Bad investment?: Creek Marina still a dream as developers, DHA stuck in deadlock
Over 250 families invested Rs3 billion into the project that is five years past its deadline.
Creek Marina brochures boasted eight 24-storey towers, with three and four bedrooms. PHOTO: FILE
KARACHI:
Real estate is a prime commodity in Karachi. With big fish involved in the game, it is usually the smaller investors who suffer the agony of losing out on what appear to be lucrative deals.
The investors of the Creek Marina project learnt this lesson the hard way - having put over Rs3 billion into a project that has been in limbo for more than five years past its original deadline. The money belonged to over 250 families who had invested in the project when it was launched in 2005.
At a press conference on Thursday, members of the Creek Marina Action Committee revealed the problems they have been facing in realising their dream. The committee comprises 100 of the 250 buyers. Their aim is to pressurise both the parties into reaching an agreement so that the project can be finalised. The president of the committee, Yousuf Mirza, was the only person who spoke on the occasion. The others have been silenced by an injunction against them by the Sindh High Court (SHC).
In 2010, construction came to a complete halt. CPML officials claimed that the Chinese construction company had backed out because of threats to their workers’ lives. The company had been bound by a performance bond of Rs1 billion. With its forfeiture from the project, the bond was subsequently cashed and placed in a bank account. This amount is claimed by the developers, DHA and the buyers.
Meanwhile, some of the buyers formed the committee and decided to approach the DHA as well as the CPML for answers. Officials at the CPML kept changing while queries at the DHA office remained unheeded. The committee eventually learned that the project was master-minded by Dr Shahzad Nasim, the Singapore-based CEO of Meinhardt. Dr Nasim was the person who had originally signed the agreement with DHA at the project’s launch.
When the committee tried to contact Dr Nasim via email, they received a warning from his lawyer, asserting that he had no connection with the Creek Marina project and any further attempts to contact him would result in a defamation suit. This suit was eventually filed by him in the Sindh High Court (SHC), in which 15 of the committee’s members have been named.
In April 2011, the SHC ruled that the Rs1 billion from the Chinese company’s bond be released to the developers so that construction may resume. However, DHA sought and were granted a stay order against the funds, as they believed the funds may be misused or transferred out of the country. The SHC subsequently ruled that the funds be released in steps to the CPML, who will provide monthly budgets to the DHA for approval.
There were some signs of construction activity at the site for some time after this agreement but that too stopped soon enough. DHA was refusing to release funds to the CPML as it found discrepancies in the budget proposals.
The committee members subsequently met Dr Nasim in Dubai in May 2012, who said that the DHA officials were uncooperative. He agreed, however, to deliver the apartments within three years if the committee members cooperated with him to get the funds released.
DHA and Meinhardt have been deliberating the issue since, but neither side has been willing to budge from their stance. DHA has also registered an FIR for fraud against Dr Nasim and his company. Meanwhile, it is the buyers who have been the ultimate sufferers. “All we want is the product we paid for,” asserted Jaffer. He hoped that the two firms will reach a compromise soon and that the apartments will finally be finished - albeit 10 years after they paid for them.
The dream that was
The Creek Marina project was launched in the year 2005 and was advertised as a partnership between the Defence Housing Authority (DHA) and the developers, a consulting firm based in Singapore, named Meinhardt. Meinhardt set up a local company, Creek Marina Private Limited (CPML) to oversee the marketing and construction of the project.
“We put our trust in the DHA,” said Mirza. “There was also the reassuring factor that a reputable foreign firm was involved as the developer.”
The brochures described the project as a six-star housing scheme, boasting eight 24-storey towers with three and four bedroom apartments. It was located in the posh area of DHA phase VIII. The contracts for the construction were awarded to a Chinese firm, GOCG, and two local companies, the Principal Builders and Paragon.
The buyers were mandated to pay the amount in quarterly installments. The payments were, however, not progress-related. The project was to be completed by December 2009. Today, on the construction site, there stands an incomplete tower of 15 storeys, instead of the promised 24, and another tower of eight storeys.
