So the premium on Bahria Town registration slip of Rs.15,000 has reached Rs.195,000 in less than two months if all the SMSs and emails are to be believed. That is a 1,300% return in less than two months. For a “piece of slip” which has nothing behind it (the slip entitles you to nothing) yet people are falling over one another to buy it, it boggles the mind.
Yes Yes I know it is Bahria Town and Malik Riaz has developed good projects in Lahore and Islamabad but still it does not make sense. Let me give you an example. Lets say your closest friend your brother who you trust asks you to buy a piece of slip for Rs.100,000. Discussion will move like this:
You: “what does the piece of slip entitles me to?”
You brother: “Nothing. It is just an invitation to apply for booking.”
You: “Ok. Is the booking guaranteed?”.
Your brother “No.”
You: “Rs.100,000 for a piece of paper? Isn’t that exhorbitant. Acha chalo..where is the land that I will book if I am lucky? Is it inside Karachi like Naya Nazimabad, is it in suburbs somewhere near Gulshan-e-Maymar or is it mid-way to Hyderabad near DHA City”.
Your brother: “I have no idea”.
You: “What is the size of the plot or its final price?”
Your brother: “I have no clue”
You: “When do you expect the booking to happen?”
Your brother: “I am not sure”
You: “So you are asking me to pay Rs.100,000 for a piece of paper which does not guaranteeme a plot which you have no idea where it is located or what size it is or what is its price?”
Your brother: “Yes”
Your brother: “Because it is Bahria Town”
You know how stupid the brother sounds. It is exactly what is happening. Reminds me of Tulip Mania as recounted by Charles Mackay
According to Mackay, the growing popularity of tulips in the early 17th century caught the attention of the entire nation; “the population, even to its lowest dregs, embarked in the tulip trade”. By 1635, a sale of 40 bulbs for 100,000 florins (also known as Dutch guilders) was recorded. By way of comparison, a ton of butter cost around 100 florins, a skilled laborer might earn 150 florins a year, and “eight fat swine” cost 240 florins. (According to the International Institute of Social History, one florin had the purchasing power of €10.28 in 2002.)
By 1636 tulips were traded on the exchanges of numerous Dutch towns and cities. This encouraged trading in tulips by all members of society; Mackay recounted people selling or trading their other possessions in order to speculate in the tulip market, such as an offer of 12 acres (49,000 m2) of land for one of two existing Semper Augustus bulbs, or a single bulb of the Viceroy that was purchased for a basket of goods (shown at right) worth 2,500 florins.
You might come back with the argument that there is really something behind it. People are willing to pay Rs.195,000 for the “piece of slip.” And this brings us to Greater fool theory:
The greater fool theory describes a situation where the price of an object is not being driven by intrinsic values, but by expectations that irrational bidders for limited assets or commodities, will set the price. A price can be justified by a rational buyer under the belief that another party is willing to pay an even higher price. Or one may rationally have the expectation that the item can be resold to a “greater fool” later.
In real estate the greater fool theory can drive investment under the expectation that prices will rise, or force need-based-buyers to out bid irrational or ill-informed buyers. A need-basis can be for basic housing or for organizations fulfilling exigent commercial interests.
The question that it raises is that Malik Riaz is no philanthropist. If there is so much demand for real estate in Karachi, why not increase the price of the plot and pocket the profit. But he is smart. He is allowing ordinary people to become stake holders in his mischievous schemes so that when he does something illegal or wrong, ordinary people who have made profit this “piece of slip” business will defend him in court of public opinion “uss nay aam aadmi ko munafa kamanay ka moqa dia” not realizing that this profit is a fluke, a gamble in its truest form. It is not even halal (because in Islam when you trade, the item being traded needs to be clearly identified) but lets not bring religion here.
I just got an email from a friend explaining Bahria Town tactics. So I will copy and paste it below:
It is very difficult to say anything about Bahria Town Karachi upcoming projects
1. Bahria Town Icon – Pakistan’s Tallest Building Plan (62 Storey Building)
2. Bahria Town Tower – 24 Storey Building at final stage of completion
3. Bahria Town Karachi – Master Planned Community (Villas and Plots)
We do not have any information regarding rate, payment plan and possession date. For Bahria Town Karachi, (as per Bahria Town track record) there is no idea of location of this project. It is obvious that it would be planned out of city area. As Karachi is a very big city and commuting to city area is not safe so it may not attract the investors in the start.
I understand Bahria Town itself is not clear so it is asking for registration first. It is kind of feeler to understand the demand as well as to collect huge funds.
About 8 years ago Bahria Town Pvt. Ltd. started same strategy when it sold 85,000 HOME PLUS cards and charged Rs.6,000/= or US$100 with a commitment that the card holders will be receiving the application forms of upcoming projects at their door steps. It was January 2005 when Home Plus cards project was launched. Do you have any idea when was upcoming project launched? After 16 months, on March 22, 2006, Bahria Town started sending application forms of its Awami Villas Project to Home Plus Card Holders.
