Govt says Islamabad's One Constitution Avenue to be turned into a five-star hotel

The federal government on Wednesday said that a joint investigation team had revealed that Islamabad’s One Constitution Avenue was built on “irregularities and rigging” and announced that the residential building will soon be turned into a five-star hotel.

The building, a skyscraper in the federal capital that houses residential apartments, had its lease cancelled by the Capital Development Authority’s (CDA) due to the company behind the project defaulting on payments. The decision was upheld by the Islamabad High Court (IHC) in April.

The building was initially supposed to be a five-star hotel project; however, instead of functioning as a five-star hotel, it was converted into residential apartments and commercial areas. The IHC’s order led to the mass evictions of residents in May, following which Prime Minister Shehbaz Sharif formed a joint investigation team (JIT) to probe the matter.

Addressing a press conference on Wednesday alongside Information Minister Attaullah Tarar and State Minister for Interior Tallal Chaudhry, Planning Minister Ahsan Iqbal said the JIT presented its report to the federal cabinet today, noting that the project was fraudulent.

He said that the report had input from the National Accountability Bureau, the Federal Investigation Agency, the Federal Board of Revenue, the Securities and Exchange Commission of Pakistan, the Intelligence Bureau and Inter-Services Intelligence.

“They carefully assessed this project and presented the report, and it was approved,” Iqbal said. “The JIT has clearly identified that the project was created based on irregularity and rigging and that the bidding process was manipulated.”

Iqbal added that, according to the report, rules were ignored to provide benefits and the company which was given the lease had no rightful claim.

“In this whole matter, the CDA was found complicit, and similarly, the conditions of the bank guarantee were removed to provide benefits to the developers,” he stated. “The work which was carried out was conducted in a very suspicious manner and the apartments were sold illegally.”

He noted that the project was initially approved as a five-star hotel two decades ago, but later it was turned into apartments.

“The JIT has identified Abdul Hafeez Sheikh, who has been called the mastermind and was found in connivance with CDA officials,” the planning minister added.

“CDA officers such as Kamran Lashari, who was CDA Chairman at the time, Dr Faisal Awan, Azhar Ali Chaudhry, Brigadier (retired) Nasrullah and Marhoom Rai Nawaz Kharal were found to be colluding in fraud,” he said.

Iqbal said that as a result of the scheme, the national exchequer suffered losses, while the aforementioned people “gained financially and defrauded the Pakistani people of their invested capital”.

“The JIT recommended that Sheikh and his company be blacklisted from future public projects, and that proceedings be launched against him,” the minister added.

It was further recommended that the project be reviewed and work undertaken to achieve its original purpose as a hotel.

Additionally, the report recommended that the project be started anew and auctioned in a transparent manner.

“Security clearances and clearances from other institutions should also be sought so that future projects have a steady framework to prevent this type of fraud from happening again,” Iqbal said, adding that fire safety and other protocols must also be ensured.

He added that according to the JIT, the project should be renamed, as the name ‘One Constitution Avenue’ is the same address as the finance ministry.

“They used this address for marketing purposes only,” the minister asserted.

“There will be action taken against those found involved in fraud. The government has a responsibility to protect those who were robbed or swindled.”

Iqbal said it was decided that those defrauded would receive compensation, their principal investments would be refunded, and payments would be adjusted against their Kibor interest “so they do not suffer losses”.

“It was also recommended that the CDA and its ordinance be overhauled, and that an independent master plan commission be formed to shut the door on such fraud in the future,” he announced.

Iqbal added that all of the records must be digitised and officers should be rotated between the state planning, enforcement and building control departments every two years.

“People who have held offices for 20 years and opened offices of fraud. With this constant rotation, it will close the door to these corrupt projects,” he explained.

“In the same way, pre-audit auctions and contracts from third parties will be consulted, and in light of this JIT report, NAB has been ordered to take action against anyone involved in this project, and those who facilitated it as per NAB law,” Iqbal said.

Meanwhile, Interior Minister Mohsin Naqvi also addressed a press conference on Wednesday and said that the government had now regained possession of the skyscraper, vowing to turn the building into a five-star hotel within months.

“In official documents, we always had possession of this building, and after the cabinet’s approval, it is now legally in our possession,” Naqvi maintained.

He regretted that the government’s decision to regain control of the building earlier this year had been portrayed as a “crime”, decrying how “agonisingly” Islamabad’s land had been infringed upon.

“We will try our best to convert this building into a five-star hotel in months,” the interior minister announced, reaffirming that this had been the project’s primary objective.

“There is a severe shortage of hotels in Islamabad. We will soon try to make an agreement with a large chain of hotels and convert this building into a five-star hotel,” he stated.

He commended the CDA chairman and legal team for pursuing this case; however, Naqvi also reproached the CDA for being at fault.

“NAB will tell who is responsible,” he said.

“As per JIT recommendations, we will try to make rightful payments to the occupants,” Naqvi said. “This is binding for us after the report.”

The interior minister said he was grateful to PM Shehbaz, recalling that the prime minister had assured him that the right decision would be taken.

Naqvi further said that a residents’ committee, which was overseeing the building’s affairs, had been abolished. “A CDA member will look after the building’s matters from now on,” he said, reiterating that the hotel would be operational soon and be a “gift to the people of Islamabad.”

Apartments in the residential building are reportedly owned by prominent personalities, including PTI founder Imran Khan, Chaudhry Aitzaz Ahsan, Shandana Gulzar Aurangzeb, former minister Burjees Tahir and former caretaker prime minister Nasirul Mulk.

The project’s financial dispute dates back to the CDA’s 2004-05 auction of the plot for Rs4.8 billion. Instead of developing the site as originally envisaged, the company — BNP Group — constructed around 250 residential apartments and sold them in the market.

In 2019, the Supreme Court directed the company to pay Rs17.5 billion for the project in instalments over eight years. According to officials, however, only around Rs2.9bn has so far been deposited.