ISLAMABAD: The federal government has decided to convert the controversial One Constitution Avenue project into a five-star hotel after the cabinet approved the recommendations of a joint investigation team (JIT) that found serious irregularities in the project’s development and sale of apartments.
Interior Minister Mohsin Naqvi announced the decision at a press conference on Wednesday, noting that the buildings had formally become the property of the Capital Development Authority (CDA) following the cabinet’s approval.
“We are going to set up a five-star hotel in this building,” he said, stressing that the plot was meant for a hotel.
He said the CDA would enter into an agreement with a renowned international hotel chain and the conversion would be undertaken in the coming months.
Mr Naqvi said apartment owners would be compensated through cash payments after proper valuation and adjustments would be linked to the Karachi Interbank Offered Rate (Kibor).
The interior minister acknowledged that CDA officials had been at fault in the matter and said the National Accountability Bureau (NAB) would share details of those responsible.
He also stressed that there should be no double standards in the CDA’s anti-encroachment drive and that influential and ordinary citizens should be treated equally. “When we started action against this building, many portrayed it as if we had committed a crime,” he said.
JIT findings
Separately, Planning Minister Ahsan Iqbal said the federal cabinet had approved the JIT’s findings and recommendations, including legal action against those responsible for alleged irregularities, blacklisting of the developer and compensation for affected investors.
Addressing a press conference alongside Information Minister Attaullah Tarar and Minister of State for Interior Tallal Chaudhry, he said the investigation had found serious irregularities in the project’s bidding and approval processes.
According to Mr Iqbal, the JIT found that the bidding process had been manipulated, rules relaxed to favour certain interests and the lease awarded to a company that did not qualify on merit.
He said the requirement for a bank guarantee had also been removed to facilitate the developer, while CDA officials were found negligent and allegedly involved in the irregularities.
Mr Iqbal said the JIT had identified Abdul Hafeez Sheikh as the alleged mastermind of the scheme, accusing him of acting in connivance with CDA officials.
He said the report also identified the alleged involvement of former CDA chairman Kamran Lashari, Dr Faisal Awan, Azhar Ali Chaudhry, retd Brig Nasrullah and the late Rai Nawaz Kharal.
The minister said the JIT had recommended blacklisting Abdul Hafeez Sheikh and his company from future public-sector projects and initiating appropriate legal proceedings.
NAB had also been directed to conduct a comprehensive investigation into those allegedly involved, including officials whose signatures appeared on relevant documents, he added.
Mr Iqbal said the JIT had recommended renaming the project, arguing that the title “One Constitution Avenue” had been obtained through fraudulent means.
He said the Ministry of Foreign Affairs had also claimed the address, as its building was the first on Constitution Avenue, while the project’s name had allegedly been used to attract investors.
The JIT also recommended an overhaul of the CDA, including amendments to its governing ordinance, establishment of an independent Master Plan Commission, digitisation of official records and rotation of officials in the Town Planning, Enforcement and Building Control departments every two years.
The CDA had auctioned the plot in 2004-05 for Rs4.8 billion for the construction of a five-star hotel with serviced apartments. However, the developer failed to meet its payment obligations and instead constructed around 250 residential apartments, which were sold to buyers including politicians, bureaucrats and retired judges.
In 2019, the Supreme Court directed the company to pay Rs17.5bn in instalments over eight years, but only Rs2.9bn had been deposited. The Islamabad High Court later upheld the CDA’s cancellation of the plot allotment over payment defaults.
With input from APP
Published in Dawn, November 5th, 2026
