Budget 2017-18: CDA board approves Rs37.9 billion deficit budget

Civic body proposes building fee for private housing societies

ISLAMABAD: The board of the Capital Development Authority (CDA) on Friday approved a Rs37.9 billion deficit budget for the upcoming fiscal year 2017-18.

In a meeting held at the CDA Headquarters on Friday, the civic authority approved plans to spend around Rs37.97 billion. However, the body only plans to generate around Rs32.14 billion during the upcoming year, primarily from the auction of commercial and residential plots.

The CDA also hopes to receive some money from previous auctions.

Revenue

The civic authority expects to raise Rs9.5 billion through open auctions and prequalification of commercial plots located in the Blue Area. Moreover, it hopes to raise Rs8.9 billion in the form of receipts from previous auctions conducted by the estate management-II (EM-II).

Additionally, the authority plans to generate Rs4 billion by auctioning residential plots through the estate management-I (EM-I) by opening new sectors such as C-15 and C-16.

Overall, the outlay plan suggests that the CDA hopes to raise a total of Rs23.407 billion through auctions. However, it does not outline plans on how it would generate the remaining Rs8.733 billion.

The CDA has also proposed to levy a building fee on 50 private housing schemes which fall under the jurisdiction of the civic body and comprising around 60,000 units. The civic body plans to generate around Rs50 million from the move.

It aims to collect a further Rs50 million through transfer fees from high rise buildings comprising of at least 3,500 units.

It has also been proposed that rate of the property tax may be revised while the MPO and DMA may also increase their sources of revenue.

Expenses

The board has approved a plan which would see it spend Rs37.97 billion, three per cent more in the fiscal year 2017-18 as compared to the outgoing fiscal year of 2016-17.

Of this, the CDA plans to spend Rs21.188 billion, or 56 per cent of the budget, on development projects in the capital.

Priority development projects, the plan suggests, would receive Rs11.1 billion. These projects include the construction of the Bhara Kahu by-pass, development of sectors E-12, C-15 and I-15, construction of interchanges at Sohan and Khanna on the Islamabad Expressway, turning the Attaturk Avenue (Embassy Road) into a dual track carriageway, constructing an underpass on Faisal Avenue, construction of Khayaban-e-Margalla from GT Road to Sector D-12 and rehabilitation of the IJP Road.

CDA has allocated a further Rs5 billion to acquire land and compensate owners of land with built up property (BUP) in different sectors. Separately, Rs250million will be used to refund allottees of Sector I-15.

In addition, the CDA has set aside a chunk of Rs200 million for debt servicing of the Khanpur and Simly Dam. Moreover, Rs200 million have been set aside for repayment of the CDL’ interest.

The authority has also planned to spend Rs16.784 billion on non-development projects, accounting for 44 per cent of total expenditures envisioned in the budget outlay.

A break up shows that this year, again, the CDA has spared Rs5.999 billion for the Islamabad Metropolitan Corporation (IMC) to meet its non-developmental expenditures such as salaries of employees. The provision has been made on the request of IMC since the new Islamabad local government did not get the promised amount to meet its non-development expenditure from the federal government during last fiscal year.

Moreover, the authority has earmarked Rs300 million to pay tax to the Federal Board of Revenue (FBR). A further Rs150 million have been reserved for pay hikes, allowances and pensions of employees.

A sum of Rs200 million has been set aside for the expected increase in charges for utilities such as electricity, gas and telephone bills. An amount Rs100 million has been allocated for grants such as HBA and conveyance to CDA employees.

The budget would be sent to Capital Administration and Development Division (CADD) for final approval.

Published in The Express Tribune, June 10^th, 2017.