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Karachi: Ban on land lease and auction results in Rs 600 million loss to CDGK - LahoreEstate - 09-28-2009 06:07 AM
By Irfan Aligi
KARACHI: The ban imposed by the Sindh chief minister on lease and auction of land by the local bodies in the province has resulted in a loss of Rs 600 million to the City District Government Karachi (CDGK) as two of it major projects have hung midway.
The CDGK has already been going through a serious financial crunch due to depletion of Single Line Transfer Funds (SLTF). For the first time, the CDGK could not pay Eid advance to its employees this year.
The CDGK had demolished Shahabuddin Market, which is adjacent to the historical Empress Market in Saddar Town so a new market could be constructed at the spot. It had spent Rs 80 million for temporary rehabilitation of its shopkeepers, while the contract was awarded to Abdul Majeed and Company for constructing the new building of the market.
The contractor firm had invested around Rs 500 million for constructing the building foundation. According to the contract, the contractor firm was to gather necessary funds from the proposed owners of shops in the new building but the ban on lease and auction of the land has caused the CDGK and the contractor firm to suffer financially.
The shopkeepers of the Shahabuddin Market have also been left in a lurch after the ban as they were supposed to be allotted shops in the new building.
The same is the case of the CDGK Saddar Car Parking Plaza, which also could also not be auctioned or sold out.
While talking to Daily Times, CDGK Estate Department District Officer Muneer Ali Khan said that as yet, the CDGK lacks any sovereign policy on the subject whether the CDGK Saddar Car Parking Plaza would be rented out to shopkeepers or would allot the shops to the affected shopkeepers of the Shahabuddin Market on permanent ownership basis or would operate it alone.
The loss of revenue is partly due to early investment of huge funds on rehabilitation of the affected shopkeepers of Shahabuddin Market and due to delay in the sale of shops and floors of the CDGK Saddar Car Parking Plaza through an auction, he said.
The CDGK Estate by-laws have a clause that when the land was auctioned, the owner would be awarded necessary allotment while after obtaining the allotment. The would-be allottee could get the land leased in his favour for a 99-year period. However, in case the land was rented out, the CDGK remains the owner of the land and could get it back any time, he said.
The ban has also caused the CDGK Estate Department to suffer a colossal loss amounting to Rs 40 million because the ban has prevented it from auctioning the newly built 39 shops in Liaquatabad Super Market. The ban has inflicted the CDGK with a loss of around Rs 30 million due to delay in construction of new building of Shahabuddin Market while the gross loss as yet has amounted to Rs 600 million on these two projects only, he claimed.
The CDGK has to decide within a couple of days as how to deal with this situation or else it would be too late to take any step due to the fast expiring tenure of the present city government.
http://dailytimes.com.pk/default.asp?page=2009\09\28\story_28-9-2009_pg12_5