PAC gives CDA clean chit over plot allotment issue

[Salman]

ISLAMABAD: The Public Accounts Committee (PAC) on Wednesday gave a clean chit to the Capital Development Authority in a scam involving the creation of 800 additional plots in the posh I-8 Sector in Islamabad for its employees, which purportedly caused the CDA Rs20 billion loss.

The clean chit was given following the presentation given by Chairman CDA Maroof Afzal in which he assured the committee that no compromise was made on the provision of basic facility in the master plan of the sector while creating 800 additional plots and that these plots were allotted on seniority basis.

The committee held its meeting on Wednesday under the chairmanship of Syed Khursheed Shah in which audit paras relating to Cabinet Division with regard to Capital Development Authority for the financial year 2012-13 were discussed.

Taking strong notice of the delay in the construction of additional 104 family suites in the Parliament Lodges, the panel directed the CDA to cancel the contract of Habib Rafiq and Company after completion of all the legal requirements.

The financial year 2012-13 proved to be the worst year for the CDA in which the audit department exposed financial irregularities, financial indiscipline and corruption of aboveover Rs80 billion in only one year.

The plots issue in Islamabad turned out to be a mega scam as the PAC sought a report on the matters relating to Kurri village involving Rs30 billion within 45 days while agro farms worth billions of rupees were allotted in violation of rules.

The audit department on Tuesday revealed that the Capital Development Authority had created 800 additional plots in Sector I-8 and 3,187 plots in sectors G-10, G-11, I-10, I-11, D-12 and E-12 and allotted them to CDA employees and deputationists in excess of the admissible five percent quota reserved for the CDA employees, as provided in the Land Disposal Regulations, 2005 and this resulted in loss to the tune of Rs20 billion.

The chairman CDA in his presentation on the I-8 Sector told the committee that the sector was meant for the government employees and that the plots were created as per rules and regulation. “Neither rules nor the master plan was violated while creating additional plots in the I-8 Sector,” he assured the committee.

Syed Khursheed Shah said if no rules were violated, then the committee has no objection to creating additional plot for the CDA employees. The issue of delay in the completion of Parliament Lodges also came up before the committee and the Public Accounts Committee directed the CDA to cancel the contract of Habib Rafiq after completing all legal obligations.

The PAC also directed the CDA to hire a strong team of legal experts if the contractor goes into litigation over the cancellation of the contract.The chairman CDA told the committee that under the project, additional 104 family suites of Parliament Lodges were to be completed in July 2014 but so far only 20 percent work has been completed.

He informed the committee that notices have been issued to the contractor under relevant provisions of the contract agreement but the contractor had not yet responded.The chairman PAC observed that if the contractor does not respond, then the contract should be cancelled.

Some PAC members expressed concern that cancellation of the contract would cause further delay but after hearing the CDA chairman, the committee directed CDA to cancel the contract.

While examining the audit paras relating to CDA, the audit officials told the PAC about non-deposit of income tax and capital value tax by the allottees due to which the government suffered a loss of Rs260.78 million.

According to details presented by the audit department, the CDA allotted/leased out commercial plots through auction on January 10, 2012 and June 7-8, 2012 which was approved by the CDA board in its meeting in January 17, 2012 and June 13, 2012 and acceptance letter were issued to allottees on January 18, 2012 and June 28, 2012 but income tax @5% and Capital Value Tax @2% were not deposited by the allottees with tax authorities in advance for acceptance of bids and this resulted in loss of Rs260.78 million.

The PAC took notice of the matter and directed the CDA to submit a report within a week.Another issue came up before the PAC in which the CDA issued the completion certificate to a housing society without recovering Rs24.34 million on account of extension charges.

The audit officials told the committee that the Planning Wing (directorate Housing Society) CDA approved thelayout plan of Multi Professional Cooperative Housing Society, E-11, Islamabad, for an area of 811.50 kanals on June 10, 2005 and the NOC was issued on August 22, 2005 and the design was approved on November 18, 2008 but without construction of any sewerage treatment plant.

They told the committee that a notice for extension charges against the construction of sewerage treatment plant was issued on January 29, 2011, which was paid by the housing society but construction of sewerage tratment plant was not completed.

The stipulated completion date was August 22, 2009 and extension of one year expired on August 22, 2010, whereas according to the record produced, sewerage treatment was not completed till January 2012.The PAC directed the CDA not to issue an NOC to those housing societies which did not construct the sewerage treatment plants.

In another case, the audit officials told the committee that protracted delays and failures of CDA in development of plots and construction of flats in I-15 sectors caused a loss of Rs8.618 billion. The CDA allocated 7,925 flats and collected a sum of Rs7.038 billion for I-15 sector, Islamabad, during the year 2005 but could not construct and develop the flats during the last nine years and failed to provide residential facilities to the applicants. As a result, the cost of flats amounting to Rs3,302.10 million has been refunded to 3,391 allottees. Moreover, CDA has collected a sum of Rs1.58 billion on account of 613 plots in Park Enclave but failed to issue allotment letters to the allottees even after 14 months and the audit was of the view that CDA collected huge amount and utilised the same for running expenses and subsequently refunded the amount to the applicants after seven years.

The CDA chairman replied that the plan for Sector I-15 has been approved and now instead of flats, CDA has offered plots to all those who were allocated flats.Giving reasons for dropping the plan to construct flats, he said providing flat for Rs1.4 million was not a viable option so the plan was dropped.

The issue of agro farms also came up before the committee as the Audit official told the committee that the CDA, in gross violation in auction of agro farms, has sustained a loss of Rs238.5 million. The CDA chairman took the stance that these plots were auctioned at low prices as the market prices were also down.

In reply to a query, he told the committee that CDA has allowed construction in the area of 4,800 sq yards but the owners of agro farms have made construction on the area around 12,000 sq yards, which is a violation of rules. However, the PAC disputed his stance and referred the case to FIA for investigation while seeking report within a month.

PAC member Abdul Manan suggested that the names of those who violated the rules should also be given to FIA for investigation.The audit officials told the PAC that the National Police Foundation has illegally occupied land measuring 352 kanals worth Rs7.04 billion. However, the CDA chairman told the committee that the housing societies acquire land privately and that the CDA has nothing to do with it.

Meanwhile, the Public Accounts Committee (PAC) was told that CDA has suffered a loss of Rs1.12 billion due to non-removal of illegal construction of Madrassas and mosques on the CDA land.

The department of Auditor General of Pakistan (AGP) told the PAC that about 305 mosques/Madrassas had been illegally constructed on CDA’s land in various sectors of Islamabad.

The AGP observed that 69 mosques/Madrassas had encroached CDA’s land measuring an average area of 100 square yards approximately in each case, at various locations of Islamabad.

The audit officials were of the opinion that the CDA was responsible to monitor illegal use of its land and recover possession of the land by removing encroachments even by force if necessary but the CDA neither removed the illegal structures nor got the possession of the encroached land, resulting in loss of about Rs1.12 billion.The PAC referred the case to Departmental Accounting Committee of the Cabinet Division to look into it and come up with suggestions in the next meeting.