ISLAMABAD: A government investigation has uncovered alleged serious irregularities in Islamabad’s controversial One Constitution Avenue project, raising questions about land allocation, bidding procedures, financial transactions and regulatory approvals.
The findings are part of a Joint Investigation Team (JIT) report that examined how a property originally approved for a five-star hotel and serviced apartments was developed into a residential complex in the federal capital’s sensitive Red Zone.
The federal cabinet has approved the investigation report and its recommendations. The government has also announced plans to convert the disputed building into a five-star hotel and compensate affected investors.
The investigation involved representatives from the National Accountability Bureau (NAB), Federal Investigation Agency (FIA), Federal Board of Revenue (FBR), Securities and Exchange Commission of Pakistan (SECP), Intelligence Bureau (IB) and Inter-Services Intelligence (ISI).
JIT Identifies Alleged Irregularities in CDA Land Auction
According to the investigation, the Capital Development Authority (CDA) auctioned a 13.5-acre plot in 2004–05 for approximately Rs4.8 billion.
The land was originally designated for a five-star hotel with serviced apartments. However, the JIT questioned several decisions made during the auction and subsequent development process.
The report alleged that the original bidding process was manipulated and that the first auction was cancelled without the required approval from the CDA Board.
Investigators also questioned why the lease was eventually awarded to a company that was not part of the successful four-member bidding consortium.
Another major concern involved the removal of a bank guarantee requirement just three days before the lease agreement was signed.
The JIT also identified former finance minister Abdul Hafeez Sheikh as an alleged central figure in the case. Former CDA chairman Kamran Lashari and several other officials were also named in connection with the alleged irregularities.
These findings represent investigative allegations and do not amount to criminal convictions.
Bank of Punjab Transactions Raise Questions
The JIT also examined the financial arrangements involving the Bank of Punjab (BOP).
Investigators raised concerns about the bank’s financing arrangements and alleged violations of relevant financial procedures.
The report questioned the transfer of 25,420 square feet of space within the development to the bank without informing the CDA.
It also highlighted the sale of approximately 254 apartments through 99-year subleases.
According to the investigation, these transactions raised concerns because the original approval covered a hotel and serviced apartments rather than a conventional residential development.
The findings have brought the project’s financial arrangements and regulatory oversight under further scrutiny.
Security Clearance Concerns Over Islamabad Red Zone Project
The project’s location in Islamabad’s high-security Red Zone also became a major part of the investigation.
The JIT raised concerns that the development proceeded without obtaining all required security clearances.
Investigators highlighted the potential security implications of residential apartments overlooking sensitive government buildings and surrounding areas.
The report recommended stronger security procedures for construction projects located near important government installations.
It also called for mandatory clearance from relevant authorities before approving similar developments in sensitive parts of the capital.
Supreme Court’s Rs17.5 Billion Payment Order
The One Constitution Avenue dispute has also involved lengthy legal proceedings.
In 2019, Pakistan’s Supreme Court directed the developer to pay Rs17.5 billion in instalments over eight years.
However, according to reported findings, only approximately Rs2.9 billion had been deposited against the ordered amount.
The Islamabad High Court subsequently upheld the CDA’s decision to cancel the plot allotment over payment defaults.
These developments further complicated the project’s ownership, financial obligations and legal status.
Government Announces Compensation for Affected Investors
The federal government has announced that genuine investors affected by the controversy will receive compensation.
According to the government’s announced plan, eligible buyers will receive refunds of their principal investments, with additional interest calculated using the Karachi Interbank Offered Rate (KIBOR).
Authorities have indicated that the compensation process will aim to protect investors who purchased apartments in good faith.
However, a complete payment schedule and individual compensation amounts have not yet been specified.
The JIT also recommended blacklisting the developer from future public-sector projects and conducting a fresh, transparent auction of the property.
It further proposed legal action against individuals found responsible for the alleged violations.
One Constitution Avenue to Become Five-Star Hotel
Following the cabinet’s approval of the JIT recommendations, Interior Minister Mohsin Naqvi announced that the government had obtained legal possession of the building.
He said the existing development would be converted into a five-star hotel in the coming months.
The government also plans to engage an internationally recognised hotel chain to operate the property.
The Capital Development Authority will oversee the building’s affairs during the transition.
The proposed conversion would restore the project’s originally approved purpose after years of controversy surrounding its development and sale of residential apartments.
Government Plans Major CDA Reforms
The investigation has also recommended institutional changes within the Capital Development Authority to prevent similar controversies.
Proposals include reviewing the CDA Ordinance, establishing an independent Master Plan Commission and digitising official land and development records.
The JIT also recommended rotating officers in important planning, enforcement and building control departments every two years.
Additional proposals include independent third-party reviews of auctions, contracts and development approvals.
The National Accountability Bureau has also been directed to investigate the individuals named in the case and proceed under the relevant laws.
Foreign Ministry Objects to Project’s Name
The Ministry of Foreign Affairs reportedly raised objections to the development’s use of the One Constitution Avenue name.
According to the investigation findings, the ministry maintained that the Constitution Avenue address was associated with its own premises.
The JIT therefore recommended renaming the development as part of the broader corrective measures.
The controversy surrounding One Constitution Avenue has highlighted serious questions about public land management, government oversight and investor protection in Pakistan.
With the federal cabinet approving the investigation’s recommendations, the next phase will involve legal proceedings, investor compensation and the proposed conversion of the property into a five-star hotel.
In other news read more about: One Constitution Avenue To Be Converted Into Five-Star Hotel, Says Mohsin Naqvi
The final determination of individual responsibility will depend on further investigations and legal proceedings.
