The federal audit authorities have unearthed a mega financial scandal in Karachi Port Trust (KPT), involving a loss of Rs 25 billion to the national exchequer, as it leased 380 acres of precious land in 1996 and 2006 to two housing societies for peanuts.
The audit report for the financial year 2009-10 on the accounts of the Ministry of Ports and Shipping showed that the abovementioned land was leased at a ground rent of 10 paisa/sq yard per annum for 99 years. The report, a copy of which is exclusively available with Pakistan Today, reveals that in 1996 and 2006, the KPT leased out the land to two housing societies: (i) 130 acres at Mai Kolachi Bypass Expressway connecting MT Khan Road to Khayaban-e-Roomi, KDA Scheme No-5 Clifton, to KPT Officers Co-operative Housing Society (ii) 250 acres at Hawks Bay Road to United Workers Front of KPT Co-operative Housing Society in order to sub-lease the plots to the employees of the KPT.
The objection raised by the auditors is that as per notification No SRO 307 (KE)/91 dated October 5, 1991 of the Ministry of Communications (Ports and Shipping Wing), the land was meant exclusively for convenience of shipping and cargo traffic, safety of vessels and improvement, maintenance and good governance of the KPT. Therefore, it could not be divested to other purposes. “The transaction resulted in a significant loss to the state. If the land had been sold at market rate, the KPT would have earned around Rs 25.84 billion as sale proceeds.”
“As per audit’s calculation, it is noted that the rate charged by the KPT on leasing out the land for 99 years comes to Rs 0.54 billion which is 2.09% of the approximate value of the said land,” says the report. The audit officials have also questioned the authority of the KPT’s Board of Trustees as its powers, under Section 29 of Karachi Port Trust Act, to lease out the land is relevant within the context of the duties relating to works, landing and shipping of goods, customs-wharves, erection of wharves, rates and others.
Therefore, the power enjoyed by the board, under Section 29A of the KPT Act, may not be seen as inclusive of the power to lease out land to housing societies. The federal auditors also pointed out that the KPT administration was not ready to provide related information even after it was directed on January 26 to produce the record examination till finalisation of the report.
The audit report further says the Sindh government claims that the land in question is its property. “The KPT Officers Cooperative Housing Society had filed a suit No 735/2001 to get declaration that the title on land is of KPT and not of the Government of Sindh, which is pending before Sindh High Court.”
