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

4.  Katchi Abadi Improvement and Regularization Programme

The Government of Pakistan has accepted the existence of katchi abadis and has initiated a Katchi Abadi Improvement and Regularization Programme (KAIRP). The KAIRP aims at regularizing 2,320 katchi abadis in Pakistan which have a population of over 5.5 million. In addition, it aims at improving the settlements by providing water, sanitation, electricity, road paving and social facilities. The beneficiaries are supposed to pay for this improvement through land and development charges known collectively as “lease charges”. The programme in its present form has been in operation since 1978.

However, the programme has been facing a number of problems which are listed below.

1. The pact of work under the KAIRP has been slow. Only 13.85 percent of the households have been regularized since 1978 and 22.41 percent of abadis have been or are in the process of being developed. The reasons for the slow pace of work are given as lack of funds; heavy government subsidy in development along with lack of recovery of development charges, which prevent funds from revolving; and lack of community involvement in the programme. To keep up with the increasing backlog of katchi abadis 100,000 households annually should benefit from the programme. However, only 30,000 houses annually are upgraded under the present programme (15). Since 1989, when these figures were compiled, performance on an all Pakistan level has not improved.
2. So far Rs 668.44 million (US$ 21.5 million) have been spent on the programme. On this, Rs 225.75 million (US$ 728 million) is expected to be recovered. This is because 50 percent of the development charge is borne by the government and 50 percent by the beneficiary. If the beneficiary pays the total charges in one go he is given a further 50 percent rebate.
3. In the punjab province, which has been the most successful katchi abadi development programme in Pakistan, 3.5 million people or about 500,000 households live in katchi abadis. With a yearly budget of Rs 250 million (US$ 8 million) only, about 50,000 households could benefit from the programme yearly. This would take the programme over 10 years to complete and that too if recoveries for land and development charges could be effected. So far, recoveries have been poor. For example, the LDA has spent Rs 200 million (US$ 6.45 million) on the programme and recovered only Rs 10 million. Recoveries of the provincial Katchi Abadi Directorate (KAD) have, however, been marginally more satisfactory.
4. Although funds are given as one of the reasons for the slow pace of work, only Rs 200 million of the Rs 400 million (US$ 13 million) allotted every year for the programme are actually utilised. This, points to a lack of capacity on the part of the programme implementing agencies to carry out the work (16). Again, conditions have not improved since 1989 when these figures were compiled.
5. Although the development programme manages to develop on-site infra-structure it fails to provide secondary infrastructure to link the abadis with the town’s or city’s trunk and communication network.
6. In addition, there is a lack of trust between the government agencies and the people which prevents them from acquiring a lease. This is further supported by the de-facto security of tenure that katchi abadi residents enjoy and by the fact that acquiring a lease is a long and complicated procedure which only very brave and enterprising residents would undertaken.

Because of the problems mentioned above the KAIRP will require at least a hundred years to regularise the existing settlements. Meanwhile, new settlements, as mentioned earlier, are being created at a growth rate of 10 percent per year.

5. The Future

5.1  State Cannot Deliver

All indications are that the state does not have the capacity and capability of bridging the demand-supply gap through conventional means. On the contrary, due to inflation, recession and the liberalization of the economy, formal sector housing options for the poor are diminishing. Attempts have been made through pilot projects to overcome the problems the formal sector faces in providing land for housing to low income communities. The most successful of these attempts has been the Khuda-ki-Basti Incremental Housing Scheme in Hyderabad. However, the scheme has not been replicated so far on a large scale although it was established almost 10 years ago. In addition, it is inconcieveable that its model can compete in any way with the scale of ISDs and ISALs.

Similarly, attempts have been made through the UNICEF supported Urban Basic Services Programme in Sukkur, and the World Bank supported Collaborative Katchi Abadi Improvement Programme in Hyderabad, to replicate the OPP model with the assistance of government agencies. both these attempts have failed to meet even one of their many objectives. Recently, the OPP model is also being replicated by the Sindh Katchi Abadi Authority (SKAA), it is too early to past judgement on this attempt. However, even if it succeeds and is replicated in a big way, it will not be able to bridge even a fraction of the demand-supply gap by itself.

Hundreds of millions of rupees have been spent on technical assistance and credit programmes aimed at increasing the capacity and capability of the formal sector in land, housing, infrastructure and credit delivery. Although it has greatly improved access to formal sector land and credit for the middle classes it has not helped the lower income groups who constitute the majority of Pakistan’s population. It is necessary therefore to search for alternative to present policies and programmes.

5.2  Support to the Informal Sector

The discussion above leads to only one conclusion that the informal sector is the only way through which low income communities can acquire housing and services for the foreseeable future. As such it should be accepted on its own terms. Instead of trying to copy it or formalizing it, it must be supported with technical assistance, access to credit and managerial advice. On the basis of this concept it is time to search for new directions. Innovative NGO projects tell us that it is possible to do this and can lead to the enhancement of the immense vitality and ingenuity of the informal sector and low income communities. However, to do this a new kind of administrator and professional is also required, someone who understands local development processes; has the ability to communicate with people; and the capability to innovate. Professional academic institutions such as the IBA need to give some thought t this suggestion. Development projects in the Third World (and more recently in the First World as well) tell us that there can be no effective macro level policies without a micro level understanding.