The Role of the Informal Sector in Provision of Urban Housing and Facilities

The dallal usually forms an organisation of his clients and gets is registered as a social welfare organisation. From this platrofm he lobbies for services for his settlement and often invites politicians to the area and names the settlements after them. To assist this process he often seeks the assistance of officials in the line agencies, of journalists and sometimes of lawyers. He has been known to pay them both in cash and through plots.

The ISD settlements, unlike the unorganised invasion settlements are planned as per government regulations. Government planners are known to have assisted the dallals in laying out the earlier settlements. However, the dallals are now experts and have also produce shagirds (pupils). Thus, the system has been institutionalised.

The initial price of land in ISDs is extremely cheap. However, as the settlement develops and starts to acquire services, the price increases. The cost of land and property in old katchi abadis is more or less the same as that in planned low income settlements. Speculation, except for plots owned by officials and the dallal himself, is strictly controlled. If a plot owner does not start living on his plot within a week’s time, his plot is given to someone else the money he has paid for it is forfeited.

By and large, the process described above holds good for most Pakistani cities where government land is available. The most sophisticated process is to be found in Karachi where it has now been fully institutionalised. To cater to the city’s population growth alone (not including replacement of stock or backlog) Karachi requires about 60,000 housing units. Over the last 10 years the formal sector has provided only 21,400 units per year. Thus, the informal sector has developed a minimum of 36,000 housing units per year during this period.

3.3  The Process of Land Delivery through Informal-Subdivisions-of- Agricultural-Lands (ISAL)

In many urban areas of Pakistan there have traditionally been little or no government lands. In other areas government lands have been depleted or are at inappropriate locations for housing. This situation exists in almost all the urban areas of the Punjab and the NWFP. As a result, the ISD pattern cannot be followed.

The pattern that has revolved in the Punjab and NWFP cities is that agricultural land on the city fringes is informally subdivided and sold. The subdivision and sale is again arranged and carried out by a dallal. He usually enters into a “joint venture” with the land owner and they share the profits. The dallal, apart from arranging for the preparation and implementation of the plan of the settlement, locates the buyers and arranges the necessary legal formalities for land transfer. However, agricultural land in the Punjab and NWFP is becoming increasingly expensive and is already unaffordable for low income groups. Thus, plots are becoming smaller (sometimes as small as 16 square meters), access roads narrowers and open spaces non-existent. A major environmental crisis is in the offing and even then low income groups are finding it difficult to afford small plots in such settlements.

To tackle the affordability issue a new process has evolved over the last decade and a half. Dallals come to an agreement with people who own lands which are old quarries, or are waste lands or are low lying areas that are prone to flooding. These lands are cheap and affordable for the poor but are ecologically unsuitable for habitation. The lands are subdivided and sold. The dallal arranges the filling of these lands at the cost of the purchaser so that they may be raised above the flood level of the depressions in quarries may be reclaimed. This filling is done by municipal garbage which is very cheap and is dumped here informally by municipal trucks. The truck operators are paid a bribe for this service.

Unlike the katchi abadis the ISAL settlements have security of tenure and they are the manner in which housing, in the Punjab, NWFP and an increasing number of cases in Sindh, will be provided in the foreseeable future. Katchi abadis are becoming a thing of the past or will be limited to those cities which still have large tracks of government land.

The scale of ISAL activity can be judged from the fact that Lahore has a backlog of 150,000 housing units and an additional annual demand for 27,000. However, Lahore Development Authority (LDA) has not been able to supply more than 2,000 plots and/or built units over the las decade (6). Statistics for Multan, Peshawar and Quetta are far worse. As far as small towns are concerned the only substantial housing programme has been that of the Punjab government which has developed 117 thousand small plots in 79 towns since 1972. This works out to an average of 6,500 plots per year against an annual demand of 78 thousand (7). This demand-supply gap has been met by the creation of ISAL settlements.

3.4  The Process of Housing Building

The process of house building is similar all over Pakistan but has local variations. In the case of Karachi, whenever an ISD settlement is being laid out, a private entrepreneur establishes a building manufacturing yard in the settlement. The yard is known as thalla and its owner as a thallawala. The thallawala provides building materials such as concrete blocks, tin sheet for roofing and other building components. He also provides skilled labour for construction and gives technical advice on the design and construction of the house. In addition, if necessary he provides these inputs on credit which is recovered with interest over a short 6 months to a one year period of time. The credit support that the thallawala gives to house builders is facilitated by suppliers who give the thallawala raw and manufactured building material on credit. Thus, a thallawala is the architect, builder and the HBFC for low income communities. If there are difficulties in recovering this credit then social pressure is applied on the house owner. Almost all thallas are mobile. Once work in a settlement is complete or slackens, the thallawala moves his thalla to a more appropriate location.

As a result of the activities of the thallawala, a major improvement has taken place in the quality of housing in Karachi. This is illustrated in the table below.

