LDA’s new commercialisation policy set to collapse

LDA’s error-ridden new commercialisation policy, announced on July 2 with pomp and show, is set to collapse as courts shall be moved against the policy on July 14 (today) claiming it to be unjustified, anti-public and full of anomalies.
The first irregularity to rock the commercialisation policy is the delay in its gazette notification. As per rules, unless a gazette notification is issued, the policy cannot technically come into force. Other platforms have questioned the withdrawal of all building height and plot size limits.
“LDA does not have structural engineers to check the structural stability of any building however the commercialisation policy ends all building height limits” a senior LDA official told Pakistan Today, declaring the change ‘incomprehensible.’
LDA Chief Town Planner Muhammad Akram Chaudhry said that rules had been passed after its approval by District Planning and Design Committee under Rules-51 of LDA Land Use Classification (Classification, Reclassification and Redevelopment) Rules vide notification No. SO (H-II)5-2/81.
LDA director commercialisation Muhammad Fahim said that the salient features of the new commercialisation rules were publicized through media. He said the decision to end building height limits and undoing plot size were taken to attract commerce. “However, a limitless building is not possible,” he said, “rules already dictate that the building on a one kanal plot can not exceed 38 feet height and 3 and 4 car parking spaces must be created.” He also said the new policy would appear in the gazette soon.
Stakeholders must be
on-board: Barrister Zafarullah who filed the case said that commercialisation policy could never be enforced unless commercial plot owners were taken on board. He said that the LDA changed rules whenever they were subjected to court examination. “Neither stakeholders were taken into confidence nor policy was vetted by competent authority,” he added.
He said that new policy had put people having residential plots in commercial zone in peril. “Those who are not well-off and own a residential plot between two commercial plots can not survive. They shall have to get their plot commercialized, and shall have to pay over Rs. 4.5 million for a one kanal plot,” he added.
He said that new move had undone the annual commercialisation policy which was injustice to existing commercial plot owners. As per the previous annual commercialisation policy, commercial plot owners had to pay a much lower commercialisation fee, he added.
Failures of the old policy: Data available to Pakistan Today reveals, LDA imposed a 6 percent as commercialisation fee on annual basis in 2009 against 3 percent in 2008. But the story did not end here. The fee soared to 9 percent at the end of 2010 and surged to 12 percent in 2011. The policy was set to expire in 2011. The rise in fee means those who paid about Rs 80,000 in 2008 shall now have to pay Rs 800,000.
Data reveals that before 2001, LDA would commercialize one kanal property on permanent basis by getting 20 percent of total value of land under scheduled rate, typically called DC rate issued by government. After 2001, LDA continued the commercialisation policy on permanent basis on 20 percent changes but allowed the conversion of residential areas into commercial zones on an annual basis. Under the annual arrangement, people had to pay 3 percent of the 20 percent fee of total value of the property. And then pay 10 percent the next year. Instead of open plots, only the residential buildings were allowed to be change into commercial units. The policy led to a commercialisation mess creating problems including social and cultural constraints, traffic gridlocks, chaotic parking, noise and air pollution and others. With the shift in policy, property rates jumped and brought a real estate boom.
The 2008 formula was followed by citizens wishing to convert their plots. Meanwhile, LDA began paperwork for a new commercialisation policy. In mid-2009, commericla plot-owners whose commercialisation expiry dates arrived, applied for renewal. Though the commercialisation policy was in making, but applicants were kept in the dark on the new policy’s pros and cons. In the meantime, government increased property DC rates called schedule rates which increased the property rate manifold. With this, formula regarding commercialisation fee that linked to total value of property had to be readjusted leading to a 800 percent increase in the commercialisation fee. Unconcerned LDA announced a new policy in October, 2009 and sent inflated demand notices for the payment of commercialisation fee with a deadline in February, 2010. The case remains pending in court.