ISLAMABAD: A major financial scandal involving alleged irregularities and misuse of authority has surfaced regarding the high-profile One Constitution Avenue project located in the federal capital’s sensitive Red Zone, following the federal cabinet’s review and approval of a Joint Investigation Team (JIT) report.
According to the report, prime state land originally allocated for the construction of a five-star hotel was allegedly diverted for the sale of luxury apartments. The investigation highlighted severe rule violations, alleged manipulation of bidding procedures, and non-payment of government dues.
Under government decisions, a proposal has been approved to restore the project to its original purpose as a five-star hotel and award it to a new developer through transparent auction. It has also been decided to refer further financial and criminal investigations of the matter to the National Accountability Bureau (NAB).
The Issue of 13.5 Acres of Valuable Land
The foundation of the One Constitution Avenue project was laid in 2005, when the Capital Development Authority (CDA) allotted 13.5 acres of prime land to the BNP Group for approximately Rs 4.88 billion. Under the agreement, a world-class five-star hotel was to be constructed on the site, with a 13-year (noted as 15-year in some terms) installment facility granted for land payment.
However, according to the JIT, foundational terms were subsequently altered, replacing the hotel component with residential apartments and commercial activities. The investigation report points out alleged manipulation in the bidding process and relaxation of rules to benefit the developer, including the removal of the bank guarantee condition.
National Exchequer Facing Billions in Losses
The project’s financial affairs have faced prolonged controversy. In 2019, the Supreme Court ordered the company to pay approximately Rs 17.50 billion. Authorities note that the company has only managed to deposit around Rs 2.90 billion so far, while massive amounts collected from apartment sales have also come under scrutiny in the report.
The JIT has underscored the roles of the developer and relevant government officials, recommending further legal action. Reports have also highlighted references naming Abdul Hafeez Shaikh as a central figure in the alleged scandal.
Action Against BNP Group and Future Course
Following the federal cabinet’s approval, recommendations have been made to blacklist the BNP Group from future government projects and initiate legal proceedings against them. The case has been handed over to NAB to investigate financial anomalies and potential criminal acts.
The government has resolved to advance the project through a transparent re-auction process, converting the building back into its initial five-star hotel designation.
Assurances of Refunds for Apartment Buyers
Addressing the future of individuals who invested in the project, the government assured that genuine buyers will not bear the brunt of the alleged malpractices by the developer and officials. Recommendations have been put forward to refund affected individuals their original investments.
The refund mechanism includes returning the principal amount along with profit exceeding bank interest rates, aimed at compensating the financial losses of investors who parked their savings in the project. With the government taking back stringent oversight of the prime location, attention will now focus on the outcomes of the NAB investigations and the execution of investor refunds.
