NAB starts probe into Rs25b Grand Hayatt Tower scam

ISLAMABAD: The National Accountability Bureau (NAB), Rawalpindi, has started investigation against officers/officials of the Capital Development Authority (CDA) and M/s BNP Pvt Ltd regarding allegedly misuse of authority by them in allotment of plot to M/s BNP Group for construction of Grand Hayatt Tower at Constitutional Avenue, Islamabad.

The investigations were initiated by the Rawalpindi NAB following getting approval of NAB Chairman Justice (R) Javed Iqbal for initiating a formal investigation in Rs25 billion scam.

Interestingly, few days ago the Federal Investigation Authority (FIA), which is investigating the case, has dropped charges against the former CDA chairman, Kamran Lashari, ex-members of the CDA board as well as the owner of a private firm which paved the way for regularisation of the controversial lease of land for Grand Hyatt Hotel.

According to sources, The FIA, in its challan, had declared it to be a scandal worth Rs25 billion and alleged that the land was allotted for the Grand Hyatt Hotel in connivance of the CDA officers. The person allotted the land deposited only 15 percent of the total cost and even then he was allowed to seek a huge bank loan. The allottee, instead of building service apartments, built luxury apartments and sold them. In accordance with the agreement, the hotel was not built rather the apartments were constructed. The plot allottee did not even return the bank guarantees.

It is to be mentioned here that the case was actually identified by the auditors of DAGP during the audit of CDA by Audit, Works (Federal) Islamabad and on the basis of audit paras raised by the auditors of DAGP, PAC in its meeting held on 28-29.05.2014, discussed the irregularities in Grand Hyatt Hotel lease/construction and issued directions to refer the case to the National Accountability Bureau (NAB) and Federal Investigation Agency (FIA) to probe the matter and arrest those who are involved in this deal within one day and also to provide a copy of the case to PAC within three working days and to initiate action against the CDA officials who inked the deal with BNP Group, and a case should be registered against the then CDA officials involved in this deal and directed the principal accounting officer to furnish information regarding any change approved the Master Plan of Islamabad. PAC also directed to conduct structure assessment and soil testing from the Engineering Council as against the structure design for constructing 13-storey Tower, the owners were constructing a 33 stories building and to submit a comprehensive report to PAC within one month and directed the principal accounting officer to examine with the help of the FBR, the Income Tax paid/payable by the purchasers of the flats worth billions of rupees. The issue was also discussed in another PAC meeting held on 31.08.2016, wherein the committee took serious note of the facts and figures revealed during the briefing regarding the 1st bidding process of Grand Hyatt Hotel and substantial changes made in the subsequent bidding documents/ advertisement and directed the secretary, Capital Administration and Development Division, to provide a comprehensive report along with original relevant documents in the light of PAC meeting to the committee within a week.

Various violations were pointed out by audit as under: hotel, namely “Grand Hyatt Islamabad” consisting of 47 floors, including roof top with height of 710 feet without consulting and obtaining NOC from the Civil Aviation Authority (CAA) and Pakistan Air Force (PAF). As per approved Bye-Laws, height of the building of Grand Hyatt Hotel was fixed as 65 feet (6-storeys) with reference to the floor level of the existing building of Convention Centre. Later on, 47-storeys height was allowed without the approval of the CDA on the request of purchaser revised the payment schedule of Grand Hyatt Hotel through post bid change in the contract and extended a favour to the allottee. The commercial plot was auctioned for construction of five star hotel (Grand Hyatt) at lesser value as compared to sale of similar commercial plot (Centaurs) resulting into a loss of Rs7,492.78 million. The Joint Venture/Group was changed after declaration of the bid for sale of plot of Grand Hyatt Hotel, rendering the process of pre-qualification non-transparent. Mandatory bank guarantee was not obtained for 85% balance payment of Rs4,009. 99 million of Grand Hyatt Hotel

PAC, in its meeting held on 14.10.2016, directed the PAO to take action against the officers/officials concerned and provide the relevant documents of this issue within a week. In pursuance of audit findings and PAC directives, the CDA Board, in its meeting held on 29.07.2016, cancelled the lease agreement/allotment of M/s BNP.