Deal that caused 4.8 bn loss ex-DG ISI

Deal that caused Rs4.8 bn loss Lt-Gen Javed Qazi passes the buck to ex-finance minister

By: Rauf Klasra

ISLAMABAD: Former Railways Minister and ex-DG ISI Lt Gen Javed Ashraf Qazi had tried to shift his responsibility to former Finance Minister Shaukat Aziz in a multi-billion rupee scam of leasing out 141 acres of prime land of Pakistan Railways (PR) in the heart of Lahore to a Malaysian firm (Royal Palm & Golf club).

It has also been revealed that within three months of inking the deal, the same executive committee enhanced the total area of land from 103 acres to 141 acres, brought down annual land usage charges from Rs52.43 to only Rs4 per square yard, and above all increased the lease period from 33 to 49 years. The revised deal alone caused a loss of Rs4.82 billion to PR, thanks to three top military generals who were at that time at the helm of railways affairs.

The report prepared after two years of hard work by the parliament’s special committee comprising of 20 MNAs has been placed before the National Assembly (NA) with the recommendations to put three army generals-General Qazi, General Saeed Zafar and General Hamid Hassan Butt and former secretary Railways Khursheed Ahmed Khan and four other officials of the Railways Ministry on trial after confiscating their properties to recover the financial losses to the tune of Rs25 billion, which according to the findings of the special committee were lost in the this faulty deal struck in 2001 during the reign of Pervez Musharraf. The parliamentary committee has recommended scrapping of the faulty contract with the present management of the Royal Palms Lahore, and said that if fresh auction of the land was conducted, it might fetch Rs40 billion and give a new lease of life to the PR facing a colossal loss of Rs32 billion.

This correspondent called Lt Gen Javed Ashraf Qazi, but he did not give his version. The special parliamentary committee to probe this scam was formed in April 2008 by Speaker Dr Fahmida Mirza after a resolution was moved in this connection. MNA Nadeem Afzal Chann was appointed its Chairman with members from all the parties sitting in the NA.

According to the report the committee summoned Javed Ashraf Qazi and enquired about government policy to verify the credentials of the overseas parties interested in some projects in Pakistan and whether credentials of the party in case were got verified through Board of Investment, Commercial Attache, Pakistan’s Honorary and Commercial Consulates and whether or not this was done in case of the Malaysian firm in question. He was further asked whether official channels were used by the Ministry of Railways before doling out PR land in Lahore to a foreign party.

According to the report General Qazi replied that the ex-finance minister was contacted who told him that it was a genuine party and recommended to welcome its investment. He shocked the committee by telling that all this was verbal and there was nothing in black and white. The committee has observed that in the estimation of the Gen Qazi this had completed the process of verification.

When a bureaucrat close to the then finance minister was contacted, he said, on the condition of not being named, that he had worked with many finance ministers and it is totally wrong to say that the deal was made by a minister on the verbal verification by another minister. He said all ministers and secretaries are bound to follow rules and laws while concluding any deal. He said the former railway minister had just shifted his own responsibility to the former finance minister. He said even if the former finance minister had recommended the party, the former railways minister should have ignored it and followed the rules. He said it was just an attempt to involve the former finance minister in the scam.

The report has also pointed out the post haste in which the deal was signed. According to the official record, on April 20, 2001 Mr Waseem from Directorate of Railways Lahore wrote a letter No DM-1 C-0013 addressed to Mr Khalid Naqi and contained the bids of parties for a 33-year lease of the land. Mr Naqi prepared an approval of the bids and brought this letter along with all relevant record to Islamabad on the same day where members of the Executive Committee of PR had been waiting for him. This letter mentioned licensing fee as Rs2.5 million, land uses charges Rs21.6 million to be increased by 15 per cent every three years. The Executive Committee accorded its approval on the same date.

But the deal was revised and land usage charges were reduced from Rs52.43 per square yard to Rs4 per sq yard besides increasing area from 103 acres to 141 acres and period of lease from 33 years to 49 years, thus giving huge benefit to the foreign firm at the cost of public interest. Phase two was also introduced in the second approval which was not mentioned anywhere before not even in the advertisement. The PR administration could not answer as to why the second approval was given and that too completely disadvantageous to public interest. The railways administration could not provide minutes of the meeting of the Executive Committee in which the second approval was given and when and where it was held.

The committee also observed that the advertisement was simple and non-professional for a golf course of international standards. The advertisement did not mention the lease period, criteria for interested parties or ask for any business plan. It was silent on whether the companies or consortium should be registered. It did not ask if any foreign investor was interested. To all intents and purposes there was nothing in the advertisement except that 103 acres of land was to be leased and office telephone numbers of Mr Shafique Ullah were given as contact numbers. The committee observed that this was a dodgy advertisement as no relevant information about experience and economic health nor conditions for qualifying to run a golf course were asked. However, one thing was added that PR management was not only looking for lease/rentals but also for joint ventures. This advertisement had provided almost similar details, however a sentence was added which was seeking experience in financing, development and management of golf course with recreational facilities, here they added “and/or 5 star hotel.”

The report said, that there is no mention of construction of hotel in three advertisements. It was not clear as to how this small addition was converted into a full-fledged proposal for a hotel and the second phase of the project later on.

The committee report said during meeting in a response to a question regarding mechanism adopted to verify the experience of the said party, Gen Hamid Hassan Butt had replied that he himself was a golfer and that there were some highly experienced people. Upon insistence by the committee regarding the pre requisite, General Hassan Butt replied that the “taste of the pudding is in the eating.”

Thus, the then railways administration did not follow any officially prescribed procedure for the verification of the documents submitted by the successful bidder. The same question was replied by Rizwan Bhatti, Director Marketing in these words: “Golf course is in excellent shape which is a proof in itself that the party selected for the purpose was capable of doing it successfully.” This clearly established that no required procedures were followed to deal with this multi billion deal in a professional and transparent manner.

Courtesy: The News

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