CDA to auction plots to avert financial crisis

[LRE]

CDA to auction plots to avert financial crisis



Thursday, November 06, 2008
Mobarik A. Virk

Islamabad

The Capital Development Authority (CDA) is busy preparing for an auction of residential and commercial plots in the metropolis in four weeks to be able to remain financially afloat.

Sources in the CDA Audit and Accounts Directorate told ‘The News’ that there were a little over Rs8 billion left in the kitty of the CDA while the obligations are ever mounting because of the ongoing as well as upcoming development projects.

“There are some immediate obligations amounting to Rs1.5 billion that the civic body is required to take care of. And there is no reason to have any doubts or anxiety about falling short on this because we are not in as bad a financial situation as one may believe,” the CDA head of the treasury, Abdus Samad, told ‘The News’.

However, he conceded that no work was launched for the development of new sectors and that is indeed causing a lot of concern among the people who have bought plots in the residential sectors, including I-14, I-15, I-16, D-12 and E-12 for over five years now.

“We know that we have faltered on this count. The civic body has not done much for the development of these sectors over the past five or may be more. But now our focus would be to launch development activity in Sector I-15 where we have not dug an inch of soil so far,” the treasury head told ‘The News’.

He said that to raise the immediately needed funds, the CDA was planning to auction some residential and commercial plots by the end of this month (November) or in the first week of December.

“We hope that we would raise enough money to support the ongoing as well as upcoming development projects. Particularly the development of new sectors,” he told ‘The News’.

When asked as to what had happened to the historic budget of Rs26 billion announced earlier this year by the CDA, he said that the targets would be met before the fiscal year ends.

“We hope that not only the figures projected in the CDA budget announced by the former chairman, Kamran Lashari, would be attained before June 30, 2009, but in fact, we are expecting to hit the double the target during this period, mainly through the sale of residential and commercial plots in the federal capital,” the treasury head of the CDA said.

To a question, he said that the CDA also has to recover an amount of Rs93.5 million from the payment it has made to the Supreme Court of Pakistan for disbursement among the owners of flats in the Margalla Tower, the privately owned building that collapsed because of structural defects in the October 8, 2005 earthquake.

The CDA has paid over Rs1.75 billion as compensation to the owners of private flats in the Margalla Tower. “This money has been paid to the Supreme Court of Pakistan as per its orders and now the apex court is making payments to the people affected due to the earthquake. The CDA is not involved in this process,” Samad told ‘The News’.

He added that against the payment of Rs1.75 billion, the CDA will resume the possession of the plot on which Margalla Tower was built according to the Supreme Court of Pakistan decision.

Similarly, he said, a number of other payments were also made in a rush during the month of September-October 2008 because it was apprehended that the quality of work and the value of a number of projects executed or under different stages of completion, would come under the microscope after the change at the top in the CDA.

And so it has proven. A special audit is already underway in the CDA by a team of the auditor general and serious objections are being raised after flaws were found, particularly in the process of awarding contracts for some big projects.

Regarding the capital invested by the CDA in the stock market, the head of the treasury told ‘The News’ that again the speculation being done on this account was not correct. “Yes. I would not deny that the CDA has invested in the stock market. But so have done a large number of other companies and national institutions. It is nothing unusual,” Samad said.

“The CDA has made an investment of 500 to 600 million rupees in the stock market that is hardly 6 to 7 per cent of the CDA’s budget. It was done on one-year basis and we expected a return of around 18 per cent on that investment. And instead of 18 per cent we have received 24 per cent interest on this investment last May-June. This is a system. Right now it may appear as we have suffered losses in the stock market but in fact we have made gains overall,” the CDA’s head of treasury said.


http://www.thenews.com.pk/daily_detail.asp?id=145190