Bahria Town has opened registration for three projects in Karachi
- Bahria Town Icon
- Bahria Town Tower
- Bahria Town Karachi
The registration fees are range from Rs. 15,000 for Bahria Town Karachi to Rs.100,000 for Bahria Town Icon. In case of former Rs.5,000 is non-refundable processing fee and in case of latter, processing fee is Rs.15,000. Balance of payment can be used towards installment credit if you are successful in booking yourself an apartment. This is a registration fee and not booking fee as Bahria puts a disclaimer on its website
Disclaimer: This is not the sale of the project but entitles you to the right of booking at the time of project launch.
The registration process is right out of Emaar’s sales strategy or may be Emaar picked it up from Bahria Town as I recall a similar run for Bahria Town application forms somewhere in 2003-2005. The form used to have a five rupee note attached to it with serial number of rupee note matching the serial number of the form and the form alone used to sell at premium. I used to work in a bank in Pakistan at the time and I remember receiving requests from many corporate clients who were millionaires themselves if I can get them an application form.
You can read about Emaar’s abuse of such tactics in Dubai and its role in Dubai bubble here.
Compared to rest of country, Karachi has a few peculiarities:
There is real shortage of affordable housing in Karachi. Most people find themselves in a position that they cannot afford a decent house or flat in cash or even on mortgage. There are no reputable builders working in Karachi that have a track record as Bahria Town for delivering projects in Lahore and Islamabad. So when Bahria Town announces a project which people deem would provide them with affordable housing or even a quick buck by flipping it to people who are genuinely searching for affordable housing, everyone jumps on the bandwagon.
Malik Riaz, owner of Bahria Town, is a crook when buying or occupying land but when it comes to selling houses or projects to its clients, I have only heard good things about Bahria Town from its residents. But that has just been the experience of people I know. Other people might have had a different experience.
However his crookedness knows no bounds:
ISLAMABAD – Though the Capital Development Authority (CDA) has submitted a report to the Suddle Commission which states that around 1,400 kanals of civic agency’s land located in Zone-IV has been encroached by Bahria Town…..
“In the report we have mentioned two ways how CDA would resolve the encroachment issue with the Bahria Town. Bahria Town will be given two options, either to vacate the land or pay the price of encroached land,” said an official who prepared report.
“Bahria Town will be charged Rs 12 million per Kanal. It is the same price that the Authority has earlier charged against one kanal of land in the Park Enclave,” official said. This shows that according to CDA’s estimates Bahria Town has encroached land worth Rs 16.8 billion.
Official sources said that Bahria Town had already started selling commercial plots carved out on encroached land.
Then there was a time when Malik Riaz duped even the rulers of Abu Dhabi and Pakistani nation into believing that he will be building world’s tallest tower in Karachi.
ABU DHABI: Former chairman and present consultant of Bahria Town, Malik Riaz Hussain has signed an agreement with His Highness Sheikh Nahyan bin Mubarak al Nahyan, Chairman Abu Dhabi Group, Union National Bank and United Bank Limited under which $45 billion will be invested in Pakistan.
The investment will be made in various construction projects, and is the biggest-ever foreign investment in Pakistan. Out of the total investment value, $10 billion will be invested in Islamabad and Lahore whereas $35 billion will be invested in Sindh.
The story was given critical examination only by Amir Mateen in The Spokesman as Malik Riaz had bought all the other newspapers with full page announcements and advertisements
Is this funny, sad or simply stupid. The clarification by Abu Dhabi Group about their alleged $45 billion investment in Pakistan may have exposed lots of things — and lots of people. One Malik Riaz of Bahria Town for sure.
He virtually conned the Abu Dhabi Group, Pakistani media and the public. We already knew about his hold on the Pakistani media….The Bahria advertisements worth billions of rupees have simply blinded media owners who ensure that nothing is published against Bahria Town.
The announcement of a whopping $45 billion investment in Pakistan was a dream-come-true story. This too at a time when nobody wants to invest a penny in Pakistan, and half of my foreign friends want to send their mothers-in-law for ‘sight-seeing’ in FATA.
