Daily Times

ISLAMABAD: The prevailing policy of auctioning plots to meet expenditures is leading the Capital Development Authority (CDA) towards bankruptcy as selling fixed assets to pay recurring costs is not a wise solution in any economic term.

Instead of finding or creating sustainable sources to cover the expenditure of the civic body, the higher ups of the CDA are once again going to auction 25 commercial plots situated at precious locations of the city.

The plots for the upcoming auction include three plots in Sector I-8, six plots in Sector D-12, two plots in Orchard Scheme, four plots in Sector G-9, two plots in G-11, three plots in Park Enclave, one plot in Park Road, one plot in Sector F-11 and three plots in Sector I-11.

The categories of plots being auctioned include commercial, fruit and vegetable markets, economy flats, orchard plots, marriage halls and petrol pumps.

This is not an odd method, but a routine way by which the Authority sells plots to maintain its expenditure, which will ultimately ruin the CDA.

As per the budget document 2015-16, the civic body met its 60 per cent expenditure through the auction of plots or by recovering the balance amount of previously sold plots.

The Authority has generated only 16 per cent budged through other sources i.e. taxes, water charges; whereas, the federal government had also given a loan of five billion rupees to the Authority which was 23 per cent of the last budget.

A financial adviser of the Authority explained: “If we exclude the loan amount from the last budget then we can say that the sale of plots contributed to around 78 per cent of the budget generated through the CDA’s sources and in fact it is a routine figure for the last many years.”

He further clarified that the CDA was a self-generating organisation and the government gives very limited funds, which are around 10 per cent of the total budget.

According to budget documents, the civic body earned 12619.56 million rupees in the last financial year by selling plots, which includes 1236.36 million of commercial plots, 897 million of Blue Area’s plots, 4933 million through balance recoveries against sold plots and 5643.20 through sale of plots in Park Enclave I, II and the Margalla Retreat.

Unfortunately, the Authority sells hundreds of commercial and residential plots each year and spends the whole money on recurring costs and save noting.

It is pertinent to mention here that the sale of fixed assets can only be justified to a limited extent, but the adoption of this practice as a policy would ultimately leave the Authority in a state of abject bankruptcy.

There is a very limited number of plots left behind in old sectors and now the CDA is selling commercial plots in the new sector, which is causing a loss of billions of rupees as the investors are unwilling to pay high prices in unsettled sectors.

“Everyone from the top management to the ordinary worker admits the fact that the prevailing policy is meant to destroy the Authority, but nobody is willing to take a practical step as ad-hocism is on its peak in the CDA,” a director said.

Member Planning Waseem Khan, while responding ro the issue said: “The bar on the joint venture of the Authority with private parties is a major hurdle in creating permanent resources.”

He also informed: “A summery to seek approval for a public private partnership for the CDA is pending in the Federal Cabinet. We will try to get the said approval as it is the only option to overcome this problem.”