Published in The Express Tribune, April 18th, 2014.
Real estate is a prime commodity in Karachi. With big fish involved in the game, it is usually the smaller investors who suffer the agony of losing out on what appear to be lucrative deals.
The investors of the Creek Marina project learnt this lesson the hard way - having put over Rs3 billion into a project that has been in limbo for more than five years past its original deadline. The money belonged to over 250 families who had invested in the project when it was launched in 2005.
At a press conference on Thursday, members of the Creek Marina Action Committee revealed the problems they have been facing in realising their dream. The committee comprises 100 of the 250 buyers. Their aim is to pressurise both the parties into reaching an agreement so that the project can be finalised. The president of the committee, Yousuf Mirza, was the only person who spoke on the occasion. The others have been silenced by an injunction against them by the Sindh High Court (SHC).
In 2010, construction came to a complete halt. CPML officials claimed that the Chinese construction company had backed out because of threats to their workers’ lives. The company had been bound by a performance bond of Rs1 billion. With its forfeiture from the project, the bond was subsequently cashed and placed in a bank account. This amount is claimed by the developers, DHA and the buyers.
Meanwhile, some of the buyers formed the committee and decided to approach the DHA as well as the CPML for answers. Officials at the CPML kept changing while queries at the DHA office remained unheeded. The committee eventually learned that the project was master-minded by Dr Shahzad Nasim, the Singapore-based CEO of Meinhardt. Dr Nasim was the person who had originally signed the agreement with DHA at the project’s launch.
When the committee tried to contact Dr Nasim via email, they received a warning from his lawyer, asserting that he had no connection with the Creek Marina project and any further attempts to contact him would result in a defamation suit. This suit was eventually filed by him in the Sindh High Court (SHC), in which 15 of the committee’s members have been named.
In April 2011, the SHC ruled that the Rs1 billion from the Chinese company’s bond be released to the developers so that construction may resume. However, DHA sought and were granted a stay order against the funds, as they believed the funds may be misused or transferred out of the country. The SHC subsequently ruled that the funds be released in steps to the CPML, who will provide monthly budgets to the DHA for approval.
There were some signs of construction activity at the site for some time after this agreement but that too stopped soon enough. DHA was refusing to release funds to the CPML as it found discrepancies in the budget proposals.
The committee members subsequently met Dr Nasim in Dubai in May 2012, who said that the DHA officials were uncooperative. He agreed, however, to deliver the apartments within three years if the committee members cooperated with him to get the funds released.
DHA and Meinhardt have been deliberating the issue since, but neither side has been willing to budge from their stance. DHA has also registered an FIR for fraud against Dr Nasim and his company. Meanwhile, it is the buyers who have been the ultimate sufferers. “All we want is the product we paid for,” asserted Jaffer. He hoped that the two firms will reach a compromise soon and that the apartments will finally be finished - albeit 10 years after they paid for them.
The dream that was
The Creek Marina project was launched in the year 2005 and was advertised as a partnership between the Defence Housing Authority (DHA) and the developers, a consulting firm based in Singapore, named Meinhardt. Meinhardt set up a local company, Creek Marina Private Limited (CPML) to oversee the marketing and construction of the project.
“We put our trust in the DHA,” said Mirza. “There was also the reassuring factor that a reputable foreign firm was involved as the developer.”
The brochures described the project as a six-star housing scheme, boasting eight 24-storey towers with three and four bedroom apartments. It was located in the posh area of DHA phase VIII. The contracts for the construction were awarded to a Chinese firm, GOCG, and two local companies, the Principal Builders and Paragon.
The buyers were mandated to pay the amount in quarterly installments. The payments were, however, not progress-related. The project was to be completed by December 2009. Today, on the construction site, there stands an incomplete tower of 15 storeys, instead of the promised 24, and another tower of eight storeys.
Published in The Express Tribune, April 18th, 2014.