Capital reversal: Last-minute land use change haunting CDA

Plot changed from mixed use to residential a day before auction; bidder claims plans now unfeasible.

ISLAMABAD:

The Capital Development Authority may not be able to collect the Rs6.72 billion in bids it recently received in a commercial land auction.

A construction firm which offered the highest bid of Rs2.78 billion for a plot during auction held on April 2 and 3 has moved the court against the Capital Development Authority (CDA), alleging that the civic agency changed the ‘original’ land-use parameters for the said plot just a day before the scheduled auction’s proceedings.

The 11,750 square-yard plot in F-10 Markaz was presented for open auction on April 3. The highest bid was Rs2.78 billion.

The original planning parameters of the plot suggested that it would be mixed use — both commercial and residential. However, on April 1, the authority changed the status of plot from mixed-use to luxury apartments.

The CDA changed the status after a resident of an apartment building adjacent to the plot had challenged the original parameters.

The Islamabad High Court took up the case on April 1, and in a bid to avoid controversy right before the auction, the CDA assured the court that the plot would be auctioned as residential only.

“We offered the bid with the original layout in mind, and it was changed at the eleventh hour, which makes it difficult for us to get good returns on our investment,” said an official from the construction firm that offered the winning bid, while asking not to be named.

He said that two days after the auction, the CDA issued them a letter of acceptance. “In the letter, the authority said the plot is meant only for the construction of luxury apartments with floor area ratio for the plot at 1:4, maximum ground coverage of 40 per cent, and maximum height of 120 feet,” he said.

The CDA brochure for the auction, however, had different parameters for the plot, he said.

He argued that the new status of the plot was not clear to them at the time the bid was placed and under the new parameters, the project is has become unfeasible. At the same time, he expressed hope that the CDA would resolve the case in the greater interest of the authority and the investor.

During the two-day land auction, the CDA received bids totaling Rs6.72 billion against 24 commercial plots, mostly located in Margalla Town.

Published in The Express Tribune, April 15^th, 2014.