Table (8)

Number of housing units
Type of houses 1970s 1980s 1986
Permament or pucca 223,888 360,370 452,760+
Semi-permanent or semi-pucca 179,730 360,370 534,688+
Not permanent or katcha 86,382 137,285 90,552+
Total 490,000 853,033 1,078,000

There are no detailed studies of house building processes for other cities of Pakistan. However, observations show that they are not dissimilar from the Karachi process.However, in spite of the improvements in the housing stock, the quality of construction remains poor. The reason for this are: one, that the quality of building design and construction materials manufactured by the thallawala are poor. This is because he lacks technical knowledge and know-how. In addition, the house builder cannot discern between good and bad quality which the thallawala exploits this knowledge gap to make larger profits. Two, the skilled labour available in the katchi abadis and informal settlements also has poor skills. This skilled labour consists mostly of those workmen who cannot get work on formal sector projects because of their relatively poor skills. And three, the owner does not know what his house will cost him when he begins construction; nor does he know about technical details; or about what exactly his relationship with the workmen or small contractor should be. As a result, relations between him and the workmen deteriorate to the determent of the quality of construction. Usually a family employs a mason as skilled labour for constructing the house and does the unskilled jobs themselves.

3.5 Infrastructure Provision

  1. Water Supply, Sewage and Solid Waste Management:
    In the initial stages, katchi abadis and informal settlements acquire water from hand pumps where the subsoil water is not brackish. They collectively finance such efforts. In other locations, such as Karachi, water is acquired through tankers. Neighbourhood committees are formed to collect money, make a community underground tank and distribute the water from it. Sometimes the tank of the local thalla-wala is used for storage purposes. This helps the thallawala in expanding his business. Often the tankers are arranged at a subsidy by the dallal through his links in the relevant government departments. The dallaland the officials, who assist him informally, charge a fee for this service.When a settlement is well established it lobbies for a piped water supply system from the relevant departments. For this the community organisations in the settlement invites important politicians for special occasions such as Eid millanparties; negotiates with candidates during an election process; or bribe councillors into getting them to spend their development funds in its area.Where a water line is available near the settlement, people plug into it illegally. However, to do this they have to informally pay the municipal or WASA staff a lump sum to begin with and a regular charge afterwards. Usually this payment is well in excess of official charges for similar facilities.Similarly, where there is a sewage disposal available such as an open nalaor a municipal trunk line, people connect to it. For this they get together, collect money and manage the sewage construction. In other places, they construct open drains or again bribe or munipulate their councilors into doing this for them.The scale of community managed development is enormous and can be judged from the fact that 23,943 houses in 38 Karachi settlements have invested over Rs 28.75 million in water and sewage lines (9). However, most of this community work, along with the work done through the councilor’s programme, is substandard and quickly falls into disuse or the community has to constantly spend money to keep it in operation. This is because the community does not possess technical skills, cannot map conditions and make estimates. In addition, the councilor’s programmes are carried out without proper design and are not supervised. Their cost of development is 10 to 12 times the cost of labour and materials involved in them. Their bad quality clearly points to the unequal political relationship that exists between poor communities and the local administration.The formal urban solid waste management system in Pakistan manages to lift no more than 30 percent of the waste generated. The reason that the cities do not suffocate on their inorganic waste, which is the major problem of waste disposal, is that an informal sector purchases this waste and recycles it. Thus, rags are turned into fluff or woven by rag-weaving machines; plastic, paper and glass is recycled; bones are ground and mixed with animal feed; and even polythene bas are now being converted into shoe soles. Much of this recycling activity is pollution producing and is currently being actively persecuted by the state for this reason. No attempt is made to assist it or to integrate it in municipal urban solid waste management systems.There is only one comprehensive study on how the informal solid waste collection and recycling sector works and again it is for Karachi (10). The study gives sociological details of rag pickers and their mode of operation; junk dealers and the physical and economic scale of their activities; the recycling process; and the marketing of the recycled product.
  2. Electricity:
    Electricity is acquired by collecting a large number of forms (a minimum of 50) and handing them to the dallal or the local councilor so that he may lobby with the Karachi Electric Supply Corporation (KESC) or the WAPDA for a connection. To get a demand note the individual households have to pay a bribe of anything between 2 to 10 thousand rupees. Even after a connection has been provided, it is very often disconnected and the family is forced to take an illegal connection for which it pays a regular fee to the local tout of the concerned agency. This sum is almost always higher than what is charged for a legal connection. This again points to the inequitable relationship between poor communities and the staff of government agencies (11).
  3. Employment and Social Sector Services:
    There are no scientific studies of informal sector employment and education and health facilities in katchi abadis and informal settlements except for those done by the Orangi Pilot Project (OPP) for Orangi Township, Karachi and those carried out for the UNICEF supported Community Development in Katchi AbadiProject in Lahore. These studies show that over 70 percent of the population of the project areas work in the informal sector, many of them in the settlements themselves. This sector is operated by small entrepreneurs and has almost no access to credit and technical support. This hampers its growth. Where such support has been provided, profits have increased and new jobs have been generated (12). The scale of informal sector activities can be judged from the fact that in Orangi which has a population of about one million, there are over 30,000 small family enterprises and businesses employing about 120,000 people (13).Studies also show that in the newer settlements there are almost no health and education facilities. However, in 10 to 20 year old settlements the private sector and community initiatives usually establish a large number of facilities which, in the absence of government facilities, serve the vast majority of the residents of katchi abadis and informal settlements. Again in Orangi, there are 641 private clinics (many run by quacks) and hospitals as opposed to 9 government facilities. In addition, there are 509 private schools as opposed to 76 government schools (14). These facilities are run on shoe sting budgets so as to make them affordable for the residents. No attempt at using these informal health facilities for government programmes has been made and nor has any serious attempt been made to support and improve the private sector/community educational institutions.

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