It was simply mind-blowing. The UAE sacrificed its pride for having the world’s tallest building, Burj Khalifa. And because Malik charmed them so well, they let Karachi have the honour. Apart from building the world’s tallest building in Karachi, the other attractions included a financial hub, sports city, international city, media city, educational and medical City, miniatures of the world’s seven wonders. It was amply flashed that “these projects would employ more than 2.5 million people and boost more than 55 industries like cement, bricks, iron, steel and glass.”
The so-called most credible English newspaper went a step ahead by giving a joint dateline of Karachi and Islamabad instead of Dubai. It added colour to the story by quoting a Karachi magnate, of course on the condition of anonymity, that the construction site would be “Kutta Island,” which is 3 to 4-km off the coast of Karachi. It went a step further than what Malik Riaz had claimed, informing readers that “the Abu Dhabi Group-Malik Riaz would, apart from the above mentioned projects, also launch into building of 125,000 houses on the island.” (sic)
Not a single journalist bothered to even check if there was any news of this sort on any website of the UAE companies or whether Sheikh Nahayan had actually said those words. The half-page advertisement on newspapers’ front pages, showing Malik shaking hands with the Sheikh seem to have blinded everything. Or perhaps they were told not to test their editorial discretion.
My Dubai friend, knowing Bahria’s leverage on Pakistani media, could understand that the news got carried on the first day. “But how about the five days after that,” he asked, confused. “Why nobody followed-up on the story that was supposed to be the biggest investment in the country’s history.”It turns out that the Abu Dhabi Group and the UAE government was aghast at the development. But since they have lots of investment here they did not want to embarrass Pakistanis.
Obviously, the Dubai rulers knew they were duped into that photo-up and their reputation was being used for petty benefits. It is easy to understand the benefits. This kind of news changed the scenario for Malik Riaz. He was being hounded by the courts in numerous cases, some of them seriously heinous. He was in conflict with LDA over opening new housing schemes in Lahore without permission. He was also in conflict with the army for land dispute with DHA that affects thousands of former army officers and jawans. All of this may have shaken the public confidence in his housing projects. In monetary terms this could mean a loss of billions of rupees for him. Such news about building the tallest building in Karachi is worth a lot though.
But you don’t get to where Malik Riaz is without having nerves of steel. The Abu Dhabi group story is dated 16 Feb 2013. IWhen the story finally broke down that there was no Abu Dhabi Group behind the fantastical project after a week, Malik Riaz went and got himself another savior. The following story is dated March 12, 2013.
ISLAMABAD: American real-estate tycoon Thomas Kramer and Bahria Town CEO Ahmed Ali Riaz Malik signed a $20 billion agreement for Pakistan’s first-ever Island City, Bundal & Buddo Islands, Karachi.
A joint consortium of international investors will join hands to develop this project and the deal with Kramer is the first level of this agreement. Announcement of other global investors from the Middle East and around the globe will be made soon.
Covering 12,000 acres of land, this project will be developed in a span of 5-10 years but the residential communities will start being handed over to people in 2016. The global attractions of the project comprise world’s tallest building, world’s largest shopping mall, sports city, educational & medical city, international city and a media city – all having the most modern facilities and amenities and the most advanced infrastructure.
So the project moves from Kutta Island to Buddu and Bundal Island yet still no newspaper questions its credibility. However, Malik Riaz had wisened this time. He even involved Thomas Kramer in this scam as evident from Thomas Kramer’s own website. It is reproduced in full below just to give you a flavor of what happens when one con artist meets another con artist (they may have been successful developers earlier but recently both Riaz and Kramer are acting more like con artists).
A bold step was made for the future of Pakistan: Its biggest real estate tycoon Malik Riaz was able to convince the US-German real estate visionary Thomas Kramer to jointly develop the first Island City off the coast of Karachi, named Bundle & Buddo Islands.
A spokesman of Bahria Town expressed what an honor it was to join hands with a entrepreneur of Thomas Kramer’s caliber: After all, the “quick change artist,” as Thomas Kramer is described in a recent New York Times article, has a reputation for knowing how to get impossible things done.
