The Public Accounts Committee (PAC) on Wednesday adopted a report pertaining to the revival of the lease agreement of the multi-storey under-construction building for the Grand Hyatt Hotel at One Constitution Avenue between the Capital Development Authority (CDA) and the BNP (Pvt) Limited.
The PAC endorsed Rs17.5 billion settlement between the CDA and the BNP though it was not on the agenda of the meeting.
PAC Chairman Rana Tanveer got it approved within minutes after it was presented before the committee, saying that the builder of the hotel, Abdul Hafeez Pasha, should be allowed to pay instalments as per decision of the Supreme Court.
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On July 1, 2016, the CDA had sealed the under-construction hotel for various building and layout plan violations, including building residential apartments instead of a five-star hotel. The officials had maintained that the developer created third-party interest without adhering to the CDA bye-laws.
On July 29, 2016, the CDA had cancelled the 99-year lease for the 13.45-acre plot, located adjacent to the Convention Centre, which was handed over to the BNP group through auction on March 9, 2005.
The Islamabad High Court (IHC) had upheld the decision back then; however, the Supreme Court had restored the lease last year with directions to the owner to pay Rs17.5 billion to the government against its lease in instalments.
In the IHC judgment, the court had noted that it was beyond comprehension for overseas purchasers that such a high-visibility under-construction project, which was in full view of the Presidency, Prime Minister Secretariat, judiciary and all the country’s top political and administrative decision-makers, could possibly be illegal.
Some 79 overseas Pakistanis and their families, who invested in the project, had earlier expressed that the decision of cancelling the lease “has shattered the confidence of overseas Pakistanis in investing in their homeland.”
During the PAC meeting, PML-N Senator Mushahid Hussain Sayed drew the chair’s attention towards the first instalment date, which was December 31, 2021. Tanveer, however, was of the view that the matter has long been discussed and it should now be allowed to move ahead. The other members also gave their consent and moved to other agenda items.
On October 7, the PAC chairman had pointed out that since the National Accountability Bureau (NAB) had clarified that pendency of proceedings before NAB did not bar the Capital Development Authority (CDA) to act according to the law and since no direction was given by NAB to CDA to stop its proceedings, the CDA was at liberty to proceed as per directions of the Supreme Court.
It was decided that both the CDA and the developer should implement the judgment of the Supreme Court and might execute a letter of re-adjustment to give effect to the decision if reviewed subsequently by the apex court.
“It was further directed by the PAC that directives in compliance of august Supreme Court of Pakistan decision be implemented without “ifs” and “buts”, a CDA letter read, saying that a meeting between the builder and the CDA was held on November 3 and it was decided that decision of the apex court be implemented in letter and spirit, subject to final outcome of the review petition filed by both the parties.
It further said that the builder has agreed to give a payment schedule of the outstanding amounts as the apex court’s decision of January 9, 2019; with the condition that time limit determined by the top court will not be extended.
As per the payment schedule, the developer will pay a total of six instalments of Rs2,916,666,667 on December 31 every year, starting from next year till 2026 and deposit 17.5 billion – Rs1,227,352, 500 has already been paid out of the total amount.
After adopting the report, the PAC examined the audit reports of the Petroleum Division and Oil and Gas Regulatory Authority (Ogra) for the year 2019-20. During the discussion, Tanveer suggested that the division should develop a mechanism where the government departments could hire renowned lawyers so that the defaulters do no simply go to the court; get stay and keep the cases pending for years.
Among other things, the petroleum secretary informed the committee that the petroleum division has given a presentation to the Prime Minister, suggesting that the variation in the prices of local gas and the RLNG be adjusted as it would help reducing gas prices.
At one point, PPP’s Sherry Rehman said that the officials were only presenting problems instead of presenting solutions. The chair, subsequently, suggested the officials to focus on the problems being faced by the consumers and address the acute shortage of gas in the winter season.
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