Home financing scheme for KP govt servants approved

PESHAWAR – Khyber-Pakhtunkhwa Chief Minister Pervez Khattak on Thursday formally approved the home financing scheme for government servants under Khpal Kor Low-Cost Housing Scheme (KKLCHS).

A memorandum of understanding ceremony with Bank of Khyber (BoK) and Habib Metro Bank (HMB) was also held here.  It was attended by Adviser to Chief Minister for Housing Dr Amjad Khan, Adviser to Chief Minister for Planning & Development Mian Khaleeq ur Rahman, Chief Secretary Muhammad Azam Khan, Secretary Housing Waqar ul Hassan, DG Provincial Housing Authority (PHA) Saifur Rahman Usmani, regional heads of the commercial banks and others.

The chief minister said that the home finance facility was initially intended for about 120,000 government employees to have their own houses. He said that a financing of around Rs216 billion was required at a rate of Rs1.8 million per unit. The finance will be provided for single-storey five-marla houses having two beds, a drawing room, kitchen, two baths, a car porch, backyard and a boundary wall with a specific design to be provided by the PHA.

The unit will cost Rs1.8 million including the cost of plot, infrastructure development, and construction. He said that the provincial government also wanted to provide the facility of 200,000 units for the general public in the first phase, which requires about Rs 360 billion. Both these interventions will collectively plug the demand-supply gap and deficiency of houses by 15 percent, he said.

Khattak directed the housing department to chalk out comprehensive short and long-term plans with the active involvement of the private sector in this regard. He expressed the confidence that the housing scheme would attract Rs20 billion investment. He asked the department concerned to provide all facilities to the investors as well as the buyers under one window operation.

He agreed with the proposal of one IT-based book for the plot and house owners containing all details including purchase, transfer deeds, and registries etc. He also directed to develop all facilities including schools, hospitals, playgrounds, markets and mosques to in the schemes.

He said that earlier housing schemes failed due to lack of basic civic facilities. He said that from now onwards, all infrastructure and civic facilities would be the basic features of housing schemes, which will get encouraging response from the public.

The financed amount will be deducted from salaries of government servants over a period of 20 years. The banks will charge KIBOR+1/2% spread. The plot will be accepted as collateral and as 20% equity. The home finance will be governed by a tripartite agreement between the bank-employee and endorsed by the PHA.

There were about one million government servants and pensioners in the province and there was a deficiency of about 2 million housing units in KP. The chief minister said an estimated minimum investment of Rs1.8 million per unit totaling Rs. 3752 billion was required which could not be met by the government in its limited resources. He said the mobilization of the private sector could help plug the gap and control souring real estate prices.

The chief minister was told that the PHA was working on a multidimensional plan to promote the private sector investment, avail bank home finance facility to government servants and the general public, develop housing schemes and establish satellite towns in all districts to build new planned alternative cities.

Two mega housing schemes are being established under public-private, commercial/residential properties have been offered to the private sector for the construction of multi-billion multiplexes and townships and the land for the establishment of satellite towns was being identified and surveyed.

The flagship multi-billion Khpal Kor low-cost housing scheme was being implemented through bank home financing. Under the scheme, banks will provide the finance facility to government servants in the first phase. In this connection, the government of KP was playing the role of enabler, facilitator, and regulator.

Plots are available in the already developed housing schemes namely, Mulazai Peshawar, Jalozai Nowshera and Jerma Kohat. The plots will be allotted to the government servants through a computerized draw. The facility will also be available to the existing allottees of the above-mentioned housing schemes.

The construction will be completed in one year. The allottees will construct their houses themselves. The scheme will be rolled out to the sites identified for the satellite towns where both conventional and low-cost housing will be established. Besides this, another site was being developed for the 2K model house scheme on the state land in Dheri Zardad near Charsadda Interchange.

In order to avail the bank home finance, a series of meetings were held with regional chiefs of commercial banks but the banks were reluctant to lend the financing.

Later, the issue was taken up by the chief minister with the SBP governor. 

In follow-up meetings, the commercial banks agreed to finance the housing scheme on certain terms and conditions.

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