Credibility of municipal bonds questioned

Published: December 1, 2010
Inquiry into NLC scam, fake allotments in Kuri Model Village project puts CDA Municipal Bonds Scheme at risk

Inquiry into NLC scam, fake allotments in Kuri Model Village project puts CDA Municipal Bonds Scheme at risk

ISLAMABAD: An inquiry into the National Logistic Cell (NLC) scam and fake allotments in the Kuri Model Village project has put the Capital Development Authority’s (CDA) Municipal Bonds Scheme at risk.

Sources inside the civic authority told The Express Tribune that these fresh scams shattered the confidence of investors and put the credibility of the scheme at stake.

CDA Finance Advisor Saeedur Rehman, who was also Finance Advisor in NLC in 2004, came up with the idea of the municipal bonds scheme and is allegedly involved in the NLC scam.

However, CDA Chairman Imtiaz Inayat Elahi wants an extension in Rehman’s tenure as Finance Advisor. He said that this was “necessary” to achieve desired results form municipal bonds and other related schemes that were initiated by the advisor.

But despite Elahi’s efforts, the prime minister has not approved the extension summary.

On the other hand, the Establishment Division issued a notification that until further orders, the finance advisor could continue his work.

Saeedur Rehman confirmed that an inquiry against him was underway but added that this was an old issue.

The same advisor was supposed to ensure transparency of the Kuri Model Village project, where allegations of a fake allotment scam have surfaced.

Insiders claimed that the Director Land of CDA did not have the authority to allot land in the model village but this was done in light of the CDA Board’s directions. An inquiry against the Director Land’s alleged role is underway by CDA and FIA teams.

“Director Land was only authorised to sign the files for further procedure; the decision making authority was the CDA Board who approved fake allotments in agro farms and nurseries,” an official added.

There were even reports in the media that the director had gone missing, but CDA chairman denied this, adding that confusion was created because the official had not informed his senior where he was posted. He also rejected that there was any fake allotment scam in his notice.

CDA is the first civic body in the country to launch a municipal bond scheme to generate funds. The authority already owes huge debts to contractors and has taken expensive loans from the bank.

It had planned to take Rs 3 billion in loan at a mark-up rate of Rs500 million per month, with financial assistance being provided by Habib Bank, Standard Chartered and United Bank Limited.

Published in The Express Tribune, December 1st, 2010.

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