NAB’s Ashiana scam is really scandalous

ISLAMABAD: The NAB’s latest “success story”--Ashiana scandal--is a case of the two housing contract models both of which were cancelled by the Punjab government without any loss of even a single penny from the public kitty or the state land, sources said.

In this scandal, which on Friday reached its climax with the arrest of Shahbaz Sharif, NAB had already arrested Ahad Cheema on Feb 21, 2018, (almost eight months ago) and Fawad Hasan Fawad in the first week of July 2018 (over three months ago) but no reference was made as yet raising serious questions both about the competence and the authority of NAB and facts of the case.

For the Supreme Court of Pakistan--which only last week reprimanded the NAB while hearing the ex-MD PSO case and asked it what it had dug out against Ahad Cheema and Fawad Hasan Fawad--the Ashiana scam could be a test case to see if the Bureau is really working freely and fairly without any element of political witch-hunt that has been its hallmark in the past. The Ashiana-e-Iqbal was touted as corruption of Rs14 billion through illegal award of contract to ineligible contractor but sources said the claim of corruption is a gross misstatement of fact as Ashiana-e-Iqbal project is not a works and procurement contract, which requires payment by government for construction of apartments but was a public-private partnership project requiring the private developer to use its own funds to finance the construction of apartments.

Interestingly, no payment of public fund was made even to the “ineligible contractor”, no work was ever started on the government land, no transaction either of monetary or related to land occurred as the second contract was also cancelled, and the land still vests with the government of Punjab. Yet, NAB sees a scandal in it. Rs14 billion being the projected cost of investment of the private developer to develop plots and construct apartments has been illogically presented as the quantum of corruption. It has moreover been claimed that Rs15 billion is the ‘opportunity loss’ of the government as the project could not be completed. If one buys this argument then responsibility for every incomplete project or the project declared feasible but never taken up for any reason would qualify for a NAB reference.

Sources explained that Ashiana- e- Qauid, Lahore, is essentially two project models. The first model was traditional contractor built model from 2012 to 2013 in which government had planned to build the houses for the low income people for which a tender for development of infrastructure on land near DHA, Lahore, was formulated, tenders were floated, but, soon after bidding, the then chief minister Shahbaz Sharif received complaints that through connivance of engineers of Punjab Land Development Company (PLDC) tenders were doctored and contract awarded to Latif and sons. The CM got the matter inquired through well reputed Tariq Bajwa, the then secretary finance Punjab and presently State Bank governor, who proposed a further probe into the matter. Consequently, the CM referred the matter to Anti-Corruption. This happened in the last two weeks of his first tenure. The cancellation of the contract of (Latif and sons) was done by the PLDC Board in September 2013. The aggrieved contractor approached the Lahore High Court against the PLDC decision. The LHC ordered arbitration as per the contract between the two parties as a result, the contractor was awarded Rs5.9 million as compensation. Hence the first contract ended.

The second model was conceived in 2014 after the 2013 elections during the second tenure of Shahbaz Sharif. Scraping the old model of constructing houses through contractors, the new model adopted the private public partnership concept. The new model of private public partnership was adopted after the Punjab assembly legislated a PPP Act, 2014, to provide legal sanction for this initiative. Under this law international tenders were floated, and a joint venture of three companies called CASA Builders got the PPP project to build houses through private sector investment on government provided land. The new private sector partner CASA (who is being linked to Saad Rafique and Paragon builders) failed to perform to the satisfaction of the government and after six months, in 2015, the PPP contract was also cancelled and land retrieved from the private investor and now vests with the government of Punjab.

So, not a penny of loss was incurred to the government in this venture. In case the then government had not acted against any of these contractors, it would have attracted action under the NAB law. According to a source the only expenditure incurred on the project was for preparation of feasibility, clearance of land and advertisements.