Troubled real estate sector

The country's real estate sector is in dire straits because of the non-availability of gas and power connections to thousands of newly-built apartments in Dhaka. The authorities concerned have stopped providing these two important utility connections to newly constructed houses and apartments for more than a year on the plea of gas and power supply shortage. But the refusal to provide gas and power connections has given rise to a host of problems, mostly economic in nature. The chief executive of a leading real estate company late last week told the media that more than 10,000 ready residential apartments could not be either sold or transferred to their buyers because of the non-availability of power and gas connections. The construction work of more 9.0 to ten thousand apartments has, reportedly, remained stalled for the same reason. The delay in the transfer of apartments has been taking an economic toll on their buyers in the form of the rent and interests charges on bank loans they are paying every month. Similarly, the real estate companies are also counting interest on their bank loans. The problem also has its impact on remittance flow. A sizeable part of the monthly remittance comes for the purchase of residential apartments. That flow has now almost dried up. The ongoing development in the real estate sector also has its negative impact on other stakeholders, including steel, cement, paints, tiles and electrical goods manufacturers and wholesalers and retailers involved in the trade of the same. What is more disturbing is the net effect of the slowdown on an estimated 3.0 million labourers, dependent on the sector for their livelihood. Many of the day labourers are now finding it hard to get work. The again, if the current situation persists for some more months, many real estate companies might default on servicing their bank debts, thus, hurting the banks a good number of whom are already in the midst of liquidity shortage. The situation in the real estate sector, no doubt, is pretty serious. The government may cite 'supply shortage' as the reason for its failure to make available gas and power connections. But it does not anyway help the image of the government since it is the responsibility of its related agencies to make available all the utilities to the citizens. The operators in the real estate sector cannot be blamed for continuing construction of new apartments, amidst gas and power supply shortage. The government leaders have been repeatedly assuring the people of improvement in gas and power situation within a short period. The real estate people, like many others, also had put their faith in the government assurances. But there has to be a change in the situation for the greater interest of the buyers of apartments, industry operators and the economy. The government and the leaders of the real estate sector must sit together to devise means to bring an end to the ongoing stalemate. The suggestion to introduce pre-paid meters for use of gas and electricity by residents of Dhaka does deserve a sympathetic examination. For power and gas, thus, saved could then be made available to newly constructed apartments. Installation of a new power plant or finding a new gas reserve has always been a time-consuming affair, but introduction of pre-paid gas and power meters is not. The situation can also be improved by reducing the extent of power and gas pilferage, an area where authorities are found to be, mysteriously, reluctant to act up on.