Plot auction: Revenue generated ‘disappointing’

ISLAMABAD: The cash-strapped Capital Development Authority (CDA) did not get the desired results from a two-day open auction of commercial and residential plots in Islamabad that concluded on Wednesday.

CDA generated Rs1.53 billion in the auctions, against a projected revenue of Rs1.45 billion. On the surface it seems as if the civic body met its target. CDA financial advisor told The Express Tribune that the results of the auction were “more than satisfactory”.

However, insiders have a different story to tell. They say that the projected amount declared by CDA is always the absolute minimum that they expect to generate. As such money generated through the latest auction was “disappointing”.

An official inside CDA told The Express Tribune that the money generated through the sale of plots was not enough to pay the salaries of the staff for even three months.

The next step in the process involves the auction committee submitting its recommendations to the CDA Board, which then makes the final decision. In the current bid, CDA auctioned 16 residential plots for Rs246.1 million on Tuesday at Aabpara Community Centre in Islamabad. These plots were located in sectors F-11/1 and G-10/2.

On Wednesday, the second day of the auction, some 20 commercial plots were put up for sale. Only 13 of these were bid upon.

According to rules, the bidders have to pay 40 per cent of their winning bid within a week. The remaining 60 per cent will be paid in two equal instalments, over a period of three months. Moreover, four  per cent Capital Value Tax will be imposed on residential plots measuring over 500 square yards. If a successful bidder fails to pay the above-mentioned amount his deposited money will be confiscated.

CDA hopes to generate Rs11.5 billion through the sales of residential and commercial plots in 2010-11. This was the third such auction this year. In the previous two auctions, about 60 plots were auctioned. About 30 of these auctions were rejected by the CDA Board due to low bidding price.

The auction committee was headed by CDA Member Finance Saeedur Rehman, Member Estate SM Farooqi, Member Engineering, Planning & Design Abdul Jabbar Malano and Directors of Public Relations, Estate Management-I, Estate Management-II and One Window Operation Directorates.

Published in The Express Tribune, December 30^th, 2010.