In the early 90’s Thomas Kramer took a helicopter ride over South Beach and had a vision: to create an international hot spot on the Southern tip of Miami Beach. What happened there, in less than a decade is absolutely mind boggling. The area was then a slum and full of dilapidated buildings. Thomas Kramer invited 11 world-renowned architectural firms to his world famous Charette. With his vision and foresight, he pioneered luxury living in Florida by transforming the once-blighted neighborhood of Miami Beach “South of 5th” into a sophisticated world-class destination.
Thomas Kramer’s South Beach Vision and South Beach today
Almost five years ago, Thomas Kramer met Malik Riaz in Islamabad where he invited him to visit his developments in South Beach.A year and a half later, Thomas Kramer was able to welcome Malik Riaz to 5 Star Island, his luxurious mansion. Malik Riaz was highly impressed by the degree of efficiency, innovation and quality that he saw in Thomas Kramer’s projects. Actually seeing the realization of a world-class development is better than any PDF presentation.
Mailk Riaz and TK visiting Apogee Towers in Miami Beach in front of Portofino Tower
Convinced that he found the right man for the job, Malik Riaz invited Thomas Kramer back to Pakistan where he offered him the use of a helicopter to spot potential development sites along the coastline. After days of inspection flights, Thomas Kramer was most impressed by the beauty of a chain of unoccupied islands, roughly 16,000 acres, located 2 miles outside of Karachi and just 12 miles away from Jinnah International Airport.
Most striking to him are the similarities between the Island of Karachi and Miami Beach in terms of climate and vegetation – obvious when comparing historic Miami Beach pictures, prior to its development in the early 20th century, with the Island of Karachi today.
View of the Island of Karachi today and Miami Beach in 1910
Finally, through unwavering persistence, Malik Riaz was able to secure a 100-year lease with an automatic additional 100-year lease renewal option on this land. Having signed the initial contract in March 2013 (The Express Tribune), both parties are now ready to bring their vision a high-end, self-sufficient waterfront hot spot to life.
Ali and Malik Riaz signing MoU with Thomas Kramer in March 2013
The deal is worth USD 20 billion and the project is expected to be completedwithin 10 to 15 years. The first committed financier was Abu Dhabi. At the deal signing, Thomas Kramer stated that this project − along with boosting the region’s economy and garnering the interest of international investors in the realty sector − will likely help eradicate terrorism in Pakistan. Furthermore, he believes that this is a unique opportunity that will put Pakistan back on the map of leading nations in the world.
Birds view of Miami’s South Beach and Bundle & Buddo Island
The project covers 16,000 acres of land. The global attractions of the project include the world’s most sophisticated marina, some of the world’s tallest buildings, the world’s most beautiful shopping arcades, a Sports city, an Educational and Medical city, an International city and a Media city. Each will have the latest in modern facilities and amenities as well as the most advanced infrastructure. Like in Miami Beach, Thomas Kramer was able to negotiate a connecting highway, 12 mile long and 8 lane wide, from the Island City to Jinnah International Airport.The entire city will be a “high security zone” with its own desalination plant that will convert sea-water into potable water. Power generation plants will enable it to be completely self-sufficient. Moreover, the project will have mosques, cinemas, spas, golf clubs, schools, hospitals and other global standard amenities to furnish a modern lifestyle. The first phases of the development will be available in 2016.
And again it was only Amir Mateen of The Spokesman who did some excellent work and ask pertinent questions:
Malik Riaz has pulled another rabbit out of his Bahria hat. As the Abu Dhabi Group backs out of the $45 billion deal that never existed in the first place — enter Thomas Kramer.
Again, the same dazzling picture of the world class retreat, encompassing the world’s tallest building 3.5 km off the Karachi coast was painted. Only the protagonist of the fairy tale was changed from the Abu Dhabi Group to US investor Thomas Kramer. Geo TV quoted Bahria Town spokesman claiming that Kramer had committed $15 to 20 billion investment in developing “Bodha Island city,” which will have “Net City, Education City, Health City, Port City and other infrastructure projects.”
The spokesman claimed, “the worlds’ most modern shopping mall will also be built” and link Karachi to the Island through a six-lane bridge.
