50 big construction companies wind up mega projects

Karachi: Due to current political situation, 50 prominent construction companies have wound up their mega housing projects across the metropolis, it is reliably learnt. Talking to Business Recorder Hafeez-ur-Rehman Butt, former chairman, Association of Builders and Developers of Pakistan on Wednesday said around 50 prominent construction companies closed their businesses in the city.

With the result, a large number of builders have started rolling back their projects across the country, he added. 'A large number of construction companies are keen to establish businesses at Dubai rather than Pakistan due to current political situation and poor law and order,' Butt said.

He said the construction activities have become slow following the announcement of holding of general elections in February. However, investors who plan long-term investment in private housing projects have been waiting for favourable circumstances.

He said investors have lost confidence after the judicial crisis in March 2007. Before the crisis, the construction industry was growing at a rapid pace in the country, he added. Butt revealed that only 0.25 million houses had been constructed last year, however, the country still needs upto 0.7 million houses annually.

The companies cannot meet the demand as they can only make 0.4 million houses per annum with their maximum strength, leaving a huge shortfall, he added. He cited rapid increase in the prices of construction raw material such as cement, steel, land, etc, as chief factors behind the shortfall.

He stressed the government to bring down the prices of raw material besides keeping gas tariff at a reasonable level, which contributed to the rising prices of raw materials, he added. He said that 72 other industries were intertwined with construction industry and feared that if the government did not take immediate action, it will be difficult for the industry to survive.