400sq yrd houses, warehouses in category
Up until recently if you wanted to build a house on a plot under 400 square yards in Karachi, the Sindh Building Control Authority made you jump through 18 hoops before it gave you a permit.
Not just that, it took about 261 days to get the permission. It would also cost you roughly one million rupees as well.
The good news is that this red tape is about to be done away with.
The SBCA has promised to take just 30 days to give construction permits for one specific category of building. It recently posted the announcement on its website for category I construction.
Category I is:
1. Residential bungalows up to 399 sq. yds. with (ground+1) floors
2. Any other building on a plot up to 120 sq. yds. with a height of up to 33 ft.
3. Any non-obnoxious warehouse with a height of up to 35 ft. and or on a plot up to 1,100 sq. yds.
The new streamlined procedure does away with an NoC from the water board, floor certificate from a structural engineer, the environmental NoC and NoC from the excise and taxation department. One of the experts working on the project explained that this 18-step process had a lot of duplication that was being done away with. Also, it did not make sense for an authority whose job it was to give permits to make people run around to other authorities to get them.
But why has the SBCA put “non-obnoxious” warehouses in this category? A non-obnoxious warehouse is a warehouse for, say, books. The SBCA is testing how long it takes to give a permit for a warehouse as a case study as part of its reforms work with the World Bank.
The reforms are connected with Pakistan’s desire to improve its Ease of Doing Business Ranking. One way that is measured by the WB is how easy it is to build a warehouse. “For this first in a series of reforms, the procedures and the timeline for approvals of construction permits for residential houses and non-obnoxious warehouses have been revisited,” an SBCA press release said.
Pakistan ranks an abysmal 136 out of 190 countries the World Bank measures for its Ease of Doing Business ranking that was launched in 2002. The ranking measures business regulations and how these rules are enforced in a country’s two biggest cities. In Pakistan’s case, the WB looks at Karachi and Lahore.
Countries want to improve their EoDB ranking as they feel it is linked to how well they can attract investors. For Pakistan, as one can imagine, getting FDI is a top priority going forward. Investors should feel that it is easy to do business in Karachi. So, for example, one way the bank likes to measure this across different economies, is how easy it is to build a factory warehouse. How much time does it take and how much does it cost to complete each procedure for a construction permit.
Right now, in Karachi, as mentioned above, it takes 18 steps to get a permit. In South Asia the average is 15. In Karachi, this translates into 261 days to get the permit compared to 165 elsewhere in South Asia. Lahore’s LDA has promised 18 days. The bank sets the estimated value of a warehouse at Rs8.5m.
Just to give you an idea of how much hassle it can be, take a look at the list of 18 steps to get a construction permit in Karachi:
Obtain letter from the relevant land owning authority confirming the land title
Request and obtain building permit from the SBCA.
File an environmental checklist with the Environmental Protection Agency
Receive a site inspection by the SBCA
Notify the SBCA of the completion of the foundation
Receive foundation work inspection from the SBCA
Submit the first floor Certificate Form to the SBCA
Receive first floor slab casting inspection from the SBCA and await approval
Submit the second floor Certificate Form to the SBCA
Receive second floor slab casting inspection from the SBCA and await approval
Request a copy of property tax valuation and copy of the certificate from the Excise and Taxation Department
Receive an inspection from the Excise and Taxation Department and obtain a copy of property tax valuation and copy of the certificate from the tax authorities
Request water and sewerage connection
Receive Site Inspection for Water Connection
Receive inspection for final water connection and installation of water meter
Apply for completion certificate and request final inspection
Receive final inspection
Receive completion certificate from the SBCA