Rs5b plot to be auctioned to ‘favoured’ company

Housing minister hastily calls for proposals for commercial development of govt land.

Express September 06, 2011


The ministry of housing and works has allegedly illegally transferred the largest commercial plot in Karachi, about three-and-a-quarter acres in area and valued at about Rs5 billion, to the Pakistan Housing Authority (PHA), and has, in haste, called expressions of interest to construct apartments and commercial units on the land in question.

Owned by the Public Works Department (PWD), a subsidiary of the ministry of housing and works, the plot is situated opposite Karachi Cantt railway station, on Fatima Jinnah Road.

An advertisement from the PHA appeared in newspapers on August 28, inviting construction companies to build apartments and commercial units on the plot.

In accordance with government rules, the PHA asked companies to submit their proposals within 15 days, following which, the authority would give the plot to the selected company on equity basis, meaning the contractor would not have to pay cash for the site and would instead become a partner with the government in the project.

The advertisement was published during Eid holidays for a date nine days after the end of the Eid break, an amount of time considered too short by many observers for any company to prepare an adequate proposal, leading many to assume that the sale of the property worth billions was pre-planned.

Suspicions about the land were furthered when PWD Chief Engineer South Attaul Haque was removed from his office shortly before the advertisement was published. He was replaced by Muhammad Sarwar Awan.

According to sources familiar with the situation, Attaul Haque had reportedly refused to hand over the plot to the PHA while Awan handed it over to the authority on August 25, just within two weeks after he took charge.

The plot has a history of being transferred between different government departments and even the subject of misappropriation scandals.

The land was originally owned by the religious affairs ministry until 1979, when then-President Ziaul Haq issued an order to sell the land. However, before being sold, it was handed over to the PWD in June 1982 with instructions to divide the land into four smaller plots and then sell them off in an open auction. For reasons that remain unclear, the land remained unsold.

In June 1996, the plot once again made news when it was discovered that a federal minister had tried to hand over the land to Asad Ali Kudawala, one of his associates.

Kudawala had produced forged documents claiming the land was his, and had the minister rule in his favour, before the embezzlement scandal was discovered and disclosed to the press, leading to the land remaining in PWD hands.

Federal Housing and Works Minister Faisal Saleh Hayat has now transferred the land from the PWD to the PHA and has begun soliciting proposals for the construction of commercial and residential buildings.

Yet the PHA’s mandate calls for building low-cost housing for government employees, not investing in commercial real estate investments.

The prime minister and the federal cabinet have reportedly not been taken into confidence by Hayat over this proposal.

Published in The Express Tribune, September 6th, 2011.