Private Company Contracted to Implement Alternative Housing in Basilia City

The Damascus governorate has provided two plots to a construction contractor to erect buildings designated for alternative housing within Basilia City, Muamar Al-Dakak, the director of the Technical Studies Directorate in the Damascus Governorate, stated during a session of the Damascus Governorate held at the beginning of March.

Mr Dakak added that if the experiment is successful, it will be expanded to accomplish the remainder of the alternative housing projects. He explained that the contractor will start work within two months, and six months thereafter, the governorate would be able to assess the effectiveness of this new method.

The inability of public sector construction institutions to implement alternative housing projects was probably the motivation behind the Damascus Governorate’s choice of a private contracting company.

Damascus Cham Management Company, which is the executive arm of the Damascus Cham Holding Company owned by the Damascus Governorate, signed an agreement in mid-February with Platinum Contracting Company to implement alternative residential towers in Basilia City, local sources told The Syria Report. The agreement was signed by Damascus Governor Mohammad Tariq Kreishati, in his capacity as the Chairman of the Board of Directors of Damascus Cham Management Company, and Zuhair AbdulAal, the General Manager of Platinum Contracting LLC.

The decision of the Minister of Domestic Trade and Consumer Protection No. 2871, dated December 14, 2017, published in issue 6, part 2 for the year 2018 of the Official Gazette, ratified the Articles of Association of Platinum Contracting LLC. According to the Articles, the company’s purpose includes executing contracting, infrastructure, implementation, and delivery works, trading in all construction and finishing materials, participating in tenders and auctions with the public, private, and joint sectors, as well as owning, selling, and investing in real estate. The Articles state: “The company is not entitled to build homes, sell them, or trade in them regardless of their type,” which is a standard clause found in all Articles of Association for contracting companies. No amendment has been published in the Official Gazette regarding this clause up to the current date.

Contrary to Mr Dakak’s comment about delivering two plots to a contractor, The Syria Report has learned that Platinum will build six towers for alternative housing on 16 plots in Basilia City. According to the agreement with the Damascus Governorate, the company will construct these towers over four years, after evacuating the occupants from the area. This means that the company will not start work before the Damascus Governorate evacuates the occupants, which has not yet happened. After that and during the construction period, Platinum will pay rent allowances to those entitled to alternative housing.

It is also noteworthy that the Damascus Governorate does not seem to have published an announcement of a tender for the implementation of the alternative housing project, nor did it announce a call for proposals from contracting companies. In the absence of any details on the administrative and procedural mechanisms, it seems that what occurred was akin to a direct awarding of the project to Platinum by the Damascus Governorate, according to The Syria Report’s sources.

Legislative Decree No. 66 of 2012 created two zoned real estate areas in Damascus; the first extends southeast of Mazzeh, known as Marota City, and the second south of the Southern Ring Road, named Basilia City. The Damascus Governorate manages these two zoned areas through the Directorate for the Implementation of Decree 66 and through Damascus Cham Holding Company, which is affiliated with the governorate. Alternative housing is one of the social housing programmes implemented by public institutions and can be paid for in instalments. Rights holders within the zoned area can apply to it.

According to Decree No. 66, the alternative housing projects were supposed to be completed by 2018. However, Law No. 10 of 2018, which amended Decree No. 66, modified the deadline for delivering alternative housing to the end of 2019. Yet, to date, none of the alternative housing towers, which were supposed to be built by the General Company for Building and Construction, the General Company for Roads and Bridges, the Military Housing Establishment, and the Military Construction Establishment, under the supervision of the General Company for Engineering Studies, have been completed. All these companies are state-owned. The work of these institutions and companies has been stalled for reasons related to the fuel crisis, changes in construction material prices, inflation, and supply chain issues, according to official authorities.

The Damascus Governorate had previously decided to consolidate the plots designated for those entitled to alternative housing in Marota City, into Basilia City only, contrary to the provisions of Decree No. 66, which stipulated that each regulatory area should have its alternative housing for its deserving residents. Thus, all alternative housing projects in the two regulatory areas are now confined to Basilia City alone, on land appropriated by the Damascus Governorate for its use.

The Damascus Governorate funds the alternative housing project. However, the entitled beneficiary is the one who pays for their alternative housing in instalments with interest, based on the estimated construction costs. Due to the significant changes in the exchange rate of the Syrian pound over the past years and the rise in construction material prices, the executing construction institutions, led by the General Housing Establishment, are raising the values of monthly instalments without prior agreement with the subscribers, as well as increasing the estimated values of the social housing units, including alternative housing.