One Constitution Avenue controversy

  • Mistreating overseas Pakistanis

Pakistan is facing an economic crunch. The financial institutions are weak and the country is steeped in foreign debt. Whenever the nation faces trials and tribulations, its resilient population has risen to the occasion. It has tightened its belts and adopted austerity to weather the financial storms. Pakistan’s expatriate community has been at the forefront in contributing to the national cause. Whether it was the sanctions imposed after the 1965 and 1971 Pakistan-India wars or the 1998 era after the nuclear tests, when the Occident came down hard on Pakistan, 2005 massive earthquake or the deluge of 2010 and 2011, it has been the Pakistani diaspora, which came forward to support the country. During the current economic meltdown, which forced the financial wizards to seek debts from international institutions like the IMF and the World Bank, the expatriate community offered to bailout Pakistan from the crisis but the proposal was never accepted.

Whenever massive projects have been announced, the expatriate community has readily volunteered to participate even if had to bear step-motherly treatment and suffered financial losses. One such case is the One Constitution Avenue (OCA) project. Basically it was a plot measuring 13.45 acres adjacent to Convention Centre, on Constitution Avenue (now known as One Constitution Avenue), which was advertised by Capital Development Authority (“CDA”) for constructing a 5-star Hotel, service apartments and other allied facilities on 28 September 2004 for 99 year lease. 15pc of the bid amount was to be submitted within 45 days of acceptance of bid. The remaining 85pc of the bid amount was to be paid over a period of 15 years from the possession date which was 4 October 2006.

Open auction bidding took place on 09 March 2005. Seven parties including the BNP Group (a consortium of companies, which later incorporated the company known as “BNP (Private) Limited) pre-qualified. BNP Group was the highest at Rs75,000 per square yard and thus the successful bidder. The total price was Rs4.882 billion. It is noteworthy that the land for Serena Hotel was sold on 12 February 2005 (less than one month before this auction) at a price of Rs14,500 per square yard.

Almost 240 hardworking Pakistanis who are among the tax payers and overseas Pakistanis are suffering for the last two years because of the juggling between courts, NAB, FIA and government committees for the case of OCA in Islamabad

Calamity soon struck. BNP (Private) Limited was asked to hold design development due to the horrific earthquake in October 2005. The earthquake had a significant impact on Islamabad. Consequently, the building codes in Islamabad were revised by CDA and announced in 2007. No work could be commenced till then.

BNP (Private) Limited submitted an application with CDA for rescheduling the balance payment due to delays in the revision of building codes. CDA moved a summary in respect of rescheduling the payment plan (through Ministry of Interior) to the Economic Co-ordination Committee (“ECC”) for approval. On 26 February 2007 the CDA Board was directed by ECC to decide the matter of rescheduling the payment plan as they did in case of Centaurus Mall project. The rescheduling was approved by the CDA Board during its meeting held on 16 August 2007.

Consequently, BNP (Private) Limited submitted the revised building plans which were approved by CDA on 29 March 2008. The certificate of approval was issued to BNP (Private) Limited two months later. Construction on the site commenced at full pace with an agreed timeline for completion of structural works in 20 months. More trouble was ahead. Only six month after work commenced at the site, Civil Aviation Authority (“CAA”) raised objections to the height of the building i.e. 725 feet (as agreed and approved by the CDA). According to the terms and conditions of the lease deed, CDA was obliged to procure NOC(s) for the project from all agencies and/or authorities concerned. The construction works at site grinded to a complete halt. CDA, after wasting almost a year and a half, couldn’t resolve the issue. BNP (Private) Limited filed a lawsuit against CDA. After intervention by NAB’s Awareness and Prevention Wing, the parties reached an amicable settlement and it was agreed that the payment clause in the lease deed was to be further amended considering the huge financial and time loss. The height of the building was reduced from 45 storeys to 23 storeys. The payment period for balance amount was revised; no discount whatsoever was given to BNP. The settlement was approved by the CDA Board on 07 December 2012 and sanctified by the Islamabad High Court (IHC). The second amendment to the payment clause in the lease deed was made on 07 January 2013.

The Auditor General of Pakistan (“AGP”) in its audit report conducted for CDA for 2011-2012 raised objections and alleged that the rescheduling of payment was unauthorised. The audit objections were placed before the Public Accounts Committee (“PAC”). No intimation was given to BNP (Private) Limited of the proceedings before PAC. CDA directed BNP (Private) Limited to stop construction at the site till finalisation of the inquiry/payment of dues in accordance with the initial schedule/Agreement vide letter dated 05 August 2014. BNP (Private) Limited filed Writ Petition No.3755 of 2014 before IHC, which on 20 August 2014, was pleased to suspend the operation of the decision by PAC.

Apparently vested interests were placing impediments in the path of the OCA project. BNP (Private) Limited was informed that the project was a serious risk for VVIP movement in Islamabad and, therefore, either one part of the project was to be closed down or the entire project was to be acquired by the government or demolished. Repeated meetings with security agencies (IB and ISI) and CDA finally resolved this issue too.

More snags were in store; despite the PAC directives having been suspended by the IHC; NAB & FIA decided to reopen the inquiry and transferred the same to Lahore in December 2015. BNP (Private) Limited filed Writ Petition No. 32 of 2016 before the IHC against the proceedings of NAB and FIA. On 23 February 2016 IHC stayed the inquiry carried out by FIA.

On 03 March 2016, Writ Petition No.3755 of 2016 (Moved against CDA on PAC issue) was allowed by the IHC and the CDA Board was directed to convene a meeting and decide the matter independently, after giving BNP (Private) Limited a fair opportunity of hearing, and thereafter submit its reply to PAC so the relevant audit objection can be settled.

The said meeting was held by the CDA Board on 08 March 2016 and a Committee was constituted, in the absence of any representative of BNP (Private) Limited, to hear and decide the matter. The Committee, without issuing notice to BNP (Private) Limited, submitted its report to the CDA Board on 01 July 2016 directed that the project site be immediately sealed.

On 29 August 2016 the Board decided to unilaterally cancel the lease granted to BNP (Private) Limited on the basis of violations of building by-laws.

Almost 240 hardworking Pakistanis who are among the tax payers and overseas Pakistanis are suffering for the last two years because of the juggling between courts, NAB, FIA and government committees for the case of OCA in Islamabad.

There is finally light at the end of the tunnel and the long festering sore is set to heal. FIA has informed the National Assembly’s panel on Overseas Pakistanis and Human Resource that the OCA project in Islamabad is fair and corruption free.

NAB is probing the matter for the second time. In a recent meeting of sub-committee 4 of PAC, NAB informed the PAC sub-committee that NAB has discussed the timeline for submission of report in PAC with chairman NAB Justice (R) Javed Iqbal, who has agreed to finalise the report by mid May.