Unreal estate: The boom in Gwadar’s property market

Gwadar is changing. This is the usual tag line for advertisements promoting the port city as the next best destination for investment in real estate after Dubai. These adverts generally feature a skyline dominated by well-lit, high-rise buildings lining wide avenues and towering over a shimmering waterfront.

The Gwadar of reality has neither electricity nor drinking water of its own. Its electricity – available only eight hours a day – comes from Iran and its water is brought from reservoirs located far away.

Yet the city and its eponymous tehsil are changing.

Those travelling regularly on the Makran Coastal Highway have seen this change pick up pace recently. Around Nilhat, a village where Gwadar tehsil starts and Pasni tehsil to the east ends, boundary walls have cropped up on rural lands that only six months ago looked like green fields sown with fodder crops.

Many hilly mounds have disappeared; many streams that once carried rainwater during rains and brought seawater inland in the dry season have been filled up with earth and marked as private property. Signboards announcing real estate projects of different types can be seen everywhere along a stretch of road, close to 50 kilometres long, between Nilhat and Gwadar.

Most of these developments have taken place after a direct road link was opened for traffic between Gwadar and Quetta last year. Gwadar Port receiving its first consignments from China, also in 2016, has been another contributing factor.

But though levelling and marking of land is a recent phenomenon, extending private ownership to large tracts of previously unclaimed land is not. Abdul Ghaffar Hoth, who worked as deputy mayor of Gwadar district in 2001-2005, pointed out to the Herald six years ago, while travelling from Gwadar city to Dasht town to the north, that many influential people in the area had got barren hills and waterways transferred to their names, anticipating a real estate bonanza.

Javaid Hayatt concurs. A newspaper columnist and radio show host whose day job is to work at Gwadar Fish Harbour as a clerk, he is distraught over how the expectations of this boom are affecting a vast majority of Gwadaris. With the exception of those living within Gwadarcity, he says, everyone in the area seems to be willing to sell their land.

It is not clear if all these landowners have the government’s permission to turn their properties into real estate projects. According to official data, the Gwadar Development Authority (GDA), set up in 2006 by Balochistan’s provincial government to oversee the growth of the city, has so far issued 75 no-objection certificates (NOCs) for setting up private residential schemes.

It has also issued NOCs for 16 industrial projects, six commercial areas and 13 apartment buildings. All these real estate projects cover 15,650 acres of land — just a small part of Gwadar tehsil’s total area of about 370,000 acres.

Most of these projects also exist only in files at the offices of builders and developers. Development works are taking place only at 17 of all the residential schemes the GDA has approved. Similarly, only four industrial units, two bazaars and two multistorey apartment buildings are at some preliminary stage of development.

The NOCs for all the rest have expired because work on them could not start within the government-stipulated time frame. These include Golden Palms, the largest private residential project planned for Gwadar. It was to stretch over 1,000 acres.

Most signboards announcing real estate projects are rusting due to a combination of moist sea air, high temperature and corrosive sandstorms that blow across Gwadar throughout the year. Not even a hint of construction can be seen around them. Only vast arid land meets the Arabian Sea around Gwadar city — with a few mud houses scattered around.

Abdul Wahab works as an engineer with a government department in Karachi. A muscular Baloch man, he belongs to the city’s Lyari area. Back in 2003, he wanted to invest some money in real estate in Gwadar. Contrary to the advice some of his friends gave him, he thought it would be a good idea to avoid engaging a real estate agent.

He instead believed that his acquaintances in Gwadar, being prominent politicians in the area, would help him secure a piece of land without a legal or financial hitch.

Wahab purchased 10 acres of land in Shanikani area in Gwadar tehsil at a price of 800,000 rupees per acre. His acquaintances described the seller of the land, one Abdullah, as an honest gentleman. Wahab went to Gwadar to seal the deal. He was duly shown a piece of land. Later, at a government office, ownership of the land was transferred to him — or this is what he believed. He returned to Karachi “confident” that his “investment was safe”.

Wahab planned to use the land for a private housing project at some later stage, obviously not knowing what was in store for him.

In August 2006, Nawab Akbar Bugti, former chief minister and ex-governor of Balochistan, was assassinated allegedly by security forces. The murder resulted in large-scale protests and violence throughout the province, including in Makran division of which Gwadar is a part.

