Investors await project completion

ISLAMABAD:

Amid hue and cry from investors, the management of Creek Marina project has announced that construction work is going on at full steam with finishing, electro-mechanical and facade work starting soon.

“The best lifts (Schindler), European facade system and Spanish marble have all been ordered and contracts signed,” it said.

People who had been allotted residences in the Creek Marina project allege that developer Meinhardt Singapore Pte Limited (MSPL) has failed to finish the project even after a passage of 18 years.

Families claim that they have paid billions of rupees for building housing units on the Arabian Sea shores in Karachi’s Defence Housing Authority (DHA).

The multi-storey luxury residential project had been launched in 2005 in DHA Phase 8 but the Singaporean developers could not so far deliver even a single flat to the investors.

The Public Accounts Committee (PAC) chairman, in a letter to the Federal Investigation Agency (FIA) director general, said that the Singapore-based company developing the project should be included in blacklist if it was found involved in irregularities. The FIA is conducting an inquiry.

Earlier, the aggrieved investors approached the PAC chairman, asking him to take action against the company which they claimed had pocketed billions of rupees from customers but could not complete the project.

In a letter to the PAC chairman, they alleged that the Singaporean firm was involved in money laundering as all their money had been taken to Singapore.

“As of today, nearly 300 allottees are affected by the failure of Shehzad Nasim (CEO of the Singaporean firm) and his cohorts in delivering the Creek Marina project. It is estimated that over Rs3 billion of public money has been misappropriated or siphoned off by Shehzad Nasim,” the letter said.

“More pertinent is that DHA has allotted land worth several billion rupees to Shezhad Nasim and such land has become overridden with controversy.”

These investors also appealed to the army chief to take action against the fraud. Besides, they urged the government and the DHA to audit the financial accounts of Creek Marina project and its affiliates.

They claimed that the MSPL management demanded extra money from them. Investors were being threatened with cancellation of their bookings should they not pay escalation amounts that were never agreed to, they said.

They also alleged that the MSPL management was trying to discredit some of their colleagues by portraying them as members of the so-called “land mafia”.

When contacted, company CEO Shehzad Nasim recalled that an agreement was signed with DHA in September 2004. Land lease was signed in May 2005 and the design commenced immediately on a fast-track basis.

Piling contractor was mobilised in early 2006 and piling for the entire project was substantially completed in 2007.

In order to complete the project quickly, he said, Chinese contractor GOCG was mobilised and awarded the contract in 2007 to complete the entire project in 48 months. “Due to the security situation then, GOCG was unable to mobilise the 500 Chinese workers they had intended and decided to leave the project in 2008, with some substructure work done.”

“It took us three years to recover our bank guarantees (advance payments, etc) due to being embroiled in court cases, as GOCG managed to get a stay order to delay the matters,” he said.

As soon as the guarantees were released and work started, “our accounts were frozen making it impossible to continue construction”. The matter was proceeding in courts for 10 years and favourable orders were obtained. It was only in June 2020 when a new Escrow agreement was signed that the accounts were made operational.

He pointed out that the Covid pandemic hit the world in early 2020 and lasted until the end of 2022 – almost three years. “All projects in the world have been given three-year extension as this pandemic effectively stopped construction due to lockdowns and supply-chain disruptions which have still not been fully restored.”

He said that in between at the behest of some customers and other stakeholders, a NAB inquiry was also initiated on similar absurd charges. After favourable orders of the high court and many years of inquiry, NAB was unable to find any wrongdoing and “we were cleared in 2021”.

Despite all the aforementioned hurdles, “we have been able to complete the foundation piling for the entire project, complete the super structure for three towers, associated car park, site office, show flats and the boundary wall”. The latter two are being redone for permanent condition.

He called the claim baseless that Rs3 billion had been siphoned off by the company. “All our customers’ money comes into an Escrow account controlled by DHA, so how could money be taken away?”

Most importantly, the CEO said, the total amount of money received from the customers to date was Rs3.5 billion and “if we have taken away Rs3 billion, who paid for all the works we have described?”

He added that the project cost to date was more than double the money received from the customers. “This excludes all the design and project management, legal, travelling and other costs incurred overseas and never charged to the project.”

Published in The Express Tribune, September 5^th, 2023.

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