Discusión de resultados

Investments in construction can be either public (including donor) or private, national or international - or a combination of these (see Figure 5.1 for Dhaka, for example).

FIGURE 5.1 | Different Funding Sources of Construction Sites, Dhaka

Other sources:: Co-operative (2.56%; Private and Bank Loan, 2.14%, and Foreign Aid, 1.71%) - Source: Dhaka country partners

Large-scale construction projects can be residential, commercial, industrial, institutional or infrastructure and for security in the case of Afghanistan (see Table 5.2 for all cities and Figures 5.2 and 5.3 for the proportions identified in Kathmandu and Chennai through the mapping exercise).

TABLE 5.2 | Proportion of on-going residential construction projects by city (mapped in 2014)

Kabul Dhaka Chennai Kathmandu Lahore

64% 69% 63% 65%

Source: Country partner mapping reports

In all the countries studied, irrespective of the nature or provenance of finance, two forms of investment, with their concomitant typologies dominated. These were as follows.

1. Large-scale public infrastructure projects - particularly roads (Chennai, Kathmandu, Lahore and Kabul) or flyovers (Kabul), but also the Chennai Metro Rail (Chennai).

2. Residential real estate - particularly high-rise, private, middle and upper-class condominiums (Dhaka, Chennai, Kathmandu) and low-rise, residential colonies/enclaves (Lahore, Kabul), vast public housing relocation schemes (Chennai), and townships and satellite cities (Dhaka, Kabul).

FIGURE 5.2 | Construction Projects by Type, Kathmandu Municipality

Source: Nepal country partners (Social Science Baha)

58.76% 17.31%

12.61%

4.91% _{Developer, Flat sale}

and Bank loan Private

Developer and Flat Sale Public 6% 22% 2% 7% 63% Commercial Infrastructure (Road) Infrastructure (Other) Institutional Residential

CHAPTER 5 |Construction, Employment Conditions and Migrant Contractual Arrangements

Urbanisation-Construction-Migration Nexus |5 Cities|South Asia Final Report | PO 6425

90 Dr Sunil Kumar and Dr Melissa Fernandez, LSE Commissioned by South Asia Research Hub, New Delhi, India

FIGURE 5.3 | Construction Projects by Type, Chennai Source: India research partner

There was a mix of the kinds of construction projects mapped by each country partner (see, Figure 5.1 for Kathmandu as an example). These ranged from public infrastructure projects and commercial establishments to individual/private construction works. Residential building projects tended to comprise the highest proportion of all ongoing activities. This included foundation work such as electricity cabling and canal construction on large individual plots of land. In Kabul, a commercial development3 inside an industrial district was initially selected as a study site; however difficulties with access meant the researchers had to change focus, so a residential project was

selected instead. Moreover, in all cities, formal construction activities operate alongside the continued haphazard and uncontrolled development of informal settlements and other smaller-scale individual private activities. Chennai's peri-urban construction landscape is further characterised by large-scale IT and SEZ industry developments. Afghanistan is unique as the massive flows of external aid since 2001 have mediated the growth and nature of Kabul's development, particularly as these pertain to major military/security installations and donor-funded government reconstruction projects. These have not only generated direct building activity, but the International Assistance Forces (IAS - as in, the security, reconstruction, development and humanitarian agency workers) that they cater to, create new demands for residential and commercial property development (see for example, Unruh and Shalaby, 2012; Esser, 2013; Miszak and Monsutti, 2014; Bove and Gavrilova, 2014).

5.3 ACTORS

The construction sector comprises a vast range of actors that are present either throughout the construction process, or at particular stages of development. These actors, amongst others include landowners, developers and clients (public and private), investors and lenders (including donors, government departments), architects and engineers, construction companies and building contractors, project managers, private security personnel, contractors including labour contractors, workers – unskilled to skilled, and other non-state actors.

In all of the South Asian cities studied, these actors were present with more or less prominence, depending on the local context as well as the project typology. In Nepal, for instance, where the vast majority of residential development is ‘owner-built’4 the government plays a minor role, limited to issuing building permits and providing basic urban services, and there was no formal contract between the owner, the contractor or the designer. In all cases, privately hired security personnel were present - the extent to which they were considered to be an intimidating presence for the workers varied on a case by case basis. Their control over the working population in the projects cannot to be

underestimated; like walls, they limit the opportunities for movement, action and freedom.

69% 5% 2% 23% 1% Residential Commercial Institutional Infrastructure (Chennai Metro Rail)

PO 6425 Final Report Urbanisation-Construction-Migration Nexus |5 Cities|South Asia

Commissioned by DFID’s South Asia Research Hub, New Delhi, India Dr Sunil Kumar and Dr Melissa Fernandez, LSE 91

In Afghanistan and Pakistan, the backdrop of war and conflict has and continues to play a role in the kinds of actors involved in construction. In both cases, a relatively small number of powerful players dominate the industry and in both, real estate developers are intimately connected to highly influential political actors, and sometimes appointed as politicians themselves. Afghanistan, in

particular, is controlled by a politically connected oligopoly, commonly referred to as the ‘construction mafia’ with its actors (politicians, contractors and warlords) entangled with the poppy economy and with large-scale, private and commercial construction (for example, shopping malls and the

‘narcotecture’/‘Pakistani’ villas (Lister and Pain, 2004)5.

In Pakistan, their military is a major actor (developer) of real estate, as is the Provincial Government, providing land and elite housing projects (colonies) to senior military personnel and upper middle class civilians. The presence of these powerful actors influence the way the sector operates in a broad sense. 6 This includes both land acquisition practices and also the kinds of time and delivery pressures felt by particular project managers if and when government officials are directly involved and want certain outputs to be met.

India and Bangladesh large real estate developers are supplying apartment blocks to the largest and most profitable demand sector: upper and middle-income groups. In Bangladesh, this is partly fuelled by a serious housing deficit and a growing consumption base7. In Chennai, based on recorded apartment prices, 68% of all residential units under construction target the upper class investor, 10% target the super-luxury segment, while only 22% target the middle class (Table 5.3). The drive to launch new lucrative residential and office projects appears relentless, even in light of the fact that the city’s unsold housing (and commercial) stock is rising8. In this context, the role of real estate

consultants, investment bankers and the corporate media in promoting specific locations and creating the right climate for large scale, high-end residential developments, cannot be underestimated.

TABLE 5.3 | Price Range of Smallest to Largest Residential Units in large-scale construction projects in Chennai (Mapping, 2014)

Unit Size Range up to 1000 SFT Range of Rates/SFT of Unit Area

in 2014 (based on OMR)

Price of Smallest Unit in Unit Size Range Rs.

Price of Largest Unit in Unit Size Range Rs.

Price Range Rs. 100,000's

Price Range for Unit Size Range Rs. 100,000's

Rate/SFT in 2014 Rs. 405 SFT 1000 SFT

Lowest Range 4,000 16,20,000 40,00,000 16-40 16-43

Average Range 4,250 17,21,250 42,50,000 17-43

Unit Size Range greater than 1000 SFT

Rate/SFT in 2014 Rs. 1014 SFT 4645 SFT

Average Range 4,250 43,09,500 1,97,41,250 43 - 197 43-1400

Highest Range 5,250 53,23,500 2,43,86,250 53 - 244

Super Luxury Range 30,000 13,93,50,000 1,400

Note: Average exchange rate 2014 – US$ 1 = Rs 60; 1 Euro = Rs 79 and 1 GBP = Rs 100 (http://www.x-rates.com/).