LAHORE: Pakistan Railways (PR) took over the management and possession of the Royal Palm Golf and Country Club on Friday.

A contingent of the PR police also evicted the management from the premises and closed its doors to members and staffers.

Some club employees on duty also clashed with the activists of a railways union accompanying the policemen. Later, other colleagues joined them to hold a demonstration outside the club and kept Canal Bank Road blocked for hours. They were outside the club till our going to the press at 11pm.

Management says will fight in courts

Minister for Railways Khwaja Saad Rafique held a news conference in the afternoon to justify the takeover.

“The private company owed Rs2.16 billion to the PR and had not been paying even the land rent,” he said, adding, “we have terminated the lease contract with the private company on account of default”.

The Mainland Husnain Pakistan Ltd (MHPL), the management of club, denied the allegations of the minister and said an FIR would be lodged with the Lahore police against Mr Rafique and other senior officers of railways for illegally taking over the premises. The company paid Rs550 million to the railways administration from 2001 to 2014. Last year, the railways administration refused to accept a cheque for more than Rs40 million.

MHPL Chairman Ramzan Sheikh told Dawn his company would also file contempt petitions in the Lahore High Court and the Supreme Court besides holding protests on the street.

The minister said at the news conference that initially, the club would be run by PR subsidiary -- Railway Estate Development and Marketing Company – but later its management would be handed over to some other party through an auction.

“All healthy activities at the club will be restored gradually after Eidul Fitr,” said Mr Rafique, adding that the deal had been controversial since July 2001 when a consortium of Malaysian and Pakistani entrepreneurs was leased the Pakistan Railways Golf Course in line with the then government’s commercialisation plan to minimise PR deficit and generate additional income.

Financial implications of the deal were not sought before awarding a contract to the consortium. The lease had been awarded at very low rates which benefited the lessee instead of the PR.

“According to the tenders, railways offered 103 acres of its golf club for 33 years. However, when the agreement was signed it turned out to be 140 acres for 49 years. A total of 33 bungalows and 108 residential quarters housing railway employees were demolished to create additional land,” he said.

The company was neither fulfilling the financial nor contractual obligations of the deal. The company was to construct a five-star hotel at the Golf Club within a year of the takeover and pay a penalty of $1million in case of failure to do so. But neither the foundation stone of the facility was laid nor the company paid no penalty, he said.

Under the agreement, the company was to pay Rs21.6 million annually to the PR but it was paying only Rs2.16 million. The company management had not paying the 10 per cent of the gross revenue with railways and had not submitted audited accounts of the club pertaining to last four years, the minister said and added cinemas and marquees were set up in the club without taking railways administration’s permission.

“We know that a case is currently pending in Supreme Court of Pakistan but the club management has defaulted on the dues and what we did is legal,” he added.

The minister claimed that the terms of the deal were shabby. A case by two former federal ministers, Dr Mubashir Hasan and Ishaq Khan Khakwani, had also been lying pending in the Supreme Court.

Regarding the claims of Rafique that original lease terms were manipulated, Mr Sheikh said that the National Accountability Bureau investigated the matter, found nothing and submitted a report to Supreme Court in this regard.

“Railways forcibly entered the premises with its 450 or so police personnel in the wee hours of Friday, sealed the premises of the club without even informing its management and the local police though we have obtained a stay order from a local court against any action and a case has lying pending in the Supreme Court. How can a contract between two parties be terminated unilaterally?” said Mr Sheikh.

“We invested more than Rs2 billion in the club. Unilateral cancellation of the contract has hurt the confidence of businessmen in the country. Previously he unilaterally cancelled contract with the company running Business Express. Who will invest here now after such a gross violation of the sanctity of business contracts? Mr Rafique seems to be vindictive… has perhaps decided to hand over management of the club to some favorite. But we will fight for our right.”

The club has some 1,000 or so employees who work in three shifts. They were worried about their future as there has been no word either from the railways or the company who would make payment of their salaries ahead of Eidul Fitr.

A number of club members expressed surprise over the railways administration step to altogether seal the club.

“It would have been better to settle issues on the table. And if it was not possible, the railways administration would have handed over the control of the club to some neutral party. Closing down the club is not a wise step,” said a member who had been a senior civil servant.

Published in Dawn, June 25th, 2016