On June 29, the Capital Development Authority (CDA) announced a highly-ambitious budget for fiscal 2012-13 which sees 11 new mega uplift projects starting in the federal capital.
These projects include the much-awaited Ghazi Barotha Water Supply; construction of Margalla Avenue, 11th Avenue and 12th Avenue; pedestrian underpasses in Blue Area; development of Park Enclave and sectors I-14, I-15, G-7 and G-8; widening of Islamabad Expressway from Koral Chowk to Rawat; and the Rapid Bus Transport service.The Ghazi Barotha Water Supply project is the only one that requires no funding at the moment as according to the memorandum of understanding signed with a Chinese firm, the latter will execute and finance the Rs47 billion project on build-operate-transfer basis.
But for the other projects related to water supply, road infrastructure and public transport service, the authority requires more than Rs10 billion by rough estimates. Given that the CDA is no longer depending on the federal government for funding, it will most certainly struggle to find ways to generate funds under the self-financing scheme.
When Dawn spoke to CDA Chairman Farkhand Iqbal, he expressed his confidence in the authority’s ability to generate the required funds.
“We do have a plan in place to raise revenue,” he said, “for starters, the authority has planned to auction commercial plots in Blue Area and open two new sectors C-15 and C-16.”
In fact, in its budget, the CDA has stated that just through sale of commercial and residential plots, it would be able to generate an amount of Rs21.4 billion. The total outlay of the budget is Rs28.3bilion.
That the CDA is relying heavily on its real estate bank is even more apparent when one looks at the budget where the sum generated through other sources is Rs4.6 billion (see box). It is obvious that if the CDA fails to sell out its land in the current fiscal year as targeted in the budget, the uplift schemes will remain in doldrums.
Interestingly, the budget also revealed that the authority has dropped the plan of municipal bonds that had been included in last year’s budget. The initial target had been to generate Rs3 billion through the sale of bonds, but the CDA bosses had failed to implement the plan in the last fiscal.
Another hope for CDA’s financial team to fetch more income through additional municipal taxes was also quashed when the government turned down their request to allow 100 per cent increase in property tax and water charges.
A source in the Cabinet Division, under which the CDA works, said: “The government was not in a mood to levy additional taxes on the people in the last year of the Pakistan People’s Party-led government.”