ISLAMABAD: A high-level Joint Investigation Team (JIT) has uncovered major financial, administrative and regulatory irregularities in Islamabad’s One Constitution Avenue project, also known as Grand Hyatt Tower, identifying alleged collusion between former Capital Development Authority (CDA) officials and the private developer that resulted in substantial losses to the public exchequer and financial harm to apartment purchasers.
The report reveals that valuable state-owned land—originally allocated for the construction of a five-star hotel—was allegedly diverted from its intended purpose and used instead for the sale of luxury apartments. The investigation highlights several issues, including violations of regulations, alleged manipulation of the bidding process, and the non-payment of government dues.
In line with government decisions, a proposal has been approved to revert the project to its original purpose—a five-star hotel—and to hand it over to a new developer through a transparent auction process. It has also been decided to refer the matter to the National Accountability Bureau (NAB) for further financial and criminal investigation.
The Case of the 13.5-Acre Prime Land
The foundation for the ‘One Constitution Avenue’ project was laid in 2005. The Capital Development Authority (CDA) allotted 13.5 acres of prime land to the BNP Group for approximately 4.88 billion rupees.
Under the agreement, a world-class five-star hotel was to be constructed on the site. A facility was provided to pay the cost of the land in installments over a period of 15 years.
However, according to the JIT, the fundamental terms of the project were subsequently altered. The space originally designated for a hotel was repurposed for residential apartments and commercial activities.
The investigative report points to alleged manipulation during the bidding process and the relaxation of rules specifically to benefit the developer. The issue of waiving the bank guarantee requirement has also become part of the investigation.
A loss of Rs 17.5 billion to the national exchequer?
The financial aspects of this project have long been a subject of controversy. In 2019, the Supreme Court ordered the company to pay approximately Rs 17.5 billion.
According to officials, the company has managed to deposit only about Rs 2.9 billion so far. Furthermore, the report addresses the collection of substantial sums from the sale of apartments.
The Joint Investigation Team (JIT) has highlighted the roles of the developer and relevant government officials, recommending further legal action. The report also identifies Abdul Hafeez Shaikh as a central figure in the alleged scandal.
Action against the BNP Group
Following approval from the Federal Cabinet, it has been recommended that the BNP Group be blacklisted from future government projects and that legal proceedings be initiated against it.
It has also been decided to refer the matter to the National Accountability Bureau (NAB) for further investigation into financial irregularities and potential criminal offenses.
The government has decided to move the project forward through a fresh, transparent auction process. The building will be converted into a five-star hotel, in line with its original intended purpose.
Assurance of refunds for apartment buyers
An important decision has also been made regarding the future of those who invested in this project.
According to the government, genuine buyers will not have to bear the consequences of the alleged irregularities committed by the developer and government officials. It has been recommended that the affected individuals be reimbursed for their original investments.
The refund mechanism also includes the payment of returns exceeding standard bank interest rates. The objective of this initiative is to compensate for the financial losses of investors who had invested their savings into this project.
The government has included the conversion of this project into a five-star hotel—along with taking action against those responsible—as part of its future course of action.
Consequently, this project—situated at a prime location in Islamabad—has once again come under government oversight. The focus will now be on the outcome of the investigations into alleged financial irregularities, and on when the affected investors will receive their money back.
Also Read: One Constitution Avenue Scam: JIT exposes how PTI’s favourite tycoon looted billions
