FGEHA Govt of Pakistan

Federal Government
Employees Housing Authority

Govt of Pakistan

Government of Pakistan
Ministry of Housing & Works

Joint Venture FAQs

Q.1      What is a Joint Venture (JV)?       

Ans: Joint Venture means an arrangement between FGEHA and private firms /investors / developers / individuals agreeing to pool their resources for the purposes of accomplishing a housing project, in order to engage the Private Sector and Provincial Governments for land banking and development of Housing (plots/apartments) Schemes in order to accommodate the maximum number of registered members of FGEHA and other Specified Groups.

Q.2 How can be applied for Joint Venture?

Ans: FGEHA shall invite Expression of Interest (EOI) through advertisement in national dailies for Joint Venture from well reputed national or international housing developers, investment companies / firms / individuals to launch housing schemes in Federal and Provincial Capitals.

Q.3 What are the documents required for Joint Venture (JV) proposal?

Ans:

  • The documents required for joint venture are given hereunder:
  • Authentic land ownership documents (Fardaat) issued by the revenue authority concerned, not older than past three months;
    • Status of utility services (like electricity, gas, water etc.) at the site;
    • GIS Map of proposed site superimposed on Google map will be provided;
    • Agreement to Sell / Power of Attorney with the original land owner (not required in case of self-ownership) will be provided with the proposal;
    • Affidavit from land owner that land is free from any litigation and all other encumbrances;
    • An undertaking that the Firm is willing to comply with the provisions of the standardized MoU (Annex-A) while entering into joint venture agreement with the FGEHA,

  • In addition to the above listed documents, following are also required in case a JV partner intends to opt for development/construction work(s):
  • Full name of the individual / firm and permanent address thereof;
    • Letter of incorporation of Firm from (Registrar of Firms);
    • Consortium Agreement with clearcut agreement of parties delineating their roles and responsibilities in relation to the JV proposal being submitted;
    • The registration of firm with Pakistan Engineering Council in relevant category equivalent to scope of the work is to be provided;
    • Complete information of housing and infrastructural projects, completed during last 5 years (if any) along with photographs/brouchers and documentary proofs, will also be required, along with the following:
  • Name of Projects, Place and Client
    • Scope of Work
      • Details of Projects
      • Certified Proof of financial soundness (from bank)
      • Copy of NTN
      • Annual Turnover of the Company
      • Undertaking that the firm has never been blacklisted by any Govt. / semi Govt. / Attached Department / Autonomous Body;
      • Affidavit to the effect that proposed land / site is free from any litigation; and
      • Performance certificates from the clients, if any, for whom similar services have been rendered.

Q.4 What is the criterion for applying for Joint Venture (JV) with FGEHA?

Ans: Following shall be fundamental principles of Joint Venture:

  • Minimum forty (40) and five hundred (500) kanals of land shall be precondition for new apartments / plots schemes respectively; and any apartment scheme proposed in an already developed society shall be planned and executed in accordance with applicable local bye-laws of local Authority / Government concerned;
    • Land  should be in a compact piece and free from all encumbrances;
    • Land shall preferably be located on main road or have easy access from main road, width whereof shall be determined by the rules of the regulatory authority concerned;
    • Only real owners or those with valid power of attorney/valid legal agreement to sell with owners of land, shall be eligible;
    • Authentic ownership documents should have been issued by the revenue authority concerned in the past three months;
    • Land title shall ultimately exclusively rest in the name of FGEHA, whose transfer will precede commencement of construction/development work(s), and that will serve purpose of guarantee against the JV Partner / Contractor to ensure execution and completion of construction and development works;
    • Interested parties shall demonstrate technical and financial capacity to execute and complete the project, as per PEC / FIDIC guidelines;
    • There shall be minimum 75% quota/share in residential apartments/houses for FGEHA registered members or as may be decided based on the response from registered members;
    • Quota/Share of FGEHA in Commercial area will be minimum 10%, and that of JV Partner shall be determined on the basis of outcome of Financial Feasibility of the project prepared by Transaction Advisor. No financial/execution risk shall be undertaken by the FGEHA. Feasibility of scheme and response of the allottees shall automatically determine the success of scheme;
    • JV Partner shall agree to partner in order to provide plots/apartments on ‘No Profit No Loss’ basis for Registered Members of FGEHA;  
    • The developer will propose the cost of construction while taking into consideration the Schedule of Rates of items (MRS, MES, PWD Rates etc.) as notified by Government, which will be finalized after vetting by the Vetting Consultant, to be engaged by FGEHA, and approval by the Executive Board, FGEHA;
    • The developer shall engage a consultant from pre-qualified consultants of FGEHA for the purpose of designing of project and design fee will be determined by Technical Committee FGEHA, which shall be paid by the JV Partner if his/its shares goes beyond 50% of the project;
    • Valuation of the land offered by the JV partner, shall be done by the Land Price Assessment Committee; 
    • The proposals for JV projects will be entertained under JV Models.

