CDA may get power to launch joint ventures

ISLAMABAD, Jan 6: The government is considering allowing the Capital Development Authority (CDA) to carry out joint ventures with private parties in order to improve its financial health.

Under the CDA Ordinance 1960, the civic agency is not allowed to enter into the joint ventures. Some officials in the CDA say the amended ordinance allowing the authority to enter into the joint ventures is with President Asif Ali Zardari and may be signed soon.

A senior official of the civic agency on the condition of anonymity told Dawn: “The need for the amendment was felt by the CDA board after the Supreme Court struck down a joint venture of the authority for launching a private housing scheme in April 2011.”

The official was referring to the CDA’s multi-billion Northern Strip joint venture with the Multi-Professional Cooperative Housing Scheme (MPCHS) to develop 54 acres of land in Sector E-11 as a residential and commercial area.

After the apex court verdict, the MPCHS claimed Rs2.03 billion from the CDA saying it had already spent the amount on buying the land from the owners and developing it.

An eight-member committee formed by the CDA board in June 2011, however, suggested that the company should be paid only Rs1.26 billion.In November 2011, the owners of the land approached the Islamabad High Court claiming that the MPCHS had paid them no compensation. They said the CDA should now pay their dues directly.The official added: “The MPCHS matter is still in the court which shows that joint ventures are controversial and need an increased scrutiny.”

Another official close to the current move added that the draft of the amended ordinance had already reached the president’s office which would be signed anytime. “This will mainly benefit the private developers,” he contended.

“Once the draft ordinance is signed, the authority will ask private parties to get vacated all the state lands currently under adverse possession without paying compensation to the people occupying it for smooth development of residential sectors or reviving the stuck-up projects like sector D-12,” he added.

A law department official told Dawn that the CDA was seeking an additional clause in section 10-A of the ordinance which would empower it to establish a “Public-private partnership cell.”

He pointed out that the cell would comprise officials from different specialised sections of the finance department, technical wing and legal experts having a role to identify suitable projects, negotiate and sign an agreement with private parties after getting an approval from the CDA board.

He said under the 1960 ordinance the authority was mandated with “planning and development of the capital (Islamabad).” He added: “Now it seems the civic agency is shying away from this basic responsibility.”

An estate wing official informed Dawn that for the last about two decades the authority could not develop any new residential sector mainly because of poor planning and financial management.

“The CDA could not develop D-12 which was inaugurated in 1988. Other sectors like E-12, G-12, Park Enclave and Margallah Retreat are also in limbo. This puts a question mark on the development progress of the authority,” said the official.

“G-11 was the last sector developed in the city in 1987. Since then, the authority has ventured into launching new projects only in file,” said the official.

Niazullah Niazi, a senior lawyer in Islamabad High Court, said: “It’s against the spirit of the CDA Ordinance 1960 to have a joint venture.” He said if the ordinance was amended by the president, the CDA would have to change its land rehabilitation procedure under which it develops residential sectors after compensating the land owners.

“This is a move to benefit the powerful and mighty property tycoons and developers which will deprive the state of its rights to earn money through sale of land in the form of plots,” said Mr Niazi.

He maintained that it would also open new avenues of corruption and the authority would be dependent on the developers and stay away from its main task of developing the capital city.

“The CDA chairman should send all the employees home and keep a handful of officers because after the amendment the authority will not need a huge workforce as contractors will be developing the city, not the CDA,” said the lawyer.

However, CDA spokesman Ramzan Sajid insisted that the joint ventures would help the authority complete the projects stuck up for many years.

“Why the joint venture is being criticised only in the federal capital and not across the Faziabad Bridge (Punjab),” he maintained.

The spokesman, however, could not give any example for joint venture projects in Punjab. He added: “We are hopeful that the amendment to the ordinance will be signed soon for the betterment of the city.”