Punjab govt resisting due increase in land records fees

‘High operation and maintenance costs necessitate fee increases’

LAHORE: The Punjab government is resisting any move to increase fee for land records of rights (fards) copies as elections of 2018 approach; meanwhile, the Punjab Board of Revenue has warned that Land Records Management and Information System (LRMIS)’s interventions will not be financially self-sustainable, unless the fee structure for fards and transactions issuances is revised upwards, a highly placed official confirmed.

Referring to Net Present Value (NPV) and Rate of Return (IRR) analysis, the official told Pakistan Today that increase in fee for fard issuance needed to go up to Rs 300 from Rs 173 and raise in fixed fee for transactions issuance to Rs 1,500 from currently notified Rs 500. He said that this was considered necessary to make the project financially self-sustainable over the medium to long-term and generate a positive financial NPV and an IRR higher than the hurdle rate of 10 per cent. Likewise, he said, increase in fee for these types of transactions to 4.5 per cent of land/ transaction value compared to the existing 3 per cent is necessary.

Pointing an ascribe average land/transaction value of Rs 815,133, he said that this implies that the average fee per transaction of these types would increase to Rs 36,700 compared to the current average of Rs 24,500.

“It is understood that these future costs are required to maintain and improve the existing level of service to beneficiaries, and are necessary to realise and sustain the economic benefits”.

Giving the justification for fee increases, he said that the core rationale of the requirement for fee increases for fard and transaction issuances was the high expected capital and operation and maintenance costs forecast by the Punjab Land Records Authority (PLRA), to maintain, expand and improve the services offered to citizens. He said that increases in fees were required if the government aims to make the computerised land record system interventions financially self-sustainable and “does not want to subsidise the system from its resources.” He added that the end-line evaluation survey of the project showed that beneficiaries were willing to pay higher fees for better service delivery at the service centres, and that the existing fees were still substantially lower than the opportunity costs of obtaining fard and transaction issuances before the project.

“Given the high willingness to pay for these improved services, the government will be able to fully recover the costs of these services by increasing fees and still pass on benefits to citizens in the shape of reduced transaction costs” the official added.

Arazi Record Centers (ARCs) have been established in all 143 tehsils of 36 districts in several phases of the project duration through which computerised land record services including issuance of fards and transactions are being provided to the public.

He said that the key concern about the patwari culture was the high transaction costs for those requiring land-related services and opportunities for and prevalence of rent-seeking and corruption, a system which favoured large landholders over the small and poor. He said that replacing that system with a modern, transparent and accessible digital land record management system was a first step of government’s strategy to establish a title-based land registration system in the long term; the project focused on reforming the century old system inherited from the British with manual land record management system in rural areas of Punjab. ‘This includes not only a technological change but also a tremendous cultural change for the general population as well as the patwaris, he added.