ISLAMABAD, April 30: Sitting on a treasure trove, the Capital Development Authority (CDA) has been throwing away public land for category conversion to private parties that made them billionaires.

However, the civic authority is on the verge of bankruptcy, struggling even to meet its core expenditure.

When a senior CDA official was asked why it was so, he explained: “The CDA is subservient to the government and the government is subservient to the private housing societies.”

It made sense when he explained how in the last 15 years the civic authority had not charged private housing societies the fees determined by market forces for converting agriculture or barren land into prime residential and commercial properties worth millions.

No clear answers were available as to why the more than 50 private housing societies, which have come up mostly within the last 10 years, had been exempted from the land conversion charges, especially when the fees were mandatory under the CDA by-laws.

“In both developed and developing countries, land conversion fees are a major source of revenue for civic authorities,” the official added on the condition of anonymity.

Elaborating on how the system worked, he explained how a private investor purchased 400 to 800 kanals of agriculture or barren land worth Rs50,000 to Rs1 million per kanal depending on the location.

He invested another Rs600,000 and Rs1 million depending on the quality of development - underground electric cables and gas connections to mention some of the facilities.

“And then, he sells that one kanal on more than 100 per cent profit roughly - Rs6 million and Rs7 million and above,” the official said, adding how the only source of revenue for the civic authority in converting the useless land into prime residential property was the meager Rs8,000 in scrutiny fees.

Most of the private housing societies approved by the CDA and issued no objection certificates in all the five zones have spread across thousands of kanals.

Spread on 836 kanals, the Bahria Enclave has nearly 600 residential plots. Paradise City in Sector F-17 is spread over 2,453 kanals and is selling 2,137 residential plots carved out of barren land.

Pakistan Medical Housing Society in E-11 spreads over 276 kanals and is selling 240 kanals of residential plots. Similarly, the Engineering Housing Scheme has 1,156 kanals and carved out more than 700 residential plots.

The same is the case with Capital Enclave with 552 kanals of useless land converted into 215 residential plots, Bahria Town Phase II, III, IV and V spreading over more than 2, 500 kanals and is selling nearly 1,400 residential plots.

“Imagine the revenue the CDA could have earned if these societies were charged roughly Rs0.5 million per kanal in land conversion fees,” said the senior official, explaining how in Rawalpindi the authorities were charging three times revenue for converting residential plots into commercial properties.

The fact that the CDA has missed out on such a big opportunity hurts its Chairman Tahir Shahbaz who believed that the revenue could really have made a lot of difference. “We will look into the matter,” he said.