ISLAMABAD: After renewed activism by the National Accountability Bureau (NAB), the Capital Development Authority (CDA) has in principle decided to cancel a deal with a housing society under which the authority is supposed to pay the housing society over a billion rupees.

Sources said NAB had raised questions about the CDA’s deal with the Multi-Professional Cooperative Housing Society a few days ago.

Apparently perturbed by the bureau’s move, CDA high-ups called a meeting of the board on Wednesday during which it was decided in principle that the civic body would not pay the housing society anymore, after cancelling two previous board decisions from 2011-12.

NAB had raised questions about the civic body’s arrangements with the society

The CDA had entered into a joint venture agreement with the society in 2008 to develop the northern strip of E-11. The housing society began carrying out development work on the land after taking possession of it, but in 2011, the Supreme Court declared the joint venture to be illegal. The CDA was directed to take over the project and complete it in accordance with the CDA Ordinance.

The matter was discussed in a CDA board meeting in 2011, which constituted a commission of four CDA members and four external members to evaluate the housing society’s claim.

The commission compiled its report, and the board decided to pay Rs316.5 million on account of verifiable development expense. It was then decided that the remaining payment would be made after verification from an audit.

A special CDA board meeting held in November the same year had approved Rs27.2m in payment to the society on account of overhead and professional charges.

However, the then director roads north had expressed apprehensions over the legitimacy of the payment and recorded his concerns.

Then, sources said, the case was referred to the CDA’s legal adviser, who advised that the authority not made any further payments to the society.

Nonetheless, Rs27.2m was released to the society on directions from the then members engineering and finance.

Sources said the CDA board in 2012 approved the society’s claim for approximately Rs1.3 billion. Consequently, the housing society filed a civil suit seeking the recovery of its claim and the former chief legal adviser of the CDA submitted a statement to the court conceding that Rs1.3bn would be paid to the society when the funds are available.

The CDA summary, presented before the board meeting on Wednesday, said the amount recommended by the commission and supposedly verified by the audit firm on account of obtaining possession of land had already been reviewed by the SC vide its judgement issued on April 15, 2011.

In that judgement, the SC had observed that according to agreements between the CDA and the society, sums running into millions of rupees were allegedly paid, but no details of payments, such as bank drafts, pay orders, cheques and so on were given in the said agreements.

“Thus looked at from any angle, the transaction appears to be a sham deal. The whole exercise appears to be an eyewash,” the SC had ruled, according to CDA’s summary presented before the board.

The CDA’s summary said that the actual sum spent by the society that could be verified through records was Rs316.5m, on account of the development expense, which had already been paid to the society.

It said that the previous board decisions held in November 2011 and February 2012 needed to be reviewed. The board decided to cancel the decisions and stop payments to the society.

When contacted, CDA Member Planning Asad Mehboob Kayani told Dawn that the board in its meeting deliberated over the summary and in principle decided not to release any more amount to the housing society.

He further said NAB as a routine keeps a check on various projects of the CDA, including the one in question.

Published in Dawn, March 22nd, 2018