E-Kantipur

KATHMANDU, SEP 05 - After a decade’s hiatus, the Employment Provident Fund (EPF), country’s only social security providing organisation, is set to set foot into the sector of construction of commercial complex and apartments in a big way.

The institution is doing legwork to build individual houses, apartments and commercial complexes in Lagankhel and Teku of Kathmandu, Kalyanpur of Chitwan and Itahari of Sunsari. There will be two apartments, two commercial complexes and one housing project. The institution is investing more than Rs 1 billion in these projects.

The EPF had first initiated the low cost housing scheme for its members by constructing 112 houses in Pokhara a decade ago. A total of 109 houses were sold to its members on an instalment basis. This time, it is going for apartments terming that all its members cannot afford individual houses.

The entry of the EPF in the apartment and commercial complexes sector will make the rental market competitive. As it is developing these infrastructures by purchase government lands, it will be in a position to sell at competitive price.

EPF’s foray into the apartment and housing sector is part of its commitment that it had made to the government when a new administrator was appointed. The government  and the administrator on February, 2009, signed terms of reference which mentioned that EPF would build 1000 houses or apartments in Kathmandu Valley and 200 outside the valley for EPF members within five years. In order to comply with the terms of reference, EPF is intensifying its housing and apartment projects.

The reason for going big into apartments and commercial complexes is that EPF wants to increase its exposure in housing loans. At a time when banks and financial institutions are aggressively investing in housing and real estate, the EPF has so far invested less than one percent in projects it had constructed. According to EPF administrator Ramesh Bhattarai, it wants to increase that amount to three percent. The EPF is the largest institutional lender in the country with financial resources around Rs 90 billion. Till now, it has given home loans worth Rs 6 billion to its members.  

The EPF board already approved a housing project in Kalyanpur, Chitwan. “The board has already approved the project’s drawing design and cost estimate,” said Bhattarai. It is preparing to issue a tender notice for a 130-house project that it intends to complete within two years of awarding contract. The project’s preliminary cost is Rs 500 million which may go up with the revision process is also going on. “The cost has to be revised since the new fiscal year began before the start of the project,” said Bhattarai. “As per the revised estimate, it may go up to Rs 600-650 million.”

The reason for going in for apartments, according to Bhattarai, is that not all EPF members can afford individual houses. The EPF is in the process of calling tender for appointing a consultant to draw up the design and estimate the cost for the apartment project in Teku. It is constructing apartments there after its consultant suggested that building apartments instead of commercial complexes would be appropriate in the area. The apartment project there will cover 19 ropanies of land.

In Itahari, it will build both apartments and commercial complexes over the same spread. Though it is yet to determine the height of buildings, estimates show these will be spread over 25 katthas of land. In order to sell these apartments, it is providing loans to its members at subsidized rates.

Already a major player in the rental business of commercial complex, the EPF has recently awarded the contract of constructing a seven-storied commercial complex in Lagankhel to a joint-venture of Sharma and Company, Anak Construction and Mahadev Khimiti. The construction of the commercial complex being built at a cost of Rs 312.64 million, will kickstart on September 13. 

The EPF has already built commercial complexes in Thamel and Sundhara of Kathmandu and Lakhanchowk and Birauta of Pokhara.

One more building is in the offing. The EPF is constructing a seven-storied building in Pulchowk, besides the Appellate Court, Patan, where it will shift its central office. Its current headquarters, also in Pulchowk will be given on rent once the new building is complete.

Posted on: 2010-09-05 08:33

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