Real estate prices in the area immediately plunged. These circumstances, Wahab says, forced him to shelve his housing project indefinitely. He could not even visit his property in Gwadar for a few years.

Wahab decided to revive the project only when real estate prices in Gwadar surged again recently. Boost in infrastructure development projects being carried out in the area as part of the China-Pakistan Economic Corridor (CPEC) over the last year or so have revived the hopes of many investors like him.

He visited Gwadar a few weeks ago to obtain an NOC for apartments he wanted to build on his piece of land. When he went to the revenue department for verification of his land ownership, he was in for a massive shock. No record existed that showed that he owned any land anywhere in Gwadar.

He went looking for the man who had sold him the land. Abdullah’s response was categorical: his responsibility had ended after land ownership was transferred to Wahab; if the records could not be found that was not his headache. Even Wahab’s influential friends could do nothing to help him. He has lodged a complaint at the office of the deputy commissioner in Gwadar but has little hope of either finding the ownership record or getting his money back.

Such cases are common, says Sheikh Haris, a real estate agent in Gulshan-e-Iqbal area of Karachi. He deals in sale and purchase of land in Gwadar and knows of dozens of instances in which buyers found that ownership of the land they had paid for was never transferred to them. Or worse, that land did not even exist.

The case of Muhammad Irfan, an accountant at a private company in Karachi, is slightly different. He was tempted to invest money in a housing project in Gwadar in the first half of 2006 — a time when a real estate boom in the area was at its peak. The first phase of Gwadar’s deep sea port had just been completed and the government was billing the city as a future hub for international commerce. Bugti’s murder was still a few months away.

Irfan booked a plot in a private housing scheme, Arabian City Gwadar, and started paying its price in monthly instalments. He never visited Gwadar; he did not even know the location of the housing scheme. This was his first mistake.

Five years ago, he came to know that the NOC for the scheme in which his plot was located had been revoked. He immediately stopped paying instalments, without cross-checking the information. He did not realise that this was going to be his second misstep.

In April this year, Irfan logged in to the GDA’s website, which provides updates on private real estate projects running within its jurisdiction. He found out that the NOC for Arabian City Gwadar had been restored. He, however, is not sure if he is still eligible to own the plot he had reserved because he has not been paying his monthly instalments for years.

No official land records existed for the entire Makran division before 1992. That year, Balochistan’s revenue authorities started dividing the land in the division into different categories — between agricultural and residential on the one hand and between private, communal and state-owned on the other. The process is known in official jargon as land settlement.

According to the rules of the process, state-owned land included all barren areas not under any communal or private use. Land acquired or seized by the government for official purposes, as well as land donated by local tribes for government buildings, infrastructure and installations, was also included in this category.

Tribal/community land was classified as shamlat-e-deh (surroundings of a village) and included pastures, forest reserves and/or water courses and reservoirs.

Privately-owned land was generally being utilised for housing and agriculture. Agricultural land was subdivided into three types: irrigated by siah-aab or some permanent source of water such as a canal, a stream or a well; irrigated by sailaab or floods; and rain-irrigated or barani.

The office of a tehsildar (land collector) was established in Gwadar after land settlement started. Those employed at the office were given the task of identifying state land, marking private property and determining the respective sizes of the two categories of land.

They had another important task assigned to them: registering private lands in the names of individuals and groups. The process required that those claiming ownership of a piece of land prove that it has been under their use for at least 12 years prior to the settlement.

Hayatt has been writing on issues arising out of land settlement in Gwadar for a few years for leading Urdu language newspapers published from Quetta and Karachi (even though his formal education is limited to matriculation). He claims that only 50 to 60 families own most of the agricultural land in Gwadar tehsil (that includes Gwadar city). How land settlement here took place is the reason for this highly skewed land ownership, he says.

Hayatt, who has hosted talk shows for three years at Radio Pakistan Gwadar and has been a presenter on the Pakistan Navy’s FM radio Bayzaan, says most Gwadaris did not understand what the settlement process meant.

Only bureaucrats, government officials, smugglers and those who were engaged in politics knew its intricacies. They saw the settlement process as an opportunity to own vast tracts of land that originally belonged to no one, he says.

