Malam Jabba scam: NAB disposes of case without further action

PESHAWAR: The National Accountability Bureau (NAB) took three-and-a-half years to complete the investigation into the Malam Jabba scandal and the case was disposed of without any further action. NAB has directed that the case should be referred to KP Chief Secretary for an investigation into irregularities in the awarding of the contract.

The Malam Jabba scandal surfaced on January 7, 2018. The NAB chairman, after declaring it a classic example of corruption and misuse of authority, ordered an inquiry on January 9, 2018.

The glimpse of the Malam Jabba scandal is very interesting. The provincial government was given ample time to rectify the irregularities. Serious questions are being raised over the NAB's performance if there was nothing found in the case, why the case was kept pending for three-and-a-half years. Another important aspect of the case is that, in 2020 on the direction of Peshawar High Court, a high-level official committee submitted six-page report that the 270 acres of land in Malam Jabba belonged to the Tourism Department and its entry to the revenue record was erroneous.

The former head of Ehtesab Commission, General (R) Hamid Khan had raised serious objections in his letter, IW/EC/MalamJabba/ 01, on April 15, 2015, saying the bidding process was suspicious. The Samson Company submitted the amount late and it had no experience in the hotel industry. The letter said that the lease contract was given to a favourite company. Similar suspicions were expressed by the CM Inspection Team head in a letter (PIT/2015/ INSP/27/43-0541) on February 26, 2016. However, nothing came out as the Ehtesab Commission had become redundant, while the CM Inspection Team’s report had been thrown into the dustbin. According to documents, former CM Pervez Khattak, in two meetings on October 11 and December 19, 2013, decided to contact the Australian government or the PAF for the Malam Jaba project, but the Tourism Department did not contact them. Documents revealed that neither any feasibility nor any technical, financial, and prequalification criteria were set for the project.

According to events, the KP government decided to construct a hotel at Malam Jabba (Swat) on February 27, 2014. Under the government ToRs, a five-star hotel was to be constructed on five acres of land, and under the BOT (build, operate & transfer) terms and conditions, the owners of the hotel were to get access to 270 acres of the Forest Department lands. The Board of Investment & Trade (BoIT) released an advertisement on March 3, 2014, asking companies to submit the Expression of Interest (EoI) in the project. The interested parties were asked to submit proposals under BOT terms and conditions. The due date to submit tenders was March 31, 2014. It was extended to April 10, 2014, and a notification was issued on April 14.

Seven companies submitted the EoI letters, including Waqas Traders Islamabad, Zafarullah Khan Peshawar, Trade Source Lahore, Samson Group of Companies Lahore, SMP Islamabad, Parks Pakistan Lahore, and Test Enterprises Lahore.

The Samsons Group of Companies submitted its tender after March 31 and the announcement to extend the due date was made only on the website, which is a violation of Section 27 of PEPRA rules. The company offered Rs60 lakh for the Malam Jabba Hotel at a rate of Rs12 lakh per Acre. Later, the company offered two bids of Rs60 lakh each for the hotel and the chairlift that was against the rules.

The sub-committee short-listed three companies on the basis of technical assessment and gave Parks Pakistan 76.5 points, SMP Islamabad 63 and Samson Group of Companies 60.5 points. The Samsons Group of Companies had no experience to run a hotel or a chairlift. So this company did not come up with the required criteria. Despite that, a sub-committee gave 60.5 marks to the company as per technical criteria. However, when the financial details of the companies were taken into account, Samson Group was declared number one with 72.35 points.

Interestingly, Samson deposited Rs6 million with the application on April 8, and then deposited Rs12 million on May 15, after the lapse of 35 days of the deadline. However, the sub-committee accepted it and gave final approval on May 26, 2014. The company was awarded a lease of 33 years extendable for further 33 years.

According to documents, Law Secretary Muhammad Arifain objected to a lease period of 33 years, saying the lease period should be 15 years under the law and it could be extended maximum by another 15 years. However, the Chief Minister relaxed the rules and extended the lease period to 33 years. A written agreement was signed between the KP government and Samson Company. The KP government violated all laws and leased out 275 acres of Forest Department land, instead of the access right of 270 acres on Sept 24, 2014.

Official documents further revealed that three other departments – Environment, Wildlife, and Forests – also objected to the project. However, the Tourism Department neither consulted these departments before leasing out the land nor paid any heed to their objections later on.

The Forest Department had objected to the agreement and said the section 105(1) of the Forest Ordinance says that the forest lands could not be brought into use for any other purpose except for growing of forests or related activities.

After the Malam Jabba lease agreement was made public in 2015, the Forest Department stopped Samson Company from carrying out any construction works on 270-acre protected lands. The company filed a writ petition, No P-340, in the Peshawar High Court on Jan 19, 2016.

The petition requested the court to bar the Forest secretary and district forest officer from interfering in construction works on 275 acres of land, leased out to the company, as it is a violation of the agreement reached with the provincial government. The company said it had spent billions of rupees on construction work of the hotels and installation of the chairlift, and stopping them from work could cost them heavily.

On Feb 15, 2017, the company informed the court that all reservations of the government departments were removed in a meeting on Dec 13, 2016, therefore the petition should be disposed of. On the same date, the PHC disposed of the petition. After opposition by the Forest Department, a notification for the lease of 12 acres and 15 Kanals was canceled under Section 32 of the KP Forest Ordinance on April 3, 2017. On January 5, 2018, the provincial government signed an amended contract which was also against rules and regulations.

Similarly, the Peshawar High Court had passed another order on a petition filed by the Samson Group, seeking the execution of land. The PHC passed a judgment on Oct 1, 2020, and ordered the formation of a committee to submit its report to the government within two months regarding the Malam Jabba land.

A high-level official committee submitted a six-page report that the 270 acres of land in Malam Jabba belonged to the Tourism Department and its entry to the revenue record was erroneous, which was also approved by the cabinet. The committee said the land belonged to the Tourism Department and therefore, it had the right to lease it out for the purpose for which the ex-ruler had provided the land for.

The committee pointed out that the Forest Department had agreed to forgo its claim over this piece of property by de-notifying it as protected forest and its acquiescence was communicated in a summary to the chief minister in December 2016 which was subsequently duly endorsed by the cabinet. The Board of Revenue, however, could not revise its land record due to NAB investigation and subsequent cases in courts, the report noted.

It said that the Tourism Department submitted documents in support of its claim that included a letter of the Chief Secretary of the former Wali-e-Swat, PTDC’s continued usage of the land that the Forest Department never questioned, extensive correspondence by PTDC requesting the provincial government for the mutation of the land and proceedings of meetings held by Commissioner Malakand and DC Swat.

The Forest Department’s claim relied on the entry in the revenue record made in 1984-85 and a forest management plan of 1964. The committee, however, noted that the ruler who had maintained the land although the land was part of the management plan, the same ruler had changed his earlier decision and gave the land to PSL. Wali-e-Swat edicts were laws and rules, it said. Regarding the entry in the revenue record, the committee noted that the entry regarding the land in the revenue record was prima facie erroneous.

Concluding the report, the committee noted that the case was a classic example of miscoordination amongst the various government departments, none of which acted in a professional manner and inefficient communication between the federal and provincial entities.