PROJECT INFORMATION DOCUMENT (PID)

APPRAISAL STAGE

Report No.: AB1469

Project Name

/ Land Records Management and Information Systems Program (LRMIS-P) Province of Punjab
Region / SOUTH ASIA
Sector / General agriculture, fishing and forestry sector (100%)
Project ID / P090501
Borrower(s) / GOVERNMENT OF PAKISTAN
Implementing Agency
Environment Category / [ ] A [ ] B [X] C [ ] FI [ ] TBD (to be determined)
Date PID Prepared / March 16, 2005
Date of Appraisal Authorization / January 31, 2006
Date of Board Approval / June 13, 2006
  1. Country and Sector Background

The Poverty Reduction Strategy Paper (December, 2003) of the Government of Pakistan (GOP) highlights the importance of the rural economy for poverty reduction and sustained economic growth. Given that land is at the heart of agriculture and the rural economy in Pakistan, particularly in Punjab Province, land ownership and administration issues are of key importance. Inequalities of land distribution, tenure insecurity and difficulties associated with the land administration and registration system are closely interrelated and continue to impose significant constraints on both rural and urban populations, particularly the poor. Land transactions are relatively high cost, and disputes about accuracy of land rights are caused, among others, by the inefficient and dispersed land records system. As a result land markets are thin and land prices are in excess of the discounted value of potential agricultural earnings from land. The low mobility of land contributes to perpetuating the highly unequal distribution of land and, thus, livelihood opportunities.

Improving land administration and consequently the functioning of land markets in Pakistan is therefore a priority concern, linked to the broader area of governance and administration at both the central and local levels. In order to improve governance and initiate devolution, the GOP enacted on August 14, 2001, new arrangements for transferring responsibility to district, tehsil and union council governments. The underlying rationale for this transformation is to create more efficient government structures that respond effectively to local needs. Alongside local government reforms, administrative and institutional changes, including those for land policy and administration, are to be planned and executed in the context of the new devolved set-up.

Punjab has a total area of 205,345 square kilometers, and is the most populated province of Pakistan with 80.5 million inhabitants (55.6% of Pakistan’s total population). Nearly 70% of the population lives in rural areas. Agriculture plays an important role in the Province’s economy. However, the overall dispersed and duplicative nature of its land records makes land rights uncertain, negatively impacts economic development, and threatens the vulnerable and the poor whose rights remain virtually unprotected. Problematic features of the current land revenue system, recognized by the Government, are the following (elaborated in more detail in Annex 1):

§  Obsolete and opaque procedures

§  Irresponsive and inaccessible revenue machinery

§  Exacerbated disputes over rights and delays in courts

§  Increased tenure insecurity

§  Multiple institutions and dispersed responsibilities

§  Weak institutional capacity to address and solve problems

§  Lack of public awareness of their land rights and related procedures

In Punjab, high transaction costs and difficulties associated with the land registration system continue to impose significant harm on land owners and prospective land owners, (particularly the poor, who have small holdings and less access to information or resources), making them vulnerable to the predatory behavior of middlemen, and lowering the liquidity of family assets composed in whole or in part of land. As land is also a form of capital, current obstacles for documenting and enforcing land rights have the effect of lowering income from those assets through means such as rent, cultivation, sale, or access to other factors (e.g. credit). Well-defined land rights are key for productive development and factor market functioning. In addition, clear land rights have far-reaching implications for social cohesion and governance, acting as an important catalyst in stabilizing communities, empowering individuals and reducing social exclusion.

Pakistan has a land administration system inherited from the British, involving rules and regulations regarding sale, purchase and use of land resources mainly linked to the collection of land tax. The present land legislation – which is constituted mainly of the Land Revenue Act (1967) and the Registration Act (1908) – does not profess to provide for a State certificate of title to land under the aegis of a public authority. The records of rights and other documents based on the land records, by virtue of provisions in land laws, are presumed to be accurate. However, these entries only provide presumptive status of rights under land laws. Many court rulings have also maintained that entries in the land records are contestable, that the revenue records are not documents of title, and that it is permissible to challenge the entries for determining the title to land.

