Govt halts housing scheme for homeless following rise in steel, cement prices

Despite claims of the government that there are "no price hikes" and "media exaggerates," contractors stopped working on all government-funded housing projects months ago because of cost overruns, the Public Accounts Committee (PAC) was told on Thursday, as cited by Dawn News.

Housing Secretary Dr Imran Zeb told the committee that the development of housing programmes started by the PTI administration had been halted due to an "extraordinary" rise in steel and cement prices in August last year.

The PAC was reviewing the 2019–20 housing and works ministry audit report.

Secretary Zeb said that while work on government housing projects was proceeding as planned, the price of steel had risen from Rs140,000 per tonne to Rs210,000 in August 2021.

Since August 2021, work has been halted because of rising material costs, and the contractors wanted a cost reduction.

The housing ministry turned down their request because the new prices were too high for the PAC and PPRRA benchmarks and the rules that apply.

The Pakistan Engineering Council and the Association of Government Contractors wrote to the PM, citing their inability to work at current pricing. Dawn reported that the federal cabinet looked into the issue and sent it to the Planning Commission.

It is currently looking into how the government can pay the contractors for cost escalation.

The contractors would not begin work unless a Statutory Regulatory Order was obtained allowing the ministry to pay the cost difference.

Rana Tanveer Hussain, the chairman of the PAC, was not happy with the progress of the housing projects. He said that contracts should have been cancelled and those who slowed down construction should have been blacklisted.

Dr Zeb said he had terminated the contractors' contracts.

Hussain believes the contracts should have gone to people who could do at least 25% of the work themselves, as contractors rarely pay for government-funded. projects.

The laws required the Auditor General of Pakistan (AGP), Muhammad Ajmal Gondal, to pay the difference due to cost escalation. "The delay is inexplicable," he added, stating that any further delays would increase project costs.

The housing secretary said contractors offered to pay the vendor directly for steel and cement, and currently, the FGEHA is working in Islamabad, Rawalpindi, and Lahore.

The housing authority's Kashmir Avenue Apartments project of April 2019 in Islamabad's G-13 region had not been completed, Prime Minister Imran Khan said last month. 

According to publication, PM had arrived unannounced and found no one there. 

It stated that a payment of Rs719 million without clearance was also snubbed by the PAC after the PWD director general made careless remarks about auditors.

Acting PWD DG Zahoor Ahmed blamed the audit staff, calling them "audit walay", for not cooperating, being unavailable, and having a bad attitude.

AGP Gondal objected to these remarks, saying they amounted to blaming others for the auditors' actions.

When committee member Riaz Fatiyana sought to defend Mr Ahmed, PAC chairman Hussain urged him not to defend an officer's casual behaviour on this platform.