ISLAMABAD, Sept 28: The housing ministry has backed out of its promise made with the affected people of a fake Islamabad New City (INC) housing scheme to reimburse their money deposited with the National Housing Authority (NHA), a source in the housing and works ministry told Dawn on Sunday.

The source said that the ministry had earlier confessed that a sum of Rs300 million deposited with the NHA by people for getting plots in the scheme, was misappropriated by the officials of the authority.

However, with the induction of new the housing minister, Syed Safwanullah, the ministry had suddenly changed its stance and seemed to be reluctant to reimburse the money, the source added. The amount was reportedly deposited by some 3,000 people mostly retired government employees, the source said.

He said the project had two phases one was dealt by the NHA and the second by the Capital Development Authority (CDA).

The money deposited with the CDA had been reimbursed to the applicants. However, the NHA had no answer that where the amount was utilized.

The INC project was launched in 1996 and since then the people could not get their money reimbursed from the NHA. Total number of people applied in both phases of the project was stated to be over 5,000.

The money deposited with the CDA in the second phase was Rs162 million, which had been reimbursed.

Mr Safwanullah in a written reply of a question made by MNA Mian Mohammad Aslam MNA, on Sept 22, informed the National Assembly that the NHA had no financial involvement in the INC housing scheme.

He said in order to redress the grievances of affected people, Economic Coordination Committee (ECC) was approached to refund the deposits through an ex-gratia grant. However, the ECC rejected the proposal and advised the housing ministry to take up the matter with the National Accountability Bureau (NAB) for the recovery.

Despite the fact that the executing agencies M. G. Hertz and Asia Challenge Investment, had been dissolved, the housing minister held responsible both of them for embezzlement, the source said.

An official of the housing ministry said that earlier the ministry had demanded of the government to allocate over Rs200 million to it for the reimbursement of money to the affected people.

“This step was taken after a very long time, however, the finance ministry turned down the plea and the issue remained pending,” the official said.

The ministry, some months back, had also sent a summary to the Prime Minister’s Secretariat for seeking required funds, the official said. The summary, he said, had been vetted by the ministries of law and finance.

Now the housing ministry has suddenly changed its stance and claimed that the NHA was only a regulatory body, therefore it had nothing to do with the financial side the housing scheme.

Some of the affected people told Dawn that it would be unwise and counter productive on the part of the government to have two different disbursement policies in relation to the same project and a same scheme. “All the affected people deserved equal and judicial treatment,” they demanded.

They also demanded that the NAB should probe into the failure of the project to restore the confidence of people on government institutions and reimburse the rest of the amount.

Recently, a delegation of retired government servants who had lost their hard earned money in the INC scam met President Gen Pervez Musharraf and demanded early reimbursement of their money.