ISLAMABAD, Feb 25: The government is considering a major initiative to unlock the potential of millions of acres of state and private land for industrial, commercial and housing use under a pre-defined land acquisition and disposal mechanism.

Prime Minister Shaukat Aziz will preside over a meeting of the Economic Coordination Committee (ECC) of the cabinet here on Monday to look into the question of creating a ‘land bank’ that would also feature un-utilised state land, including land in possession of military, railways, ports etc.

A senior government official told Dawn that separate criteria will be put in place for acquisition of land for dams, hotels, wholesale investors, agricultural enterprises and other industrial investments, and their pricing structures would be based on respective productivity levels of each sector.

He said President Musharraf had recently told a meeting that there was no problem even in unlocking the military land for commercial and industrial production but some rules hindered opening up of such land for industrial activities in the private sector. He had, however, encouraged the ministries to frame transparent and uniform rules that could be applied to all un-utilised state lands.

While the new mechanism is to cover disposal of state land for construction purposes to clear a huge housing backlog, a major objective is to satisfy international lenders to finance big dams.

Similarly, big international investors of food and wholesale chains will be facilitated to have their own pieces of land where they could establish their own agricultural fields for sustained supplies. Separate but transparent formula would also be made available for star-hotels and commercial plazas.

A procedure would be announced vis-à-vis acquiring of private land for allotment to private sector, particularly foreign entrepreneurs, to facilitate foreign direct investment under the Land Acquisition Act. Its main objective is to relieve prospective bidders from complexities of laws governing pre-emption rights of citizens.

The government says that the private sector face difficulties in purchasing large chunks of land for investment because of multi-owner titles of land and also because in most cases such sales result into litigation under the Land Pre-Emption Act.

"The government wants to introduce a uniform policy to facilitate investors in this regard," said another official.

He said that state land in all cities would be made part of a 'land bank' for utilisation by the private sector for investment, he said.

He said the government planned to develop such state land by providing basic facilities like gas, water and electricity and fix a price depending on its location. The land would then be provided to the investor who would be required to pay 10-15 per cent of the whole price as down payment and the remaining 90 per cent on the basis of deferred payment.

When an investment plan was approved by the government, the investor would be required to meet a time-line for implementation of the project and start production in one year, he said. Ninety per cent of the land cost would either be collected from the investor in five years after receipt of the down payment or in five years after the commercial operation of the plant on a case-to-case basis, he added.

The new policy would specifically benefit special-purpose industrial areas like textile city, leather city, sports city and silk city, he observed.

In a recent study of the World Bank, about 79 per cent investors identified land acquisition and site development regulation as barrier to investment in Pakistan.