The Capital Development Authority (CDA) has informed the Islamabad High Court (IHC) that lease of the multi-storey under-construction Grand Hyatt Hotel here at the Constitutional Avenue has been canceled.
CDA Secretary Board Asif Shahjahan apprised to the single judge bench of Justice Mohsin Akhtar Kayani that 99 year lease earlier awarded to the BNP (Private) Limited was cancelled due to violation of CDA rules. Violating CDA laws, property worth billions of rupees including 260 flats of the building were sold out by the hotel management, CDA counsel pleaded before the bench.
He further maintained that the petitioner had created third party interest without adhering to the CDA bye-laws. He said on July 1, the CDA had sealed the under-construction-multi-storey hotel for various building and layout plan violations. In the report submitted by the CDA before the court, it was revealed that the first bidding process for the five-star hotel was cancelled on August 2, 2004 while the CDA started the auction process afresh on September 28, 2004.
Interestingly, it said, certain changes were made in the terms and conditions of auction, including extension of original lease period from 33 years to 99 years, reduction in payment of initial bid money from 25 per cent to 15 per cent within 45 days and balance payment within 15 years instead of 120 days.
On March 9, 2005, CDA auctioned 13.5 acre plot to the BNP Group for Rs 4.88 billion. The CDA Board, however, handed over the possession of the plot in 2005 after receiving just Rs 800 million. The BNP has so far paid the CDA Rs 1.02 billion while the remaining Rs 3.85 billion is recoverable in installments until 2026.
A public account committee earlier noted that the BNP Group earned over Rs 3 billion as profit after selling residential units while the CDA had yet to receive even half of the total receivable sum.
The report said that BNP Group – comprising of Bismillah textiles (Pvt) Ltd, Niagara Mills (Pvt) Ltd, Paragon City (Pvt) Ltd and Belhasa International Company LLC) – was pre-qualified along with 06 others. It added that as per the BNP Group Memorandum of Understanding Lt. Gen (retired) Tauqir Zia was designated as the chief executive while Abdul Hafeez Sheikh as the contact person for liaison with CDA.
The report further said the BNP Group which participated in the bidding process and subsequently issued an offer letter did not sign the lease agreement with CDA. It added that CDA offered the plot to BNP Group but signed the lease agreement with another company called Elite Fashion, a subsidiary of Bismillah Textile, which was renamed as BNP (Private) Limited on May 2, 2005.
It was revealed in the report that the construction was to be carried out within a period of three years from the date of approval of the building plans, however, no construction was undertaken at site. On May 5, 2006, the petitioner applied to CDA for rescheduling of payment on the grounds that due to earthquake in October 2005 the project was put on standstill. Subsequently, the CDA Board approved the payment rescheduling on 16.08.2007.
The plans of the `Hotel Tower’ were approved for 02 to 47 storey(s), service apartments with the height of 710 feet for the hotel tower, however, the Civil Aviation Authority objected to the height of the building, so it was restricted it to 330 feet. The CDA reply said that the BNP made post bid changes as well as other gross illegalities, building plan violations, adding the petitioner had sold out the apartments without obtaining any approval from CDA.
It added that the petitioner has constructed 120 apartments (in each tower) in violation of the approved building plan which allowed only 60-service apartments in each tower. After going through the arguments the court adjourned further hearing of the case till August 3.