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The construction industry is considered the backbone of an economy. There are many other industries allied with this vital sector which also provides employment to thousands of skilled and other workers.
MM News met with Muhammad Ayub, Senior Vice Chairman, Association of Builders and Developers (ABAD), regarding construction activities in the country and the recent budget.
MM News: What relief should be provided for the construction industry in the budget?
Muhammad Ayoob: ABAD was looking at the steel and cement industry in the budget and what steps the government has taken as prices have skyrocketed due to cartels in these sectors.
If immediate steps are not taken, the construction industry will face more difficulties. To fulfill the prime minister’s vision of providing affordable housing, relief should be given to the institutions linked with the construction industry.
MM News: What is the role of construction industry in the economy?
Muhammad Ayoob: There are 72 sectors linked with the construction industry. Even if the wheel of a single sector churns, it will not just benefit the owners and workers but also the national economy. The construction industry has and will continue to play a key role in economic development through construction activities.
MM News: What is the role of the construction industry in creating employment?
Muhammad Ayoob: After agriculture, the construction industry the largest source of employment in Pakistan. There is a shortage of more than 10 million houses in Pakistan. This can be fulfilled by providing incentives and creating innumerable employment opportunities by reducing the tax burden.
MM News: How will the poor benefit from the Naya Pakistan Housing Programme?
Muhammad Ayoob: Naya Pakistan Housing Programme is the vision of Prime Minister Imran Khan. I think it is a great project as people can receive their own house by receiving 90 percent capital from banks and have to pay the remaining from their own pocket. If the government increases the limit, then many people can benefit from it.
MM News: Why are builders and developers reluctant to launch new projects?
Muhammad Ayoob: There is no denying that Pakistan is facing a housing crisis and the government is giving priority to the construction industry. However, the difficulties faced by builders and developers in approving new projects have not lessened.
After the 18th Amendment, provinces have been autonomous and the federation cannot intervene directly. There has been some improvement in Punjab but the problem persists in Sindh where there is unnecessary delay in approving maps and other projects which keep investors away.
MM News: What are the obstacles being faced by the construction industry?
Muhammad Ayoob: There is an urgent need for housing in Pakistan. Despite the support by the government, construction activities remain stagnant due to non-approval of projects. This has eliminated the atmosphere of competition and led to an increase in prices.
If the obstacles in the approval of the projects are removed, the construction activities can be intensified and the prices will come down which will stabilize the industry and the economy.
MM News: Will reduce interest rate affect construction activities?
Muhammad Ayoob: Interest rates are already low at the moment and all banks have to participate in the Naya Pakistan Housing Scheme. I think the current interest rate is good for business and investment.
MM News: How will the common man benefit from the housing subsidy?
Muhammad Ayoob: It is important to understand the subsidy given by the government. You will not get a subsidy on purchase of a house but in terms of the capital from the banks worth Rs300,000.
MM News: How will the government benefit from construction on Buddu and Bundle Island?
Muhammad Ayoob: Megaprojects like the development of Buddu and Bundle Island will not benefit not only the construction industry but also allied sectors. Most importantly, it will boost construction activities which will benefit the entire economy. It could perhaps change the fate of Sindh.
MM News: What is the reason for the non-implementation of one-window operation?
Muhammad Ayoob: There has been a long-standing demand for a one-window approval which has not been completed yet. If a map layout is approved in 45 days, the prices may go down. The reason for stopping the one-window approval is corruption.
There are unnecessary delays in the approval of various housing schemes, which discourages investors and raises the cost of projects and eventually prices. Builders have to end up paying bribes for the approval of their projects. We can revolutionize the construction industry if corruption is eliminated
