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ISLAMABAD: A private developer has asked to clear the Capital Development Authority’s (CDA) dues over a 20-year period for land meant for the Grand Hyatt Hotel.

A proposal submitted to the Supreme Court by M/s BNP seeking the regularisation of the land, which is adjacent to the Jinnah Convention Centre in Islamabad, has agreed to pay the CDA Rs15 billion if the land can be utilised for commercial ventures and on the assurance that the company will be cleared in all pending National Accountability Bureau (NAB) and Federal Investigation Authority (FIA) inquiries.

BNP was allotted the aforementioned land to build a luxury hotel in 2004, but the company instead built luxury apartments that were sold to buyers, which include several high profile figures such as Prime Minister Imran Khan.

The proposal was submitted to the SC on Monday by BNP’s counsel Barrister Syed Ali Zafar.

BNP agrees to pay CDA Rs15bn if land can be used for commercial ventures, company is cleared in all pending inquiries

It states: “The original bid [for the hotel plot] was Rs4.8 billion out of which the appellant [M/s BNP] has already paid an amount of Rs1.23 billion while the remaining Rs3.6 billion was agreed to be paid in instalments in 11 years by 2026.

“The appellant may be allowed to continue to pay the amount of Rs3.6 billion in the already agreed 11 instalments commencing in 2019 as soon as the revised plans are approved/all NOCs issued by CDA/government and the instalments of the enhanced bid amount to be paid thereafter in subsequent 11 years.”

According to the payment schedule attached to the proposal, the company would clear the CDA’s outstanding dues by 2038.

The proposal demanded that “the pending enquiry/investigation by NAB shall be closed as the issue stands resolved and settled… CDA in the future shall not cancel the project for any of the reasons, or raise any of the objections.”

“CDA shall accordingly transfer the ownership of the land to the appellant for commercial purpose,” the proposal added.

The CDA cancelled the allotment of the plot in July 2016 because the developer had built and sold luxury apartments instead of a hotel. The matter went to the Islamabad High Court (IHC), which upheld the cancellation, and its order was also endorsed by a two-member division bench in an intra-court appeal.

BNP then filed an appeal before the SC in which the developer expressed willingness to pay Rs15bn on the aforementioned conditions.

According to CDA estimates, the cost of the land if auctioned for commercial purposes and not for a hotel business would be just over Rs58bn.

In its reply, the authority said: “CDA is empowered to cancel the lease and the appellants were provided opportunity of hearing before doing so. The action taken in within the parameters of law.”

“The real market value of any plot could only be determined by market forces through open auction provided that the land use/purpose and planning parameters along with floor area ratio are clearly defined in the auction brochure which wasn’t the case at the time of disposal of the subject plot,” the CDA said.

Generally, the reply said, the CDA leases a plot for a 33-year period that may be extended subject to CDA policy in vogue with the payment of renewal charges. In this case, a lease for a 99-year period was executed through an unregistered instrument, and possession handed over on a meagre 15pc payment.

The plot was auctioned for the construction of a luxury hotel, but the building plan approved was more or less ‘mixed use commercial’. This violated the planning parameters and bylaws approved by the CDA Board on Oct 11, 1997.

No approval from the federal government was ever obtained in this regard. The scope of the project was enlarged in the subsequent lease deed and building plans, etc, the reply added.

The SC will take up the case today (Thursday).

Published in Dawn, December 13th, 2018