CNG and petrol stations not paying rent

LAHORE: Compressed Natural Gas (CNG) stations and petrol pumps established on leased state land have not been paying rent and Punjab is facing losses worth more than Rs1 billion per year. The provincial exchequer has been facing these losses annually as 200 out of 287 petrol pumps and CNG stations, which are established on leased state land, belong to influential owners.

The remaining owners are paying nominal rent and lease money because the lease agreement has not been reviewed during the last 15 years owing to mala fide intentions of government officials.

During a survey, it was revealed that 30 out of 81 petrol pumps and CNG stations established on state land in Lahore were operating illegally without paying a single rupee as either rent or lease money.

The revenue from the leases could be increased to Rs2 billion if all the leases were renewed, said Chairman Punjab Privatisation Board (PPB), Nazar Muhammad Cohan. He explained that the government was currently receiving about Rs250 million from all the sites.

He said the government should get possession of all illegally occupied land for fresh leases to interested parties. Cohan said PPB would execute the task despite facing some bottlenecks in the privatisation of these sites.

Out of total 287 leased sites, lease period of 81 had expired and owners were operating illegally whereas 64 lessees went into litigation for extension of the lease period on agreed amount which was 100 times below the market rate, an official said.

The Punjab Board of Revenue issued its last policy instructions for lease of government land to petrol pumps and CNG stations in July 2001 but the old leases were not revisited to make them at par with market forces.

Already registered lessees were given the option of purchasing land through sale by private treaty. The lessees gave a poor response to the offer as majority were not paying rent and lease money in connivance with government officials.

Over this poor response on the part of stakeholders, the Punjab government imposed a ban on sale of land by private treaty in March 2010. Because of this, a ban on the grant of leases of state land for the construction of petrol pumps and CNG stations was imposed by the Punjab Government.

The Punjab Privatisation Board (PPB) was asked to conduct the survey of the sites causing loss of billions to the public exchequer for transparent re-auction of all such leases by Chief Minister Shahbaz Sharif.

Out of 81 petrol pumps and CNG stations in Lahore, 19 were established on land of the provincial highway authority, 14 on the defunct Municipal Corporation Lahore’s land, 11 on Nazul Land, 28 on the Lahore Development Authority’s land and nine on Cantonment Board Land.

Some of these pumps and CNG station owners were paying Rs2,400 per kanal annually as rent to the government. These pumps and CNG stations were in prime localities of the city.

As the PPB initiated home work for the fresh lease of these sites in the province, the Board of Revenue, the custodian of land, started an effort to formulate a new policy for lease of state land to petrol pumps and CNG stations.

Published in The Express Tribune, August 15^th, 2010.