ISLAMABAD, Sept 5: The Karachi Port Trust (KPT) has leased out 881 acres prime sea-front land to the Defence Housing Authority at a throwaway price.

Minister for Ports and Shipping Qamar Zaman Kaira told Senate in a written reply on Thursday that the land had been given to the DHA on a 99-year lease at a premium of Rs2.5 per square metre and an annual rent of 18 paisa per square metre. The DHA will pay Rs8.913 million as premium and Rs641,758 as ground rent and the land will be used for developing residential, commercial and recreational facilities.

The minister said the market price was not considered to be applicable because the KPT and DHA were government organisations.

An official told Dawn that the land was occupied by the DHA and the lease deed only formalised the arrangement when “litigation proved futile”.

Under the terms of the lease, the DHA will also pay a one-time sub-lease charges amounting to five per cent of the premium.

The DHA will give KPT officers recommended by the latter’s management membership of the DHA-II with the right to allotment of plots and accommodate KPT’s share of three per cent of the 881-acre land that comes to 127,900 square yards or 324 plots.

The lessee (DHA) will be at liberty to sub-lease and allot plots to its members and the sub-lessees will have the right to make additional construction in accordance with the plan approved by the DHA and other agencies.

Under the terms of the agreement, natural creeks and circulation of seawater will be maintained “with proper level and gradients in accordance with the requirements of the harbour regime and the lessee and the sub-lessees will not dispose of any untreated sewage directly into creeks”.

It may be mentioned that successive KPT chairmenhad so far refused to endorse the deal and give up the trust’s claim over the land because of its questionable clauses.

KPT officials claim that the DHA had encroached on the 881 acres of its land in 1975-76. The matter was finally settled in August 2007 with the KPT leasing the land along the seashore in eastern backwaters to the DHA.