If we consider the track record and strategy of Bahria Town, the actual launch of Karachi projects would be after a year or so. This registration scheme will also help BT to understand the trend of investors in Karachi and the demand for these projects. This demand would be the main factor in deciding the pricing of project and payment plan.
Karachi is a business hub of Pakistan. Bahria Town can not afford to ignore its market and investors. Contrary to that, Karachi also needs these kinds of safe, secure living and business atmosphere which Bahria has planned to provide. As mentioned above, Bahria Town would take around a year or so to present some actual project plan. It will, in the meantime, play with the funds received from registration. I hope that Bahria Town will flourish in Karachi but it should be considered a long term investment.
Earlier I had calculated that Malik Riaz will be making around Rs. 600 Million from the interest on the cash he has received. But if he takes two years to announce the actual project, the actual income would be in the range of Rs.1.5 Billion. I know it is not a big amount for Malik Riaz but it is free income.
So all those waiting for some clarity on the project. Sit tight and wait. They are saying that premium on the “piece of slip” will increase to Rs.2.5Million.
If you are looking for some quick high risk-high return money making opportunity, I suggest you buy a slip and flip it quickly to the next sucker. Don’t hold on to it for ever.
If you have multiple slips, sell one and get your principal and profit out. Then you can continue to hold on to other slips for any further gain or the property
If you are looking to buy some real estate, my suggestion is to wait till the project is announced and people get allotment letters. A lot of people will want to sell the property and exit when the project is announced. You might have to pay a premium for a file but at least you will know what are you buying
I have already written a very detailed post about Malik Riaz and his shenanigans at Bahria Town. I have also tweeted about it a lot. However, I keep getting inquiries from friends and colleagues asking me if it is a good investment.
How do you analyze if anything is a good investment? When you ask what will you get in return for what you are paying for. So for Bahria Town, we will be paying Rs.15,000 (5,000 registration fees plus 10,000 credit towards first installment). What will you be getting in return? No one knows. The location of the project, size of the project, sizes of plots, price of the plot, number of installments etc is all guess work. Rather guess work is limited to location of the project. With respect to the rest of the information, no one has a fking clue.
So it is pretty hard to tell if it will be a good investment.
But what do we know about it. We know that we will be paying Rs. 15,000 per application. People are submitting 2 to 3 applications each and investing from all over the world. So I estimate that there will be 100,000 applications which I think is pretty conservative considering the hype surrounding it.
I did some back of the envelope calculation.
At 15,000 per application, that is Rs.1.5 Billion for 100,000 applications.
Lets assume that processing and booking and balloting and allotment etc takes a while. Can take up to 6 months but conservatively assume it will take 3 months
Assuming he has negotiated a rate of 8% interest, Rs. 1.5 Billion in the bank will earn him Rs.30M in 3 months
Add to it, Rs.5000 per application that he will not be returning and that is another Rs.500M
So that makes a total of Rs.530M
Deducting around 50-75M that he spent on advertisement, and that leaves him with Rs.455M
Not a lot of money for him but still a handsome amount as it comes with no strings attached.
If we add money he will be getting from other two projects and probably he might be able to get upto Rs.600M of money absolutely free.
I don’t know about the investors but for Malik Riaz and Bahria Town entity, this is pretty good investment. Against an advertisement campaign of Rs. 75M (ok lets make it Rs.100M by including future expenses), he will be getting Rs.600M. That is a 600% return in 6 months.
Only illegal Ponzi or gambling schemes guarantee such returns. And yet Malik Riaz gets it all legally.
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.
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 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.
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.
Many a times I have come across Pakistani blogs which berate columnists of Urdu newspapers for being fundamentalists or right wing or plain stupid. It is uncalled for as the columnists are reflecting the tendencies of their readers. The bloggers belong to the English speaking elite and tend to have left-of-center leanings and because they do not agree with the viewpoint of the columnists or the masses it does not give them the right to castigate them.
However, once in a while one does come across a stupid Urdu column. (This does not mean that there are no stupid English columns). One of them I reproduce below which is by notable Urdu columnist and TV anchor Javed Chaudry. This was shared on Facebook by Mohammad Hanif of “Case of Exploding Mangoes” fame. I wish I could translate the article for English reader but that seems like too much work.
The real gem in the article loosely translated says
Malik Riaz, with a slaughtered chicken in his hand, is lying in the pond full of alligators; and for past 30 years has been saving his own life and protecting the chicken as well
The three most important take aways from this article are
1. Malik Riaz is Pakistan’s Bill Gates
2. Aslam Beg wants to drop an atom bomb at least on India
3. Pakistani soldiers can get away with anything e.g., Aslam Beg hid his medical condition while in service which is against the rules and lives to tell about it without fear of any consequences.
Finally, as one of the commentator said, there is nothing surprising about Malik Riaz’s methodology_ as a civilian, he did what the uniform-wearers in this country have been doing for decades i.e., encroach upon land belonging to poor and building on it city for the rich.