Dubious agreements: CDA directed to halt work on Grand Hyatt

PAC finds multiple violations in contract for multi-storey towers; NAB, FIA to probe the deal.

ISLAMABAD:

The Public Accounts Committee (PAC) on Thursday directed the Capital Development Authority (CDA) to forcibly stop construction on multi-storey towers adjacent to the Jinnah Convention Centre after the committee found multiple violations of the terms of the contract.

Sensing a massive fraud of over Rs30 billion, PAC Chairman Syed Khurshid Shah referred the case to the National Accountability Bureau (NAB) and the Federal Investigation Agency (FIA) to probe and detect the real players behind the dubious deal.

PAC also ordered the CDA to obtain soil-testing report for the Grand Hyatt towers along Constitution Avenue from the Pakistan Engineering Council (PEC) as the contractor has built 23 storeys instead of the permitted 13.

The committee also sought action, by Friday, against the CDA officials who inked the deal with BNP group. They said a case should be registered against the then-CDA Estate member Rehman Gilani.

The PAC was told that BNP got possession of 13.5 acres after paying only 23 per cent of the total payable — Rs4.88 billion.

As per the agreement, the successful bidder had to pay 15 per cent in first 45 days and the rest in 15 instalments. BNP, however, had paid only Rs977 million and got possession of the plot in 2007.

A total of three towers were to be constructed, but the contractor managed to reschedule the deal in 2007 with the approval of the Economic Coordination Council (ECC).

BNP loaned Rs1.6288 billion from the Bank of Punjab (BOP) and did not pay back the loan. NAB Rawalpindi pursued the case and recovered Rs170 million before the contractor got a stay order from a high court.

Khurshid Shah said the contractor has already received Rs10 to 12 billion from the public as almost all of the flats have been sold.

Fresh bidding for Diplomatic Shuttle Service

The PAC also directed the civic agency to initiate fresh bidding to ensure a transparent contract award for the Diplomatic Shuttle Service, as blatant anomalies have been detected in the existing contract.

The PAC expressed astonishment that the contractor was paying only Rs44,000 per annum to the CDA for the shuttle service and leasing 4.5 acres. The committee directed the civic authority to recover an amount equivalent to the market value of the leased land from the contractor starting from 2008 as he is charging Rs200 per passenger while paying a meagre amount to the CDA.

The PAC also sought a report from NAB, questioning on what grounds the bureau had cleared the deal between the CDA and Mohammad Hussain, the Diplomatic Shuttle Service contractor.

The committee was informed that the seven-year shuttle service agreement was signed in 2008 and is extendable for another seven years after its completion in 2015.

The PAC was informed that the original files for the contract have gone missing. Surprisingly, the CDA initiated a probe into the lost file, and would go on to lose the inquiry report.

Khurshid Shah said it is a clear case of connivance of CDA employees and ordered the CDA to seal its record room while directing NAB and the FIA to probe the missing files case. The chairman also directed the CDA to issue show cause notices to the then-CDA board members and report to the PAC within a fortnight.

A three-member PAC subcommittee has been constituted to report how many people use the shuttle service every day and to file a report within a fortnight so that the exact earnings of the contractor could be estimated.

PAC member Junaid Anwaar Chaudhary observed that political interference had destroyed the civic agency. The PAC ordered the cabinet secretary to submit a restructuring plan for the CDA to the committee within three months.

‘Recover Centaurus dues in 30 days’

The PAC also directed the CDA to recover outstanding dues for land and construction of an additional 12 storeys sans any payment from Gulf Construction Company, the owner of Centaurus Shopping Mall, within thirty days.

The committee suggested that utility services for Centaurus Mall be disconnected in case of non-payment of dues. They said the facility should not be issued a completion report without recovering the outstanding amount.

The CDA was also directed to arrange structure assessment of Centaurus and report to the committee within a month. A report on the rescheduling of payments for Centaurus is due for submission on Monday.

Published in The Express Tribune, May 30^th, 2014.