Q.5    What are modes/models of Joint Venture (JV)?

Ans: There are four different models under which interested party/firm can submit JV proposal:

  • Land Sharing

JV proposal is submitted on one of the following methods:

  • 70:30 wherein 70% share will be of FGEHA and 30% will go to the partner, and development expenditure is shared by both parties (FGEHA & JV partner).
  • 1:4 where one developed kanal is given to the JV partner (development cost will be borne by FGEHA).

Minimum share of FGEHA in commercial will be 10% subject to recommendations of Transaction Advisor (to be hired by the FGEHA). And No payment for land is made to the JV partner.

  • End Product

In End / Finished Product Model, the JV Partner shall provide the End/ Finished product (houses / apartments) on turnkey basis. All costs will be borne by the JV partner. No upfront payment of land will be made. The payments against the end product will be made by the FGEHA on achievement of milestones as agreed in the relevant agreement. The shares of JV Partners in residential and commercial areas will be determined by Transaction Advisor. For all development/construction works, first right of refusal shall be given to JV Partner/Developer subject to fulfillment of all Technical and Financial Capacity in line with Pakistan Engineering Council (PEC) and FIDIC conditions, in its capacity as the Contractor. 

  • Investor Model

JV partner will provide the finished/end product (developed plot/apartment) to the FGEHA on turnkey basis through its own financing. All expenses will be borne by the JV Partner, who shall be given first right of refusal for construction/development works subject to fulfillment of all requisites given in JVP Regulations 2020. No upfront payment of land will be made. FGEHA will pay the cost against finished product as per one of the following arrangements:

  • 20% down payment and remaining amount will be paid in installments within 1-4 years or as mutually agreed after the completion of project;
  • 100% payment after the completion of project; payment timeline be extendable by two more years;
  • Any other payment plan as mutually agreed and suitable/feasible for FGEHA members/project.
  • Facilitation Model

In Facilitation Model, FGEHA shall act as regulator/facilitator of a private housing scheme and accord requisite approvals of the proposed scheme (plots/apartments) by the JV Partner. All expenses will be borne by the JV partner. FGEHA’s share in residential will be upto 70% and thus minimum 30% will be of the JV partner, whereas residential share of the partner will be given in phased manner in order to ensure completion of construction/development works. 100% commercial will be of the JV partner.

Q.6 How much land is required for Joint Venture?

Ans: As explained above in the Question 4.

Q.7 What will be financial management plan?

Ans:

  • Strong fiscal control over allottees subscriptions shall be ensured through joint collection account to be controlled/operated by the Authority.
  • Payments plan (that for allottees of JV Partner to be decided in consultation with him/it), brochures, allotment letters shall be issued by the Authority.
  • Part of proceeds from joint collection account shall be utilized for transfer of land title in name of FGEHA. Remaining proceeds shall be utilized for infrastructure development and other expenses.

Q.8 What is the evaluation of JV proposals process?

Ans: Following is the evaluation process of a JV Proposal:

  • Scrutiny of JV proposal and site visit to inspect land by the Sub-Committee of Technical & Evaluation Committee
  • Verification of land title
  • Assessment of land price by Land Price Assessment Committee
  • Tentative cost of development / construction
  • Transfer of land title in name of FGEHA & signing JV agreement
  • Finalization of layout plan and engineering design
  • Signing of Construction agreement

For further details, please peruse JV Policy and JVP Regulations 2020.

Q.9    How much time does the evaluation process of JV proposals take?

Ans: The evaluation process normally takes 2-3 months depending subject to submission of all requisite documents required for JV and land verification from concerned revenue office.

Q.10   What is method of payment for land and construction work(s)?

Ans: No land price will be paid in Land sharing Model. However, in other JV Models, a percentage (maximum 20%) is paid at the time of transfer and remaining paid against work done basis as agreed in the relevant agreement.

Q.11   Can JV partner get any share in Residential and Commercial?

Ans: As explained in JV Models above in Question 4.

Q.12   Of which categories/sizes are plots/apartments required?

Ans: Following are the categories/sizes of plots/apartments:

Category/SizePlotApartment
I50 × 901800
II40  × 801500
III35  × 701100
IV30  × 60900
V25  × 50700
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