Construction agreement for Sector G-13 apartments terminated

ISLAMABAD: The Federal Government Employees Housing Authority (FGEHA) has decided to terminate partnership with a construction firm and management partner to revive the three-year-old residential project, Lifestyle Residency Apartments, in Sector G-13, Islamabad.

The decision was taken in a recent meeting of Housing Authority’s executive board. Federal Minister for Housing and Works Riaz Hussain Pirzada chaired the meeting.

The meeting was informed that work on the project was stalled since 2021. Due to delays, the construction cost has increased from Rs14 billion to Rs17 billion.

Sources said FGEHA had decided to construct 2,900 residential apartments for federal employees in Sector G-13. Two plots of ten acres and five acres were allocated for the project. A partnership agreement was signed with a private firm for the project in 2009.

The private firm approached the court in 2012. In 2014, a new agreement was reached between the authority and the private firm through out-of-court mediation. After disputes were settled, the project was re-launched in 2016. In 2017, a tender was floated for phase one, which has 2,200 apartments in category A, B, C and D.

The project was to be completed in four years, in 2021. But only 70pc of work could be done after four years. Since then, work on the project is stalled. The contractor has left the work. The salaries of employees of the private firm, which is a partner of the authority under joint venture, are still being paid. Approximately, Rs220 million has been spent in three years. The private firm is also paid four percent management service charges under the agreement. The allottees of the apartments, who are federal employees, have so far paid Rs12.5 billion. They, however, have not yet been able to get possession of the apartments, which is causing a lot of frustration.

The allottees are pressurising the authority to take over management of the project and complete it in a timely manner. The FGEHA sent a summary to the executive board, which was approved.

The board has approved termination of joint venture with the private firm. The board, however, directed all legal requirements be fulfilled for this. The authority officials said there was a clause in the agreement to terminate the contract.