In order to provide more affordable housing to people, the role of the Public-Private Partnership (PPP) is crucial, said experts as a PPP model brings in public sector confidence and private sector efficiency that enables development in the most sustainable way.
International Finance Corporation (IFC) has been undertaking a number of recent studies and assessments which shows that the existing demand for affordable urban housing is about six million units and also estimates that it’ll increase to ten million units by 2030.
Increasing land prices within the metropolitan and the long and tedious job of transferring land ownership documents make it very difficult for the private sector to get access to the land, says Thomas Lubeck, regional manager, PPP Transaction Advisory Services, South Asia and East Asia Pacific, International Finance Corporation (IFC).
Lubeck presented the welcome note at the roundtable discussion, where Vivek Sharma principal and fund manager of Tamil Nadu Shelter Fund, India and Sumeet Shukla, an investment officer of PPP Transaction Advisory Services at IFC also spoke.
He also added that the high cost of raw materials and increasing oil prices are affecting the housing prices as well, so to provide decent housing, infrastructure must be made up to mark to make the new places more attractive for people to move.
In the discussion, Yan F Zhang, senior urban economist, South Asia Region at the World Bank showed approaches that can be taken in order to make housing more accessible to lower-income groups showing examples of similar projects that took place in Morocco, Indonesia and India.
“A defined KPI must be provided by the regulatory authority to the private sector, as in many cases permissions get halted for a year or more for which businesses incur additional costs that reflect on the final sales price,” said Mashid Rahman, managing director of Rangs Properties Ltd.
He also suggested designated areas for middle-income groups and a cap for the land prices of those areas to which the chief guest at the discussion Dr Shamsul Alam, minister of State, Ministry of Planning replied saying: “I personally believe that in a market-led economy like ours, deciding on prices should depend more on the market forces instead.”
“We are encouraged to go with the PPP model, the government can provide its own land for PPP development to provide for the lower-income people, as emphasized by the national housing policy,” said Dr Shamsul Alam.
He added: “Low-income people will be subsidized by land allocation process through the profit gained from the selling off land at a proper price to high-income people for housing, industrial, commercial and other uses.”
In the concluding remarks, Martin Holtmann, country manager of Bangladesh, Bhutan and Nepal, IFC said that there is huge potential in the Bangladesh market as there is a huge demand in the particular area as IFC estimated a current financing gap of at least 60 billion dollars.
Ten million new units are needed by 2030 to meet the growing demand for housing.
PRI and IFC jointly organized the fifth housing roundtable of IFC’s Housing Roundtable Series on 'Supply of Affordable Housing'
Dr Ahsan H Mansur, executive director, Policy Research Institute (PRI) moderated the discussion.
