ALLOCATION OF BUDGET OPENS THE WAY FOR GOVERNMENT'S PLAN TO BUY HOUSES AND APARTMENTS FOR HIGH-RANKING OFFICIALS

Sujata Awale
The previous government’s action plan to purchase houses and apartments for judges and high-ranking officials may finally come to fruition with the allocation of the budget by Nepal government this year. The plan was put on hold last year due to lack of budget.

Previously, the government had decided to buy 25 individual houses and 25 apartments for former secretaries and judges respectively. The provision made under judicial administration in
this year’s budget states that the government shall provide in-tegrated housing facility to retired dignitaries and justices of the Supreme Court. “The term ‘retired dignitaries’ is vague and still needs to be clarified. But once that’s done, we will work on determining units of property that we will purchase for them,” says Suresh Prakash Acharya, spokesperson at the Ministry of Urban Development (MoUD).

Stating that the ministry has conducted physical inspections last year, Acharya says, “We’ve already formulated
the directives and conducted project inspection in the market.
With the public notice, we will soon commence the process for bidding to fulfil necessary requirements.“ According to him, as the housing facility is to accommodate VVIPs, VIPs and judges, the security system and proximity to Singha Durbar will be major determining factors in selecting the project, while other amenities and criteria will also be considered. He says that the number of units that will be bought has not been fixed yet, but that it will be both apartments and houses.

Real estate developers have welcomed the decision of the government to purchase private property and state it is a positive indication for the realty sector. Ichchha Bahadur Wagle, vice-president of Nepal Land and Housing Developers' Association (NLHDA), says, “The government's step to purchase property will definitely boost confidence of the general public, thereby positively impacting the whole sector.“

Wagle, however, has certain reservations about the plan. He states that simply following the Procurement Act to buy property may not be the best way to go ahead as it only stresses on competitive price. He says, “One should not compromise in terms of quality and security system of housing projects for high-ranking dignitaries. If the government proceeds with the existing Act and policies, it will have to overlook expensive projects even if they meet all the other criteria to the dot.“ Hence, he suggests the concerned authorities formulate a Special Act to address the criteria of purchasing houses and apartments for high-ranking officials.

On this, Kumar Ghimire, senior divisional engineer at Building Construction Maintenance Division Office (BCMDO), says, “This is the first time that the government is purchasing property for VVIPs. So, it would be wrong to assume what kind of challenges we will have to face or if we even face any problems at all. For now, we will proceed under the existing Act and policies.“

According to MoUD, the government has allocated a budget of Rs 100 million for the process. Commenting that the amount will be insufficient, Wagle opines, “The standard for VVIPs accommodation should be of grade A, with the facilities of every amenity, which will cost minimum Rs 13 million for each apartment spread over an area of 1,400 sq ft. The allocated budget will be enough to purchase only seven to eight apartments.“

Ghimire, however, says that it is only the initial budget to help them conduct necessary processes and other works. He assures that the government will allocate more funds after the units have been determined. According to NLHDA, there are altogether 4,000 unsold apartments units in the valley that were built with an investment of Rs 100 billion in total.

Wagle says that the procurement process should be hassle free. He articulates, “Developers should be able to sell their property to the government without any hiccups from the authorities and even for this, a Special Act is necessary.“

He also opines the existing housing and apartment projects should be graded before purchasing the property for high-ranking officials to ensure fair competition. “Otherwise, questions could be raised regarding the transparency of the whole procedure,“ he warns.

source: Awale, Sujata (2013),"Realty developers upbeat", The himalayan times,3 August 2013