FIA probing: Rs2.8bn housing scam, Senate panel told

ISLAMABAD: The caretaker federal government transferred the 8,400-kanal Park Road Housing Scheme in Islamabad to the Defence Housing Authority (DHA) after nearly Rs2.5 billion in corruption surfaced in the project.

The revelation came to light during a briefing to the Senate Functional Committee on Problems of Less Developed Areas, chaired by Senator Agha Shahzaib Durrani. During the session, NESPAK Managing Director Zargham Eshaq Khan and Federal Government Employees Housing Authority (FGEHA) Director General Captain Muhammad Zafar Iqbal (retired) confirmed both the corruption and the subsequent handover of the project to DHA.

According to them, only 7.5 percent of the project had been completed after nine months of work. FGEHA Director General Zafar Iqbal informed the committee that an inquiry had been initiated and referred to the Federal Investigation Agency (FIA). There was a withdrawal of Rs710 million based on fake bank guarantees, along with a claim of Rs1.4 billion through an Interim Payment Certificate (IPC).

The Park Road Housing Scheme, a joint venture between FGEHA and the Supreme Court Bar Association (SCBA), is located near Comsats University Islamabad, covering the revenue estates of Tamma and Mariyan.

The project consists of 4,781 plots, with 2,088 allocated to FGEHA and 2,693 to SCBA members. However, only 2,000 of the total 8,400 kanals are currently occupied. Senator Aimal Wali Khan suggested that the situation indicates the involvement of a “big chain,” including officials from NESPAK, FGEHA, the contractor, and finance department officers. He called for a thorough investigation and accountability, including financial recoveries from those implicated.

Senator Aimal Wali said that when things started to worsen and irregularities surfaced, the (caretaker) government sought to save its face by exiting the project and handed the project over to DHA.

He further said that during the land acquisition process, payments were made to fraudulent individuals instead of the rightful landowners.

When asked by the committee chairman when the scam was uncovered, Iqbal replied that the revelations came during the tenure of the caretaker government, led by then-Prime Minister Anwaar Ul Haq Kakar, who was also the minister of the Housing Ministry at the time.

Senator Aimal Wali Khan questioned the contractor’s identity and origin, to which the official replied that the contractor and the bank handling the finances were both from a province. The incumbent DG also noted that his predecessor was from the same province. Khan expressed concerns that these connections point to a broader network of collusion.

The panel observed that National Engineering Services Pakistan (Pvt) Ltd (NESPAK), which served as the project consultant, also failed to fulfill its responsibilities. Although NESPAK became aware of the malpractices months before they came to light, the organization remained silent. Notably, the location of project blocks was altered under NESPAK’s watch, further complicating the situation, Khan noted.

According to Iqbal, substantial embezzlement was uncovered, including forged payments for work that was never carried out. An inquiry report revealed that Rs710 million was wrongfully withdrawn using a fraudulent bank guarantee, allegedly in collusion with the project director and other individuals. He also highlighted discrepancies in the IPCs, with one certificate ballooning to Rs1.4 billion in just 40 days, compared to Rs283 million over the prior eight months — an anomaly that triggered scrutiny from the Finance Ministry.

MD NESPAK informed that a fact-finding committee has been established to investigate the allegations, with show-cause notices issued to three officers and four others suspended pending the completion of the inquiry.

Senator Shahzeb Durrani inquired whether the Ministry of Housing had conducted any investigation into the matter. The Director General of the Federal Government Employees Housing Authority (FGEHA) responded that the ministry had indeed conducted an inquiry, which found the project director guilty, leading to his dismissal and the referral of his case to the Federal Investigation Agency (FIA).

Senator Durrani remarked that such a project could not have been orchestrated by one individual alone, suggesting the involvement of other officials. The committee directed the Ministry of Housing to present the report from the in-house inquiry conducted by the ministry.