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Financial strain in CDA: Housing up huge debts - Salman - 12-08-2011 12:22 PM
Financial strain in CDA: Housing up huge debts
SLAMABAD, Dec 7: Imtiaz Inayat Elahi, the former Capital Development Authority chairman, may have quit but the financial strain that the civic agency endured under him is indelible. Today, the civic agency stands at the brink of financial bankruptcy as it is saddled with more liabilities than there were when he began his tenure in 2009.
Two major projects, the Park Enclave and Margalla Retreat, are prime examples of expensive yet entirely non-revenue generating schemes initiated under his chairmanship.
Park Enclave housing scheme was inaugurated by Prime Minister Yousuf Raza Gilani in July this year with an aim to meet the housing needs of the ‘rich’, while Margalla Retreat was initiated by the authority in Sector E-11 at the foot of Margalla Hills in September.
“The first instalment for allotment of plots in Park Enclave was Rs1.2 million, and the CDA generated a total of Rs700 million from its buyers. But the work at the site could not be initiated because of red-tape prevailing in the authority,” remarked an
official of the civic agency.
The delay in development on the site, he claimed, helped the adjacent Bahria Enclave Housing Scheme where almost 80 per cent of development work has been completed. “A one-kanal plot in Park Enclave costs Rs12 million, while Bahria Enclave offers the same size plot in Zone-IV for Rs6 million. The buyers obviously are opting for the latter,” he said.
Meanwhile, an official part of the Park Enclave development team divulged that even though the second instalment of Rs1 million was already due, they were yet to see any major deposits from the buyers.
The official added that the change of bureaucratic face within the CDA would do no good to the authority: “Malik Riaz’s Bahria Enclave is 78 per cent complete and CDA has nothing on ground to show to its buyers that we are developing the society. Only a road-roller is standing on the site.”
During Mr Elahi’s tenure cost of several development projects also escalated. For instance, when the Zero Point Interchange project began in Sept 2008, its cost was set at Rs2.27 billion but three years on it stands at Rs4.15 billion. Similarly, the cost of Lehtrar Road Project, started in 2009, jumped from Rs581 million to Rs1.27 billion.
The official said that the liabilities of projects undertaken in the tenures of chairmen before Mr Elahi would be materialising as well worsening the financial crisis within the agency: “A claim of Rs1.5 billion has already been received by the CDA for the housing scheme in Sector I-15. On the other hand, the CDA had only generated around Rs5 billion from initial instalments.”
The residential sector for low-income households was inaugurated by former Prime Minister Shaukat Aziz in 2006, when the property business was booming in the city. The CDA had planned to carve out around 4,500 plots and construct 8,000 flats in the sector and received around 344,000 applications for the plots. The developers marked the cost of a three-room flat at
Rs1.4 million, ignoring escalation price despite the fact that the general development cost of a flat during 2006-07 was around Rs1.8 million.
“CDA failed to develop sector I-15 despite acquiring the land and could not start the development work of housing units thus shattering the confidence of citizens who later requested the authority to return their amount,” said the official.
When this scribe contacted Ramzan Sajid, CDA spokesman, he defended Mr Elahi and said: “We never started the venture in Sector I-15 or the dubious Multi-Professional Housing Society, which the Supreme Court had to wrap up. Ask those who
started these projects.”
About Park Enclave, Mr Sajid said that the agency has Rs700 million from the sale of almost 650 plots and that there was no blockade of second instalments.
“The development of Park Enclave is supposed to take time since we have a set of procedures to follow before we can select a contractor for development. The nearby private society (Bahria Enclave) is being developed by a private developer and they can develop quick and fast as they will,” he commented.
The spokesman claimed that the agency was not facing any financial constraints and that “everything was per routine.” It is pertinent to mention that when Mr Elahi took over the reign of the CDA, it had cash reserves of Rs3 billion which have dwindled drastically.
Mr Sajid though said: “During Mr Elahi’s tenure we cleared liabilities of Rs 10 billion of several development projects so this shows that he did well despite all the financial constraints and issues.”