Heads won’t roll: CDA to hire private firm to fix costing problems, but won’t punish culprits

Past failings of costing dept behind move, CDA member says contractor to work hand-in-hand with in-house team.


Danish Hussain November 24, 2014

ISLAMABAD: City managers have decided to hire the services of a private evaluator for land value assessment in a bid to overcome issues borne of unrealistic price estimates for plot auctions prepared by the authority’s finance wing.

In a recent meeting, the CDA board approved the move and directed officials to initiate the selection process.



Initially, an expression of interest would be sought from interested firms through an advertisement, said CDA Finance Member Arbab Sher Bahadur. He added that the hiring process could take two months.

Curiously, he disagreed when asked if the hiring of an external contractor suggested that the authority’s in-house costing department was underperforming.

The officials deputed at costing department of the CDA, which works under administrative control of authority’s finance wing, belong to the finance, audit and accounts cadre of the CDA. Currently, one cost accountant, two assistant cost accountants, and other low-cadre employees are working in the costing section, which works in collaboration with the CDA statistics department.

Arbab said hiring a private firm did not mean that the CDA’s costing department would be closed or downsized. “The CDA costing wing and the private firm will work side-by-side,” he said, adding that final costing would be determined based on input from both sides.

According to sources, the decision was taken following criticism of the reevaluated prices of new plots at Park Enclave, which are scheduled to be offered on the open market in the next month.

The costing department estimated the cost of a 500 square-yard plot in the housing society at around Rs23 million. However, the estimate was not approved by senior CDA officials as the current market price of similar plots in the scheme varies between Rs17 million and Rs19 million.

“In my opinion, Rs23 million is a reasonable price and is based on current market value,” Bahadur told The Express Tribune just a few days ago when asked about the variance.



But now, he said that price of a plot would be lower than Rs20 million.

Inflated land value estimates are not new at the civic body, as the costing department has given several high numbers in the past which caused the related auctions to fail.

Almost a year ago, the costing department worked out the prices of plots in sectors D-12 and E-12 at higher-than-market rates. The subsequent land auction used the department’s estimates to set the reserve prices. Plots of 500 square yards in D-12 and E-12 were priced at Rs31.35 million and Rs23.5 million respectively, while the market prices were below Rs27 million and Rs18 million at the time.

The bids offered were nowhere near the reserve prices and consequently, the whole exercise was an abject failure. The authority even initiated an inquiry against the officials who had suggested the high prices while ignoring real estate market trends.

CDA spokesperson Asim Khichi said that hiring a private firm would also ensure transparency in the financial affairs of the authority.

Published in The Express Tribune, November 25th, 2014.

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