Interestingly, the same group had published news on Monday, quoting the same spokesman, who bragged about an investment of 15 to 20 billion ‘rupees.’ During the day, rupees turned into dollars.
Transparency International says Bahria could not be given the project as it was declared as “cheats and frauds” by three statuary and regulatory authorities -the Federal Tax Ombudsman (FTO), the Security and Exchange Commission of Pakistan (SECP) and the Lahore Development Authority.Transparency quotes the State bank of Pakistan and the SECP which issued advertisements on February 23 warning that “the public should beware and not be misled by the fraudulent activities of deposit, loan, and investments through such advertisement.”
Bahria Town, it says, took advance money from investors illegally, besides the tax evasion of Rs 119 billion as mentioned by the FTO. The report lies with the FBR and may be taken up by the next government to recover this huge amount from Malik Riaz. May be!
Transparency mentions numerous cases where Malik Riaz was found involved in, to name a few, “corruption, black-mailing, extortion, land-grabbing, forgery, fabrication of evidence.”
So where does this leave the glamourous project? Frankly, it suits everybody. Malik Riaz got the island through dubious means and will not mind to give a huge stake to the American investors. Money will come from the public who are already being shown the dreamy image of the recreated Miami. The media story flashed on Monday shed light on the dazzling projects that Kramer had accomplished in Florida and how he turned around the pirates’ den across Cuba into one of the priciest real estate in the US. And why should Kramer not be interested. He gets a good deal — the island, the naive public dying to book an apartment in the dream world, the official approvals — for just showing up.
Who was investing $20 Billion? Was it $20 Billion or Rs.20 Billion? As a follow up to above story, I am at a loss to quote first the Kramer story or Buddu Island story. Let me start with Kramer story:
That morning marked a new low in one of the most incredible rise-and-fall stories in Miami Beach’s storied history of booms and busts. In the 1990s, Kramer was SoBe royalty, the man who’d spearheaded the South of Fifth revival and ruled from a waterfront mansion where wild shindigs sometimes turned into outright orgies. More than anyone, he symbolized an era of glamour, decadence, and carefree excess.
Now it was all over thanks to a Swiss court ruling in January that Kramer had to repay nearly $200 million to a German currency-printing dynasty. His appeals were up. Everything had to go — the house, the staff, the jewelry, the extensive cellar of vintage wine, even the taxidermied giraffe that greeted visitors in the hallway. Because of my job in Kramer’s mansion, I had a unique front-row seat for his last days in Miami Beach. I saw one man’s desperate efforts to salvage his name and his livelihood, afraid but hopeful that some last-minute opportunity would save him from financial ruin.
In fact, by the time he dismissed his staff, Kramer had already found the man he believed could be his long-shot savior: a scandal-tarred Pakistani plutocrat named Malik Riaz who wanted a partner to build a $20 billion island city in Karachi. Riaz, Kramer said that morning between sobs, was his last best hope.
“This is a once-in-a-lifetime chance to bring Pakistan back on the map of the leading nations in the world,” Kramer later said of the project.
If he succeeds in Karachi, Kramer could pull off the ultimate coup in a career full of remarkable comebacks. If he fails, though, it’s anyone’s guess how low he could fall.
Excuse my french, but you would be right in asking what Chutyapa is going on here. Now for the Island story
KARACHI, June 13: The Sindh High Court on Thursday restrained the Port Qasim Authority and other respondents from carrying out construction or any other activity on islands located at the western end of the Sindh coastal zone near Karachi.
The petition was filed by Shahid Hussain Soomro, a worker of the Pakistan Muslim League (Functional), who impleaded the chief secretary, port and shipping secretary, PQA chairman, senior member of board of revenue and the chief executive officer of the Bahria Town, Islamabad, as respondents.
The counsel stated that the PQA was an authority of the federal government that had nothing to do with the allotment of valuable lands and islands belonging to the provincial government. He said it was a matter of record that the then chief minister had in 1974 approved the summary for allotment of 13,000 acres for the PQA. However, he said, it was clearly mentioned that the PQA would not use the allotted land for commercial purposes.
