ISLAMABAD, July 6: The chairman of the Capital Development Authority (CDA) has been changed, but the civic agency is still far from coming out of its financial crisis.

The authority’s financial woes started in 2011 when it launched mega projects but could not complete them in time due to shortage of funds and mismanagement.

These projects include the Rs4 billion Kashmir Highway (inaugurated in February 2011), the Rs1.2 billion Margallah Road (May 2012), the construction of Zero Point Interchange (which was meant for Rs1 billion but the cost escalated to Rs4 billion), the stuck-up residential venture of Park Enclave housing society (July 2011) and the Margallah Retreat housing project (September 2011).

The authority is now short of funds as it started a number of development projects but failed to meet their financial needs.

“We are short of payments as we have to pay the salaries. The accounting details show we only have Rs800 million in our accounts, which may lead to a default,” said a source in the treasury department of the civic agency. He said every month, Rs400 million alone went to the salaries of the huge-workforce in the civic agency.

“The authority is meeting its non-development expenses from the revenue generated from the sale of commercial and residential plots, which is not a long-term solution,” the finance wing official maintained. He said for the past three years, the CDA was paying the salaries of its employees from the proceeds of sale of plots.

Citing examples of the sale of lands, he said the CDA sold six plots in Blue Area and F-6 close to the Beverly Centre.

“These six plots were of different sizes and the authority generated approximately Rs4 billion. However, half of this was spent on the salaries of the CDA staff,” the official claimed.

According to the official, the additional strength of CDA employees hired by the previous Pakistan People’s Party regime was an additional burden on the authority’s declining financial positions.

“Around 3,000 workers were hired in CDA by the PPP government in the past five years,” the official said.

Furthermore, the CDA Board, headed by its new chairman Nadeem Hasan Asif, is still clueless on how to resolve the issue of meeting daily expenses from development funds.

“The revenue generated from the sale of plots should have been reserved for development projects, but since the CDA has no money, the management is using this to run its day-to-day business,” the official said.

He added that the Federal Board of Revenue (FBR) had also blocked CDA’s accounts mainly because the authority had failed to deposit Rs523 million of capital value tax to the FBR.

“It’s not just about taxes. There are outstanding electricity bills of almost Rs1.8 billion, but the authority doesn’t have enough money to pay Iesco (Islamabad Electric Supply Company),” insisted one administration department official.

He said the CDA had to give an advertisement in the national dailies relating to the sale of residential and commercial plots in order to get a quick bail out of its ongoing financial constraints.

According to the details, the authority had floated an advertisement on Saturday announcing the auction of residential and commercial plots in Markaz G-9, G-11, F-7, and F-10/3. It had also announced the auction of 23 commercial plots (measuring 1,066 sq yd each) in the newly planned Islamabad-Saddar Market in Sector I-12.

However, Chairman CDA Nadeem Hasan Asif, when approached for comments, said, “In a weeks time, I can guarantee a financial change in the authority and we will meet every target.”

“I accept that the CDA is facing financial troubles but we are working on new avenues of generating funds by implementing building bylaws on private housing societies, launching new residential and commercial plots and sectors,” maintained Mr Hasan.

Furthermore, he said the CDA would establish new parking spaces to generate money and also review the civic agency’s tax regime. It would revise different fees, and might target the advertising and hoarding sign business for generating funds.

The CDA chairman said he was monitoring progress on a daily basis and incase any department failed to meet the revenue targets, its officials would face the music.

Commenting over the auction of residential and commercial plots, he said, “Disposing the prime commercial property is the mandate of CDA and it will continue this side-by-side without any major issues. Once we start completing projects such as the Kashmir Highway, people will have more confidence in investing in CDA’s property, and revenue will increase.”