January 10, 2008	Thursday	Zilhaj 30, 1428

ISLAMABAD, Jan 9: The chairman of the Capital Development Authority (CDA), Kamran Lashari, is stated to be in hot water after the authority took action against a firm backed by top government functionaries for violating terms and condition of Rs1.4 billion auction of a five-star hotel plot and failing to pay both the premium and remaining cost of the land within the stipulated time.

However, the firm - SGM - continued to default on the payment using its influence, making the CDA helpless to take further action against it.

Following the serving of notice by the authority, its chairman was summoned to the Prime Minister’s Secretariat and was grilled for being strict against the firm. He was also asked to stop further proceedings against the company, sources said.

The SGM participated in the bidding of an auction of a 3.73 acre plot beside Marriott Hotel on July 31, 2007. The firm won the auction by offering the highest bid of Rs1.4 billion at the rate of Rs77,000 per square yard. According to the terms and condition, the firm was to pay 25 per cent of the cost (premium) amounting to Rs340 million within 15 days from the date of the auction and the remaining in three months (by November 18) since the issuance of the offer letter on August 18.

Sources said a Meezan Bank cheque (No-0022876) for Rs340 million dated October 2 given by the firm to the CDA was bounced due to several reasons. In this connection, the bank issued a letter to the CDA on November 6, informing it that the cheque deposited by the authority could not be cashed due to unavailability of funds in the account, wrong signature of the account holder and absence of the company’s stamp on it.

The owner of the firm, Fahad Malik, is stated to be a close relative of caretaker prime minister Mohammedmian Soomro and environment minister Wajid Bokhari. Mr Malik is also contesting election from a National Assembly seat in Jaccobabad.

When contacted, the CDA chairman confirmed that the authority had served notice on the firm for nonpayment of the cost of land and said no pressure would be borne to stop further action against the firm.

The CDA chief, however, said: “No one from the government has so far asked me to be lenient with the firm.”

He said according to the terms and condition of the auction and CDA’s auction policy, the plot could be handed over to the second highest bidder.

The chief executive of the SGM, Fahad Malik, said there was no payment dispute between the authority and his firm. He, however, said he had asked the CDA to revise the payment schedule and give more time to the firm for the payment, adding some of the builders of other under-construction five-star hotels in Islamabad had been given even 15 years time for the payment. “It is unfair that we are being asked to pay the total cost of land in three months while others have been given 15 years for such a payment,” he added.

He denied that the cheque for Rs340 million premium of the land submitted by the company had bounced.

Mr Malik said the firm had no financial constraints and the reason for delay in execution of the project was the shattering of confidence of Middle East-based investors due to prevailing political crisis in the country. He, however, said the project would be commissioned after the forthcoming elections.

He said Askari Bank had also provided Rs2.5 billion loan facility to the firm for the construction of the hotel.