Transparency asks PAC to act against DHA Islamabad

[Lahore_Real_Estate]

ISLAMABAD: The Transparency International Pakistan has asked chairman Public Accounts Committee to take notice of the complaints against Defence Housing Authority Islamabad as the authority was allegedly violating the laws of the land. Chairman TIP Syed Adil Gilani, in his letter to Ch Nisar, has mentioned that overseas buyers have complaints that DHA was delaying allotment of plots in DHAI Phase-II Extension and development charges were being levied time and again. The DHA has replied that it was collecting development charges according to bylaws and escalation in the construction material has caused a raise in development charges. DHA also clarified that delay in instalments from members was the reason behind delay in the allotment of plots. The letter says: “TIP refers to its various letters on alleged violation of Public Procurement Rules, 2004, by DHA Islamabad, and finally the complaint made on 5 July 2010 by overseas buyers in overseas sector of DHA. Reminder was sent on Oct 14, 2010, by TIP and PPRA also requested DHA twice to respond, but DHA Islamabad failed to respond. Only when DHA Islamabad was asked by PAC vide its letter dated 6 October 2010 that TI Pakistan was sent clarification vide No. DHAI/211/16/Legal on Oct 19, 2010. The position stated in the DHA Islamabad letter is in contradiction with the laws of Pakistan.
“1. The complaint of buyers of overseas sector of DHA is genuine and DHA reply is not based on facts. 8,000 plots of one kanal were sold in 2005 in Original Phase-II extension. DHA has not substantiated the claim of complainant that around five years back, in Feb/March 2005, files of DHAI Phase-2-Ext were sold to general public through a marketing agency ‘JIN’ in the lumpsum price range of Rs3.600 m to Rs4.100 m for 500sq ft plot. This adopted strategy was first time ‘experienced’ by any DHA in the history of Pakistan, and a margin of around 400000-600000 rupees per plot was fetched. Soon after this sale, an ‘Overseas Sector’ was advertised/sold at the foreign exchange price equivalent to Rs4.2 m even in instalments. After it, plots to servicemen were sold, and then Commoners Town was merged in DHAI. Now another process of awarding highly discounted plots to the favourites is underway. All this process has severely affected the market price of the general public plots/files, on top of the general real estate slump experienced in the country. It seems that the planners got involved in ‘inside-trading’ and minted billions in just one go. DHA failed to clarify the allegations.”
“2. DHA has against the requirement of PPRA Ordinance, 2002, and Public Procurement Rules, 2004, and DHA Islamabad Ordinance 2005 & 2007, awarded contracts to M/s BT and M/s HRL, viz. contracts worth billions of rupees comprising thousands of acres, to M/s BT and HRL, 2009 for ‘DHA Valley and DHA Valley Overseas Block’ and contract of HRL on May 18, 2006, for the development of Phase I-Extn and earth breaking ceremony was carried out on 6th June, 06. Total area to be developed is 1500 acres in Phase-1 extension.”
“3. DHA is also alleged to have awarded contracts against rules to M/s J.I.N. Associates Marketing Agency and M/s Meinhardt (Pakistan) Pvt Ltd 2006, for providing consultancy services on development of Phase II. DHA did not clarify these allegations.”
TI Pakistan is of the view that DHA Islamabad is blatantly violating the laws of Pakistan, and quotes following two related laws, which are applicable to DHA Islamabad. One more violation of law reported by the complainant is that even though DHA Islamabad has not been authorised to collect municipal charges, taxes, which is only allowed to local government of cantonment board under the laws of Pakistan, DHA Islamabad has allowed these charges as maintenance charges to be paid to M/s BT and M/s HRL for 25 years. TI Pakistan is for across-the-board application of the rule of law.”
Secretary DHAI, Lt Col Moazzam Iqbal, in reply to TIP dated 19-10-2010 has mentioned that the complaints against DHA were merely based on assertions without any solid ground. “There is no discrimination as to price in allotment of plots to the members”, the letter says. It adds: “As per bylaws of the DHA Islamabad it is permitted to collect the development charges prior to physical allocation of the plots. New development charges referred as ‘time dependent price escalation in the development charges’ are imposed due to escalation in the price of construction material which increased the cost of development.”