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What’s behind the financial crisis facing the Karachi Development Authority?

SAMAA Digital attempts to find out the answer

SAMAA | - Posted: Mar 27, 2021 | Last Updated: 3 months ago
SAMAA |
Posted: Mar 27, 2021 | Last Updated: 3 months ago

Photo: SAMAA TV FILE

The Karachi Development Authority has been facing a financial crisis for the last two years. It has reached a point where the authority is unable to pay salaries and pensions to its employees.

KDA employees have not been paid for the last three months.

The Sindh local government department last week requested the provincial cabinet to approve a loan of Rs844.159 million to clear outstanding dues of the KDA. It said the loan would be paid back by auctioning KDA plots.

But Sindh Chief Minister Murad Ali Shah said the KDA, local bodies and market committees were autonomous. They had their own system to pay salaries, gratuities and pensions to their employees, he said.

CM Shah asked officials why these bodies had failed to maintain financial discipline and kept on requesting for grant-in-aid to pay salaries and pensions. The chief minister inquired about the way these local bodies utilised their pension fund.

The Sindh cabinet then constituted a committee to examine pension funds of the KDA and other local bodies, and identify the reasons behind the financial crisis. The committee, headed by Sindh Local Government Minister Nasir Shah, includes Ismail Rahu, Saeed Ghani, Imtiaz Shaikh and Murtaza Wahab.

The committee was asked to report its findings to the cabinet after examining all these funds. SAMAA Digital spoke to KDA officials about the financial crisis and how it occurred.

Covid-19 pandemic

KDA Recoveries Director Raza Muhammad Qaimkhani said the authority has two major sources of income: funds collected through its Land Management Department and the auction of KDA commercial properties.

The KDA Land Management Department has 32 heads from which it generates funds to run the authority. The KDA receives a certain amount from applicants in different heads. These heads include lease fee, transfer/mutation fee, allotment order fee, fee for certified true copies of documents, fee for pre-lease transfer by joint declaration, execution of lease deed and permission of mortgage.

The coronavirus pandemic badly affected public transactions in these heads last year, according to Qaimkhani. In 2020, the KDA head office remained dysfunctional for six months, which created a huge backlog of cases.

The clearance of around 600 pending cases started later but the pandemic is still not over. It affected KDA recoveries and finances.

Delay in auction of KDA plots

Another issue was a delay in auction of KDA plots. The last auction was held in 2017, the KDA recoveries director said.

The KDA plans to auction its commercial plots in different townships. It will soon issue auction advertisements.

“The KDA auction will help the authority overcome its financial crisis,” Qaimkhani said, adding that the authority has a recovery target of 2.85 billion for FY2020-21.

It aims to raise Rs1.85 billion from 32 public transaction heads and Rs1billion from the auction of its commercial properties.

The authority has already generated Rs1.45billion from public transaction heads.

Sindh government policies

Another senior KDA officer, who wished to remain anonymous, told SAMAA Digital that the Sindh government policies had destroyed the KDA.

“Why were KDA properties not auctioned in the last three years,” he questioned. The officer himself answered it, saying that the Sindh government kept shuffling KDA directors general over these years.

Six officers have been appointed the KDA director general since the removal of Sami Siddiqui in 2018, the KDA officer said. This rapid change in top KDA brass hampered the authority’s working, he added.

The officers who have served as the KDA director general during this period include Mansoor Rizvi, Abdul Qadeer Mangi, Dr Jamil Mandhro, Dr Saif-ur-Rehman, Asif Ikram and Nasir Abbas Soomro. Soomro has been serving on the post for the last six months.

The officer said the KDA, which was established in 1957, continued to develop the city till 2000. “Back then, it was an authority with complete authority.”

The Master Plan Department, Planning & Urban Development and Design Bureau were integral parts of the KDA, according to him. These departments generated revenues for the authority.

But the KDA was given under the control of Karachi City District Government after the introduction of Sindh Local Government Ordinance, 2001, he said.

In 2016, the Sindh government made the KDA autonomous by implementing the Sindh Local Government Act, 2013. But it did not return the Master Plan Department, Planning & Urban Development and Design Bureau to the KDA.

KDA Land Department officer Muhammad Qasim said the authority’s financial position would soon be stabilised as pending cases in the Land Department were being fast-tracked. Right now, he said, there is only one-month salary delay in the KDA.

KDA employees have received their salaries for the month of February, according to Qasim. Previously, there was a three-month delay.

The auction for commercial plots would end the KDA’s financial crisis, he added.

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