ISLAMABAD, Oct 12: With few options to generate capital, the Capital Development Authority (CDA) is planning to dispose off some forty commercial plots situated in prime locations in the city.
Although the civic authority’s management has been talking at various forums to generate revenue and raise finances through other means including capital markets, even the basic requirements in this regard have not been met.
“We plan to generate finances through an asset management company and by launching bonds,” CDA Chairman Nadeem Hassan Asif recently told the Senate Standing Committee on Cabinet Division, assuring members that the civic body would reduce its financial reliance on the sale of plots.
However, the chairman was either not aware or did not bring forth the true picture in front of the senators. The CDA Ordinance 1960 does not allow the authority to get involved in public-private partnerships.
“Certain amendments in the CDA law are required before CDA bonds can be floated or other modes of raising finances through public investments can be introduced,” said a senior official of the civic body.
He said the authority was facing serious financial challenges to meet its routine expenses. These expenses totaled to Rs560 million per month, of which Rs400 million goes to salaries, Rs100 million to utility bills and Rs60 million to other expenses.
However, the CDA has not moved any summary in the Cabinet division for the required amendments in law which would allow the civic agency to raise capital through retail investors.
Therefore, the management continues to rely on the sale of plots as the main source of revenue, and in the latest move, it has decided to auction forty commercial plots and Class–III shopping centres.
These plots are located at prime locations in Markaz F-7, F-8, G-8, I-8, G-9, F-10, F-11, G-11 and I-11, and their auction is expected in the end of November. However, the CDA has yet to assess the net inflow from the sale of these plots.
“There is sufficient time to asses the estimated value of these plots, but that will not be made public so that interested buyers do not keep bids within that range only,” the official said.
The CDA chairman on Saturday held a final meeting with members of the authority in this regard, and was informed that all facilities at these proposed auction sites had been ensured.
The CDA decided that successful bidders would be treated as valued customers and they would be entertained through a special cell established to complete post-sale requirements.
Presiding over the meeting, the CDA chairman said all the post-sale formalities would be completed swiftly and successful bidders will not have to run from pillar to post to fulfill the requirements.
Although buying commercial plots looks like a lucrative offer for the business community, there is a chance that serious players would not enter the bidding process if the CDA is unable to control the continuous mushroom growth of businesses within residential areas.
“This is a serious issue in the city now. Apart from the F-6 markaz, we see low standard residential flats with the exterior of buildings giving dilapidated looks and the city managers unable to do anything,” said Shamim Kazmi, a resident of F-7 sector. “All the Class 1 businesses are shifting to residential areas,” he added.