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ISLAMABAD, Aug 11: The National Industrial Parks Development and Management Company has failed to complete any project over the past five years, but its chief executive officer has spent Rs19 million on travelling.

According to a third party audit report, CEO Zubair Habib has been paid millions of rupees as honorarium and he has purchased office furniture and a laptop from Dubai and awarded contracts in violation of the rules of Public Procurement Regulatory Authority.

The company is a subsidiary of the Pakistan Industrial Development Corporation and was supposed to get its funding from the PIDC and the Public Sector Development Programme.

But instead of preparing a PC-1 and seeking an approval of the plan by the Planning Commission for release of funds, the company obtained Rs2 billion loan on high interest rate from the Emirates Global Islamic Bank, payable by Aug 11, 2014. Of the amount, Rs1.4 billion has remained unutilised.

It was agreed that one per cent of the loan would be paid by the company and rest by the government on its behalf against share in equity.

The audit found that the company had to bear Rs50.4 million financing cost. It issued equity against the interest paid by the government, diluting the stake of the PIDC in equity.

By June 30 last year, the PIDC held only 42 per cent of the shares. The percentage will decline further because the financing cost for four more years and Rs219 million advance against shares remain to be adjusted. This will effectively end PIDC’s control over the company and significantly dilute its share.

During a meeting of the PIDC’s board of directors held on Thursday, Production Minister Chaudhry Anwar Ali Cheema ordered an inquiry into the affairs of the company.

According to sources, he snubbed the company’s chief executive when he tried to interrupt the auditors present at the meeting.

In response to the audit objections, the company’s management said it was working on three industrial parks in Karachi — Korangi Creek, Bin Qasim and Rachna, formerly Auto Cluster Industrial Park.

It said it had spent Rs825 million on development work of the Korangi Creek Industrial Park. About the unutilised amount, it said it could not embark upon the project at the desired pace because the lease of the land to the PIDC had been cancelled by the Sindh government in 2006 due to non-payment. Restoration of lease, demarcation and issuance of survey numbers was completed in June 2009 and a prime portion of 40 acres of land is under litigation in the Sindh High Court where the company and PIDC are interveners in a civil suit against illegal allotment.

It said that during the latter half of last year 40 per cent of the low density zone in the park had been allotted to individuals whose feasibility reports had been approved by the allotment committee of the board of directors and who had paid the dues.It said the company was pursuing a strategy to attract overseas investors for initial sales in the Bin Qasim Park. The project is envisaged to finance itself through investments from overseas and local entrepreneurs. Development of Phase 1 is under way at the Sindh Industrial Trading Estate and efforts are being made to attract medium and large entrepreneurs.

The company said it had decided to rename the Auto Cluster Industrial Park as Rachna and include other industrial sectors as prospective customers after the auto sector faced a severe crisis. It said the auto industry and allied sectors had shown signs of recovery and the board had appointed a review committee to look into all aspects of the project.