The settlement staff helped these informed and influential individuals and groups claim ownership of land through fabricated documents and proofs, Hayatt says. In the process, he adds, many officials themselves became owners of the land given to them as a reward by those who had benefited enormously and unduly from the settlement process.

Shakeel Ahmed Baloch, a former member of the National Assembly from Gwadar who later became a judge of the Balochistan High Court, said something similar in 2008. “Influential people from Gwadar and from other parts of the province and the country bribed patwaris (revenue clerks) to get land registered in their name,” he said in an interview with the Herald. Many of the new landowners, according to him, did not even belong to the area, let alone having used local lands for 12 years.

Ahmed Iqbal is a poet. He owns a private Balochi language television channel and is the president of Gwadar Builders and Developers Association. He believes the ongoing real estate boom in Gwadar is not genuine because very few builders and developers have applied for and received new NOCs for real estate projects in the last year or so.

“[Around] 90 per cent of all the NOCs were [issued in] 2006. Many of those old NOCs have been transferred to new [builders and developers],” he says. This transfer has created the impression that new projects are being launched.

Iqbal cites a number of reasons to explain why reports of a thriving real estate sector in Gwadar are exaggerated. Firstly, he says, the Baloch living in and around Gwadar have no experience of being construction workers. They work as fishermen, peasants, herdsmen and traders but seldom as daily wage labourers adept at handling brick and mortar. Builders and developers, therefore, need to bring in labourers from outside the area.

But this is not easy because of the activities of Baloch insurgents. In the middle of the last month alone, unidentified assailants opened fire at a construction site in Gwadar. The firing resulted in the killing of 10 labourers, according to daily Dawn. They were all residents of NaushahroFeroze area of Sindh province. No one will happily leave their home and hearth to work in an area that has such precarious law and order, Iqbal argues.

Such violence also has a multiplier effect. When news about it reaches the families of other labourers working in Gwadar, they are made to return home, leading to large-scale shutdowns on construction projects, he says.

The second impediment to real estate development is shortage of water — a chronic problem in Gwadar. Since construction cannot happen without water, developers and builders have to fetch it from Mirani Dam in Kech district, 200 kilometres to the north of Gwadar, in 5,000-gallon tankers that cost 20,000 rupees each.

To bring down the cost of water transportation, they have been pleading with the district administration to allow them to fetch water from Akra Kaur Dam – located within Gwadardistrict – but those requests have been turned down, says Iqbal.

The third problem, according to him, is inexperience of the GDA officers. The authority does not have staff that is fully conversant with planning a city projected to be a metropolis of millions of residents in the future.

On a hot morning in April this year, the parking lot of the deputy commissioner’s office in Gwadar is so full of people that no room is left for parking even a single vehicle. Most of the people present are residents of Pishkan, a union council not far from the city. They are protesting over being left out of the ballot for plot allotment in a government project called Maanbar Housing Scheme.

Exactly nine years ago, another group of people was protesting for the same reason at the same place. People from not just Gwadar but also from all over Makran division were then complaining that the government had kept them out of plot allotment in Singhar Housing Scheme, another government-funded project.

The only difference between the two incidents is how they were handled by the district administrators. Nadeem Iqbal, Gwadar’s district coordination officer back in May 2008, locked his office from inside, allowing only a limited number of visitors to get in.

In contrast, the just transferred deputy commissioner, Tufail Ahmed, deserted his office, taking all his work to his official residence. “Sahib has not been sitting in the office for the past many weeks and there is no chance that he will come to office today either,” a peon tells protesters who try to force their way into the deputy commissioner’s chamber.

The two protests highlight one important fact: government housing schemes in Gwadar have a history of being controversial.

The first such scheme was New Township Housing. It was launched on state-owned land after Gwadar’s municipal committee passed a resolution in 1984 that said the city needed a planned residential facility for the poor and the needy. The committee envisaged a project that included land for amenities such as schools, parks, mosques and a hospital.

The scheme soon ran into trouble because the price at which its residential plots were being allotted was insufficient to meet the cost for developing its infrastructure and the provision of civic amenities. In 1991, the provincial government allowed Gwadar’s deputy commissioner to carve out commercial plots to be sold at market prices so that their proceeds could be used for carrying out development works.