The counsel argued that the deal between the PQA and the Bahria Town was contrary to fundamental rights guaranteed under Article 19-A read with Article 4 of the Constitution.
The petitioner prayed to the court to declare that the allotment of the islands to Bahria Town was illegal, unlawful and ultra vires of the law and without jurisdiction. He also prayed to the court to restrain the respondents from carrying out any construction and agreement on the impugned property.
It wouldn’t be Malik Riaz if he stayed out of news for long.
SC directs FIA to probe Rs40 bn EOBI scam
ISLAMABAD: The Supreme Court on Monday ordered to bring the looters of the public money to book, directing the Director General of the Federal Investigation Agency (FIA) to probe the alleged Rs40 billion corruption in the Employees Old-Age Benefits Institution (EOBI) and submit a report to it within 10 days.
At the outset of the hearing, former director Town Planning, Defence Housing Authority DHA, Col (retd) Tariq Kamal alleged that some 400 kanal land near Rawalpindi was handed over to Bahria Town without any financial consideration and the land was later purchased by the EOBI for investment purposes.
So far we have established three things:
1. Karachi has a real shortage of housing
2. Malik Riaz as a developer has reputation of delivering to clients
3. Malik Riaz is a criminal (but then everyone is. Here is ‘PAF forcibly occupied CAA land & convert it into private housing society‘. PAF acquired that land in national interest to build a radar station but ended up selling it as a residential housing society.
So where does that leave the current projects in Karachi. I have a few issues with them.
1. Above is a logo Bahria Icon Tower. How an under construction tower be a SUCCESS? On what basis did the tower won the property award? Who gave it an award and based on what: architectural drawings?
2. Above is one of the term of registration of Bahria Town saying that size of the house, plot, its price and rest of the details would be finalized at the time of booking.
Registration fees that you are paying is for the privilege of being invited to the booking event. Why would any investor put up money for something for which he has no idea he is buying or whether he can even afford to or would like to buy.
3. Finally, there has been no infomration where is this Bahria Town located.
One must be crazy for putting money for a project for which we don’t know where it is located, what is the size of the project, what is the shape of project, what are we buying in the project. Even small projects need approval from municipal development authorities but in Karachi whose infrastructure is already creaking, a project of this size would need major approvals for bringing in water, gas etc to the development but no one seems to care.
A friend who works in foreign bank in Karachi says colleagues around him are going crazy filling in multiple application forms. Friends in other banks also told me similar stories. People are calling in from up country even overseas (one friend received four phone calls from his friends and family abroad in one day inquiring about how to invest in the project).
But no one is asking where is the project located?
Talked to a few people and they don’t care about the project much. They are in it to make a quick buck by flipping the property to the next sucker. Most of them also know that this might be a game of “pass the parcel” with the last one holding the parcel being the ultimate sucker. In the words of disgraced Citibank CEO
“When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you’ve got to get up and dance. We’re still dancing,” he said in an interview with the FT
And then music stopped and we all knew what happened to Citibank.
Oddly reminiscent of Tulip Mania or South Sea Bubble or DotCom bubble or Dubai bubble or myriad other bubbles through out human history.
Based on the inquiries I made, it is appearing that it is Arif Habib started venture Naya Nazimabad which will be the new Bahria Town.
1. Arif Habib couldn’t sell the project because of its location. However, by duping in people with Bahria name and probably with significant cash, Bahria Town may just be able to kick-start the project
2. For the project of this size to be located anywhere else in Karachi, lot of approvals will be required from KBCA and KDA and other agencies for provision of utilities. There has been no record of Bahria Town seeking any approvals from civic agencies or negotiating with utility and infrastructure companies in Karachi. This means two things: either the project is outside Karachi or all those approval have already been obtained. For the latter case, only Naya Nazimabad qualifies as they have all such approvals.
3. Sources within Arif Habib tell me that Arif Habib has already sold its significant stake in Naya Nazimabad.
- Dubai Property Bubble: This time its a different con (2paisa.wordpress.com)
- Dubai Inc: Why did the dream go sour (2paisa.wordpress.com)
- The Great Hargeisa Goat Bubble (www.juliangough.com)