Royal Palm deal becomes more controversial

[Lahore_Real_Estate]

* Club management comes out all guns blazing

Staff Report

ISLAMABAD: Is the politically entangled Royal Palm Golf and Country Club an exemplary public-private model, as recommended by the Senate committee or does this profitable venture need to be snatched away from the current management and given back to the Railways to turn it into another loss rendering entity, as suggested by a special committee of the National Assembly?

National Assembly Speaker Fehmida Mirza might have to take a decision on this soon. Whether she would lay her specially constituted committee’s report before the House or send it to Railways Minister Ghulam Bilour for implementation remains unsure because her office is keeping a mum.

The controversy further escalated when the club management has come out accusing key movers and shakers in the National Assembly committee such as Sheikh Waqas Akram for initiating this move against them, thus misleading the House and the special committee to launch a vicious campaign against them and settle political scores with the club CEO, Ramzan Sheikh.

Royal Palm management claimed that they were not even given the right to a proper presentation before the special committee and maintained that certain lawmakers had failed to hide their bias against them when they recommended to the assembly speaker the deal for 141 acres of Pakistan Railways land to the golf course be scrapped.

Royal Palm Managing Partner Pervez Qureshi revealed that a NA standing committee member on the matter had political rivalries with his partner. “MNA Sheikh Waqas has a history of political conflicts with my partner Ramzan, whose father defeated Waqas’s uncle in the 1985 elections for an MPA seat,” he said.

According to him, the political battle between the two families worsened in 2004 when Ramzan’s brother contested elections for district nazim against Ramzan Sheikh’s father. “It is unfair and a clear conflict of interest that a political rival is not only sitting in the said committee but is also driving the decisions,” he remarked. Rift in the committee was also in play as four of its members filed two dissenting notes about the anti-investment campaign at the committee, who objected to the way the issue was being handled. These members included Tariq Tarar, Tariq Shabbir, Iqbal Mohammad Ali Khan and Pervez Khan.

When Daily Times approached MNA Nadeem Afzal – committee head – to explain why he had omitted the notes in the recommendations, and in one of the TV shows he conceded “only two MNAs dissented”, and that Daily Times had documented proof of the four members’ dissent, he said, “I don’t know about that.” The National Assembly Committee on Pakistan Railways made the recommendations at the conclusion of the proceedings in August.

The committee ignored the previously documented recommendations of the Senate Committee on Pakistan Railways on the same issue, wherein it had highly praised the project and had even asked the Pakistan Railways to create a similar facility at all its stations.

The committee made its recommendations on August 26, while the Senate committee made its recommendations on May 12. The Senate committee said, “Such projects of international standard may also be started in Railways workshops, locomotive factories and sleeper-making factories on a joint venture basis to help financial as well as operational condition of the Railways.”

The NA committee seemed to have ignored some basic facts about the deal. The land lease deal was for a patch on the main Canal Road, initially designated for a golf course in the master plan of the city. Over the past nine years, the investor has spent over Rs 1,500 million, to improve golf course to the international level and constructed a country club. The NA committee in its recommendations does not specify what would become of the investment, plus the payment of revenue to Pakistan Railways in millions.

To a question regarding the under assessment of the land value, Pervez Qureshi said the formula for assessing the value was totally incorrect as the 140-acre land of Royal Palm was originally “Green Space” as per the master plan of Lahore. “It is ridiculous to evaluate the land by comparing it to the price of residential and commercial areas, the price of the land is calculated by what can be built on it and not where the land is,” he replied.

The committee picked up the issue with Pakistan Railways that in one of its minutes of the departmental executive for bid-processing, it mentioned that the lease was to be Rs 21.6 million per annum, whereas the concluded deal stood at Rs 2.16 million. Qureshi, however, insists that the deal was never for Rs 21.6 million but Rs 2.16 million per annum. “From day one, we have been asking the Railway authorities to grant us lease on Rs 2.16 million, we have proof of correspondence where different rates near 2.16 are being negotiated with the Railways authorities,” Qureshi said.

The NA committee had also highlighted that the initial lease period was fixed for 33 years, whereas the concluded period was recorded 49 years. This objection was made without realising that the increase in lease period would increase the Pakistan Railways revenues and the agreement was extendable to 99 years. Fauzia Wahab, a member of NA’s Special Committee on Pakistan Railways, told Daily Times she lost interest in the proceedings, but could not register her displeasure, as it would not mean anything. One of the members sounded too interested in his agenda, which was obvious, she added.

The Senate committee on the issue had also recorded in its recommendation that the Royal Palm administration should move ahead according to the terms and conditions of the agreement as it is a valid agreement for both the parties for execution on all terms, including construction of a five star hotel as mentioned in the agreement.