Today New Township Housing has no park, no school and no hospital, says Abid Rahim Sohrabi, chairman of Gwadar’s municipal committee.

He also complains that “every deputy commissioner since 1991 has allotted plots” to people belonging to the area the officer himself came from. “The result is that Gwadaris have only three per cent of plots or houses in New Township Housing.”

Singhar Housing Scheme was the second project the government initiated. Situated on Koh-e-Batil, a mountain that overlooks Gwadar city to its north and the Arabian Sea to its south, it was inaugurated in 1992. At the time, nobody envisaged that Gwadar will one day house a deep sea port capable of linking Central Asia and China with the Middle East and Africa.

When the construction of the port (situated to the east of Koh-e-Batil) began in early 2000s, Pakistan’s rich and mighty rushed to own plots in the scheme. Gwadar’s only five-star hotel is also located next to it.

Today, prices of plots in Singhar Housing Scheme exceed those in the Defence neighbourhoods of Karachi, Islamabad and Lahore, says Sohrabi. This effectively excludes the poor people of Gwadar from owning a plot or building a house there — in spite of the fact that originally 45 per cent of the plots here were to be given to Gwadar’s fisherfolk at subsidised prices.

Even though the scheme has been extended multiple times since its launch, not a single fisherman owns a plot in it, says a local journalist without wanting to be identified by name. Only a few dozen of its plots were ever allotted to people from Gwadar district, he claims.

The latest government project, Maanbar Housing Scheme, is the brainchild of Tufail Ahmed. It originally had 4,421 plots — of which 3,721 were residential and 700 commercial. Later, the size of the commercial plots was reduced from 1,000 square yards each to 500 square yards to accommodate the people of Pishkan. Those who still failed to get plots were the ones who were protesting at the deputy commissioner’s office a few weeks ago.

Critics of government sector real estate projects allege that these are launched by officials in order to make illegal money. The allegation goes that these officials manipulate both land prices and allotment processes in order to benefit the people who bribe them massively.

Hayatt laments that most of the local people who do get plots in government-run real estate projects fail to build houses. They sell their plots soon after those are allotted to them, he says. He remembers asking Ahmed as to why he had devised Maanbar Housing Scheme when he knew that the local residents getting plots in it would have no resources to build houses.

The officer said he wanted the people of Gwadar to have some of the state land (that constitutes about 20 per cent of the total land in the tehsil) to themselves at a time when the federal and the provincial governments were taking over massive tracts of this land for different administrative, commercial, industrial and security-related projects.

Consider a hammer with a handle — that is what Gwadar city looks like from above. The port and the posh housing area of Singhar Housing Scheme are located within the head of the hammer, which is almost entirely surrounded by the Arabian Sea — except where it meets its handle; the old part of the city is stretched along the length of the handle that divides the sea into two parts — eastern bay and western bay; all the new housing projects – both in the public and the private sector – are located where that handle dissolves into the mainland.

Sitting comfortably behind a large desk inside his official residence in Gwadar, Ahmed acknowledges that there have been cases of cheating and fraud in land allotment as well as in the land settlement process. But he denies allegations of corruption in the government’s real estate projects and claims, without elaborating, that these projects have benefited the local people one way or another.

He argues the district administration cannot stop people from selling their plots to non-locals once the allotment has been done — unless the provincial government does some legislation against such sales. Yet, he says, he has issued an administrative order that those being given state land, in lieu of their properties taken up by a free trade zone being built in Gwadar, will never be able to sell their newly acquired plots without government permission.

Ahmed explains that the reason there are ambiguities and errors in land ownership records is that land settlement was done manually. As a result of these ambiguities and errors, there have been many disputes regarding land ownership in Gwadar. But, he claims, most of these disputes have been amicably resolved.

Court records seem to back his claim. The number of cases in which private landowners had challenged the land settlement process ran in hundreds only five or so years ago but their number has gone down to only 16 now.

The revenue department officials say around 20,000 acres of land scattered in different parts of Gwadar tehsil remains to be settled. There are rumours that the relatives of an influential federal minister from Balochistan are trying to own this land. The scramble for this land will certainly create new disputes, even as the old ones have been mostly resolved.

This article was originally published in the Herald's June 2017 issue. To read more subscribe to the Herald in print.

The writer is a staffer at the Herald.