fab manufacturers have already met some standards, specifications and maintained the quality standards. Then, there’s also a concept of on-site formation, where pre-fab slabs can also be made directly on construction sites. Work is being done on this,” answered Mr. Rizvi, communicating the use of modern methods of construction for Naya Pakistan Housing Scheme.

He continued the conversation further, saying, “Large international contractors are also coming in. Chinese contractors met the Prime Minister recently. Many of them are coming from China as well. They’re coming from Turkey as well. Contractors from Qatar and even Bin Laden group from Saudi Arabia has shown interest. But even they are still analysing the environment. Right now, we do not have any large-scale manufacturers in our country. The foreign contractors will bring technology over here and later, an agreement to transfer that technology would be made with them.”

It is to be noted that a Prefab Building or a prefabricated building consists of factory-made units that are transported and assembled on-site to form the complete building in a minimum amount of time. Many contractors in Pakistan are now focusing on this quick, high-quality, and efficient means of construction, which is helping them complete housing projects at a rapid pace.

Question: How are you empowering women through this model?

Expressing his views, Mr. Rizvi said, “[This can be done by ensuring that] the woman or the co-owner is the borrower. For instance, if a person takes a loan of 15 lakh, sometimes the wife is unaware of it. Instalments would be made by starving her kids but she would not be made aware of it. We have observed that if a housewife knows that an instalment of Rs. 15,000 is to be paid every month, she will show more concern about this than her husband. She will make every sort of sacrifice to provide shelter for her kids.”

Mr. Zaighum Rizvi has hit the bullseye here since women are playing a bigger role in our economy and their contribution to the overall economy is getting more significant with every passing day. Plus, having two partners working towards a common goal is bound to bring better results sooner than expected.

Question: What steps have you taken to ensure the youth’s involvement in NPHP?

Sharing some lesser-known updates with us, Mr. Rizvi responded, “The Prime Minister is very focused on the youth. He is so much obsessed that there should be something for the youth in every field. For this, he said to me that we are making small companies, construction companies, for the graduates of universities such as young engineers, architects, town planners, who are trying to find jobs and are unable to find any. So, in the rural housing program, we will give first priority to those children, who are young engineers. They are qualified and everything, so why not? So far, the work carried out on rural housing has also been done by these students, the youngsters.”

“The bigger contracts of 200-400 acres would be given to the bigger developers, but we will also encourage them to engage these young companies and give them smaller contracts. For instance, if 6,000 houses are being constructed somewhere, you may give a sub-contract of 100 houses to these companies of young engineers,” he further added. This initiative will not only create jobs for new graduates but will give them a chance to get hands-on experience in the field and probably seek mentorship under larger firms with the hopes of better employment opportunities to follow.

Question: To what extent would this project improve our economy?

Mr. Zaighum Rizvi pointed out three major improvements that the project would introduce to Pakistan’s economy. He said, “Firstly, by itself, shelter and decent housing leads to economic empowerment. People living in a good environment have a different level of productivity in society from those living in an indecent environment. That comes naturally with the provision of shelter. Usually, in the slums, you cannot create decency in such a habitat. You must have seen the famous Slumdog Millionaire, So, this is one improvement.”

Continuing on the same note, he added, “Second [improvement] is of job creation. The investment of one dollar in the industry has a multiplier effect of 10 times in the real estate construction sector in terms of job creation. It is valid for those countries that have mechanised construction. Over here, construction is mostly un-mechanised and labour intensive. Hence, our multiplier effect will also help in job creation.”

“Third [improvement] is of the industries. Economic development will boost 42 industries. Like I said, [with the provision of] standardised doors, windows and cables. In our country, they [windows] have been traditionally made with wood but now, windows can be made with aluminium or even PVC. When these things are created on a mass scale, the industries will progress. Even the cement industry is thinking of increasing their capacity as the requirement increases,” he continued.

Wrapping up the impact of Naya Pakistan Housing Scheme on Pakistan’s economy comprehensively, we have the economic empowerment that comes with a better standard of living, the creation of additional jobs in labour-intensive projects, and the economic boost that can be expected by all the industries that are inter-connected to the real estate sector of Pakistan.

Question: Is there any message that you would like to give to the public?

Ending the interview on an inspirational note, Mr. Rizvi said, “Personally, I believe that the choice of not doing does not exist. As long as we produce children, we need to give them food, we need to give them clothing, and we need to give them shelter. Whether it is possible or not, is not a question. Not doing it, is not an option. How do we do it, is an option to consider! Let us all share the wisdom!”

To quote Mr. Zaighum Rizvi in his own words, “Not doing it, is not an option.” This sums up pretty much every individual’s struggle to provide food, clothing, and shelter for their family and loved ones. The only challenge remaining is discovering how to go about it in the best way possible!

The interview by Mr. Zaighum Mehmood Rizvi was followed by a discussion with Mian Mehmood-ur-Rashid on the challenge of building 5 million houses in 5 years. New episodes of Zameen Interviews are launched on Sundays on our Facebook page and YouTube channel, so don’t forget to stay tuned for more!

You can also read all about the latest property updates on Zameen Blog. Email us at blog@zameen.com if you have any queries or suggestions on how we can improve Zameen Interviews further for our audience.