The ambiguity of agrarian law regarding records of land rights is particularly harmful to the poor, who cannot afford protracted land disputes. Numerous legal disputes are caused by contract enforcement of land rental contracts, e.g. over illegal possession of land, eviction of tenants, and recovery of rent. Cases of land disputes are either heard in the Revenue Courts or Civil Courts. In general, smallholders and tenants tend to prefer to use the Revenue Courts, because they are cheaper, more accessible, and less time-consuming. However, there is a widespread perception that decisions of Revenue Courts are often biased in favor of large and powerful landowners.

The institutional set-up of the land recording system in Punjab Province is also very opaque, involving many different agencies. The main ones are the Board of Revenue (BOR), the Excise and Taxation Department (ETD), and the development authorities, of which the main one is the Lahore Development Authority (LDA). However, there is no single agency maintaining updated land records for all of Punjab, and the coordination in record keeping functions being carried out by the various agencies is limited. Within this complicated institutional structure, the BOR is the most important agency for land administration. Nevertheless, it is important to note that the BOR essentially is a body geared to collect land revenue for the Government. Over the years, the revenue collection role has become secondary to the BOR’s role of being the custodian of the records of rights to land, but, inconsistently, the business processes of the organization are still directed to its traditional role.

The BOR’s land record maintenance takes place through an intricate system, which involves several levels of administration; the district, tehsil, kanungo circle, and patwar circle (see Annex 1). At the lowest administrative level of the records system – the Patwar Circle – are the Patwaris. They are not only responsible for land record issues, but also for many social, political, and administrative tasks, including keeping weather records, collecting crop harvest information, reporting of village crimes, and updating registers of voters. In Pakistan, about 14,000 Patwaris maintain around 190 million land records pertaining to 50 million land owners. The Patwaris keep their records in a cloth bag called a Basta. They are the custodians of records pertaining to private as well as government lands. The transfer of land is initiated at the level of the Patwari, but affected by his superiors at the kanungo and tehsil levels.

The overall supervisor of the land revenue system at District level is the District Officer Revenue/registrar. At this level, the officer reports to a double hierarchy, the Board of Revenue (Senior Member BOR) on one hand, and the District level government on the other (District Coordination Officer, namely the administrative head of the District), himself reporting to the elected head (Nazim).

Making land rights secure, reducing the potential for disputes and enabling an improved investment climate are urgent tasks for the BOR and have been prioritized at the highest levels of the GoPunjab for the entire Province. Over the long-term the Government intends to move to a title-based system of land registration which will be parcel based and link text and spatial data effectively. This will entail significant institutional, legal and policy changes, as well as investment in human resource development, information systems, and improvement in the available data bases on land. As a key first phase in this long-term program, the Government is focusing on modernization of the land records system. While the proposed program aims at having a rural-urban focus due to the nature of the issues to be addressed, the development of an urban component would be gradual due to the current complex and dispersed institutional setting[1].

While computerization will be an important technical element of the strategy for the program, the focus needs to be squarely on improved service delivery to the population, with computerization as a tool to that end, but neither a sufficient condition for achieving that end nor an end in itself. More important than the ICT elements will be the changes in business processes and associated changes in the legal and regulatory framework, human resource development of staff responsible for service delivery, and public outreach programs to stakeholders and the general population.

The initial phase of the program, which is covered by the proposed LRMIS Project, will focus on the land records system of the BOR by putting in place a reliable, efficient, and transparent system for maintaining those records and providing access to those records for the population. Also during the first phase, linkages will be tested and proven between the land records system and the system of registration of deeds, and piloting of digitization of spatial records will be carried out. As such, the first phase will introduce some key initial changes in the regulatory and institutional framework, and set the stage for the roll-out of more substantial changes in the next phase. Two key features of the Government’s strategy in the first phase are (i) learning by doing before scaling up (the Punjab Land Records Program includes a number of pilot initiatives[2] to be closely monitored before rolling out to a broader scale); and (ii) ensuring availability of services at the Kanungoi level, easing access to the population.

