Steep cost of housing recovery

A World Bank-ADB Damage and Need Assessment estimate has offered three stark options to Pakistan for undertaking repair and reconstruction of the country’s destroyed housing sector in wake of the super flood. Firstly, the total cost stands at a staggering $1.588 billion, with the minimum mandatory cost of restoring pre-flood conditions put at $1.483 billion.Secondly, if the financial conditions in the country were better the second option could be applied, with the total cost standing at a minimum of $1.690 billion. The third option before the government is to go in for a multi-hazard resistant standard, at a cost of $2.206 billion, of course subject to availability of resources, which is not the case as the response to the UN appeal has at best been only lukewarm. With the financial constraints the government is faced with, the minimum mandatory cost of $1.483 billion offers an attractive option, though managing this amount too would require of the government to make speedy and hectic efforts to generate additional resources by pruning its expenditure.

A rough estimate of the funds required is $1.483 billion, which may overshoot, because of the galloping construction material prices and labour charges. The annual pre-flood housing shortage in the country that had resulted in a huge housing backlog will certainly impede the post-flood reconstruction and rehabilitation phase. However, with meticulous planning and generation of additional resources, it should not be difficult for the government to meet the target.Involvement of prestigious NGOs with their grassroot outreach, along with government agencies can help circumvent or alleviate the implementation pitfalls. There is a perception that it would be best for the government to make cash payments to owners of damaged or collapsed houses so that they are able to purchase the construction material and undertake the project on a self-help basis, which will help save on labour charges. The displaced rural people and their families, who are often well versed in use of construction and repair implements, would enthusiastically participate in the project because they would keenly wish to be properly resettled.

The government will have to keep tabs on the spending of funds, given the immediate needs of the flood affectees, and to obviate the possibility of them preferring to spend the money to meet their immediate daily expenses. These people have not only lost their homes and hearths; they have also lost their livelihood as a result of which they are in dire economic difficulties. Secondly, there have been reports of bouncing of cheques. The best mode to help the victims would be to make phased cash payments, and tell them to make do with the amounts they have been given. A mechanism will have to be evolved to monitor utilisation of funds.The flood disaster contains a window of opportunity as well, because some of the principles of modern town planning can be applied, of course within available resources, to give the rehabilitated flood victims better living conditions, such as wider and better planned roads etc. And lastly, the biggest hurdle in implementation would be paucity of funds, for which the government will have to prioritise the PSDP projects to generate more funds.

The WB-ADB damage assessment involves mega-investment, to meet that, we will not only have to widen the tax net, but also drastically prune government expenses. There is a need to effect a drastic cut in the overblown size of the government, both at the centre and in the provinces which only promotes inefficiency and duplication of effort and paper work, it often leads to turf wars, resulting in hindrance to efficiency and delivery of service which should be the primary aim of a government. The sooner reconstruction and resettlement work is started to generate economic activity, the better for the country and its economy. It may also push up our GDP, which is a powerful indicator of the true state of economy, no matter what the government of the day claims – Brecorder