Audit report cites corruption in CDA

Zahid Gishkori April 17, 2010

ISLAMABAD: The Public Accounts Committee (PAC) has summoned an emergency meeting to investigate an audit report that revealed financial irregularities within the Capital Development Authority (CDA).

Auditors have discovered unjustified expenditures and misuse of funds as well as senior officials being involved in nepotism, at a time when many ongoing projects have been put on hold because of a lack of funds.

Yasmeen Rehman, a senior PAC member, expressing concern over the report’s findings, said, “Senior CDA management will be summoned at the meeting and all the facts will be uncovered.” Rehman, a National Assembly member filling in for PAC Chairman Chaudhry Nisar Ali Khan, talking to The Express Tribune, added, “The CDA has always been involved in corruption, but this time record financial irregularities have been identified, which need to be investigated.”

Akhtar Niazi, a Public Relations Officer with the Auditor General of Pakistan, said auditors detected embezzlement amounting to more than Rs6.95 billion within the CDA. “Auditor General Tanvir Ali Agha had repeatedly asked CDA officials to hold departmental meetings to discuss the observations of the audit for the year 2008-09 but the Authority did not respond,” Niazi explained.

The CDA suffered a loss of Rs4.9 billion because a building plan for a five-star hotel was approved without obtaining a no-objection certificate (NOC) from the Civil Aviation Authority, without which the hotel cannot be constructed, he said, quoting the audit report. Giving details, Niazi said that according to the report, the Authority lost Rs3.46 billion by awarding contracts to favoured contractors.

“The CDA admitted to the auditing team that they had recovered around Rs500 million but only Rs4.93 million of that amount was produced,” he said. Quoting the report, Niazi explained that Rs2.7 billion was lost through unauthorised extension of commercial area, which benefited 28 private housing societies. Another Rs799 million was lost because of irregular allotment of land to the US embassy in Islamabad and Rs1.2 billion was declared as irregular investment in the stock exchange and various banks, Niazi said. Ramzan Sajjid, CDA spokesperson, said various paragraphs of the report will be discussed in the PAC meeting and it is possible that the auditors’ allegations against the Authority would be proved baseless. He said the report is not based on facts.

When asked about the record amount of money embezzled this year, he said, “I cannot say anything further as the management is not the same as it was in 2008.” Sajjid said, when asked about the five-star hotel issue, that negotiations were underway with the aviation authority and the CDA to resolve the matter as well as to deal with the huge monetary loss. Temor Asghar, a CAA official and Project Manager, when contacted about the CDA’s Grand Hyatt Hotel project, said he cannot say anything for certain.

However, the CDA will most likely lose more money as the project is being delayed because the NoC has not been obtained, he said. Imtiaz Inayat Elahi, CDA Chairman, was unavailable for comment despite repeated attempts to contact him.