In urban areas – where the weaknesses in the registration of land rights are the result of fragmented institutional responsibilities, poor reliability of spatial data, little accountability and cumbersome processes – the GoPunjab is also embarked in a number of actions aimed at improving the existing structure of property documentation, automation of the deed system and simplification and standardization of mortgage documents. The GoPunjab has agreed to the need to incorporate the ongoing modernization of the deeds registration system (registries offices) with modernization of the land revenue records system. The Government will pursue linkages between the Land Records Program and other initiatives with bearing on immovable property, such as the Punjab Municipal Services Delivery Project and the Administrative Barriers Study being carried out by FIAS.

  1. Objectives

The objective of the Project is to improve the land records service delivery of the Province of Punjab, contributing to long-lasting tenure security and more efficient functioning of land markets, and to establish a basis for fuller integration of information associated with rights in land.

  1. Rationale for Bank Involvement

The importance of this program for institutional development, poverty reduction and investment climate (e.g. by unlocking the economic benefit of clear land rights) – all in line with the Country Assistance Strategy (CAS) – is not in doubt. The issue of the opaqueness and insecurity of land records in Pakistan and its repercussions on market and non-market based transactions have been extensively noted in almost every study and AAA done in Pakistan by the Bank[3] and other donors. In addition, land registration has also been identified by the PRSP as one of the key constraints to effective services’ delivery.

Given the nature of the proposed program, the Bank is expected not only to mobilize financial resources, but also to provide sound technical assistance and policy advice, using its international experience and specialized skills to address system-wide issues. It is expected that the Bank’s support would include assistance for legal and policy reforms that may be required.

The proposed project would build on the experience gained from the implementation of ongoing pilot projects in Punjab[4] and from similar experiences in the Region (e.g. the Karnataka Computerization Program and the Thailand Land Titling Program) as well as from other regions. Lessons learnt from such programs leave the Bank well-positioned to respond to GoPunjab’s request for support to a comprehensive program that not only integrates and systematizes the various ongoing pilot initiatives under a common framework, but also ensures (a) technical and operational consistency, (b) improved and standardized policy, legal and operational frameworks; (c) capacity building at all levels; and (d) focus on providing quality services.

  1. Description

The approach followed in the design of the proposed PP-LRMIS encompasses four main actions: (i) setting the foundations of a modernized, more accessible and conclusive land records system by generating and strengthening the capacity of relevant entities to effectively manage and administer such a system; (ii) developing and deploying an accountability-prone land records system and all other pre-service delivery tasks; (iii) providing cost-effective land records services at all levels, including operations and maintenance of the LRMIS, with the objective of managing, operating, and making accessible timely land-related information; and (iv) monitoring the quality and efficiency of the services provided, and assessing its impacts. The four components identified and described below follow this approach and sequencing.

Component 1: Business Process Improvement and Institutional Capacity Enhancement

This component would ensure introduction of appropriate business process changes consistent with the Project’s development objective of improved quality of services and strengthen the capacity of the entities involved to effectively manage and administer the modernized land records system. Subcomponents are:

·  Institutional Capacity Enhancement: This sub-component will provide training programs to staff involved in service delivery to the population and in other aspects of project implementation. Training programs will cover the overall project rationale and design, business processes, the roles of the respective administrative levels and organizations in project implementation, and more detailed background on roles and responsibilities for particular staffing positions. Specialized training in ICT elements will be provided to relevant staff. A preliminary business model for operation of the Service Centers to be established under the Project will be discussed at Appraisal. This sub-component will undertake further elaboration of the model based on actual experience with start up and operation of the Centers. This analysis will identify appropriate changes in the fee structure, staffing levels and functions, information flows, and management arrangements. As part of the business model elaboration, the use of Public Private Partnerships (PPPs) will be developed and tested early in project implementation and the results of that testing will be built into the detailed design of subsequent phases of roll-out of the automated systems under Component 2.