The federal government has decided to convert the controversial One Constitution Avenue project in Islamabad into a five-star hotel after the federal cabinet on 4 November approved the recommendations of a joint investigation team that found serious irregularities in the project’s development and sale of apartments. The decision brings to a head a long-running dispute over a prominent site in the capital, and it sets out a new future for buildings that have been the subject of legal and administrative action.
Interior Minister Mohsin Naqvi announced the decision at a press conference on Wednesday, saying the buildings had formally become the property of the Capital Development Authority and the government had legally taken possession of the property. The formal transfer to the CDA is a key step, as it establishes the state’s ownership of the site and clears the way for the conversion to proceed. Naqvi said the CDA would enter into an agreement with a renowned international hotel chain and the conversion would be undertaken in the coming months, as a hotel was the plot’s original purpose. He said there is a severe shortage of hotels in Islamabad, a point that supports the decision to return the site to its intended use.
Apartment owners will be compensated through cash payments after proper valuation, with adjustments linked to the Karachi Interbank Offered Rate, known as Kibor, and Naqvi described compensation as binding on the government after the JIT report. The commitment to compensate owners is important for those who bought apartments in the project and who have faced uncertainty about their investment since the dispute began. The use of proper valuation and Kibor-linked adjustments is intended to ensure that compensation reflects the value of what was paid and the time that has passed.
Planning Minister Ahsan Iqbal said the JIT report had been presented to and approved by the cabinet, and the investigation involved the National Accountability Bureau, the Federal Investigation Agency, the Federal Board of Revenue, the Securities and Exchange Commission of Pakistan, the Intelligence Bureau and Inter-Services Intelligence. The involvement of six agencies underlines the breadth of the investigation, which covered accountability, law enforcement, taxation, corporate regulation and intelligence. The cabinet’s approval of the report gives formal endorsement to its findings and recommendations.
The JIT recommended action against CDA officials and others who allegedly facilitated illegal construction, a transparent re-auction of the project, compensation for affected investors and a change of the project’s name, which it alleged had been obtained through forgery. Those recommendations address both the past and the future: action against those allegedly responsible, a transparent process for any future disposal, compensation for those affected, and a correction of the name issue. The allegations are presented as findings of the JIT and as matters for further action, and no finding of guilt has been established against any individual by a court on the basis of the report alone.
The CDA had auctioned the 13.5-acre plot in 2004-05 for Rs4.8 billion for a five-star hotel with serviced apartments. The plot was awarded to BNP Group following an auction on 9 March 2005. The developer went on to construct a luxury residential and commercial complex and sell apartments, a departure from the original purpose of a hotel with serviced apartments. The CDA cancelled the building’s lease after the company defaulted on payments, the Islamabad High Court upheld the decision in April, and residents were evicted in May.
NAB has been asked to fast-track its investigation and complete it within three months. The main contractor, identified as Hafeez Sheikh, and other accused are on the Exit Control List and a blocklist. The three-month timeframe for NAB sets a clear deadline for the next stage of the investigation, while the restrictions on travel and other activities reflect the seriousness with which the case is being treated. The conversion of the project into a hotel will proceed alongside that investigation, with the CDA working towards an agreement with an international hotel chain in the coming months.
Source: Dawn, The Express Tribune.
