The federal government has decided to turn Islamabad’s One Constitution Avenue, originally approved as a five-star hotel but later converted into residential apartments and commercial spaces, back into a hotel after a Joint Investigation Team (JIT) found irregularities in the project’s bidding process and alleged collusion between developers and Capital Development Authority (CDA) officials.
Planning Minister Ahsan Iqbal announced the decision on Wednesday after the JIT submitted its findings to the federal cabinet, which approved the report. Information Minister Attaullah Tarar and State Minister for Interior Tallal Chaudhry also attended the press conference.
Iqbal said that the investigation involved the National Accountability Bureau (NAB), Federal Investigation Agency (FIA), Federal Board of Revenue (FBR), Securities and Exchange Commission of Pakistan (SECP), Intelligence Bureau (IB) and Inter-Services Intelligence (ISI).
According to the minister, the JIT found that the project involved a manipulated bidding process, violations of rules and the removal of bank guarantee conditions to benefit the developers. He said that the report also held the CDA complicit in the matter and found that the company awarded the lease had no rightful claim to it.
The project received approval as a five-star hotel around two decades ago but later became a residential and commercial development.
Iqbal stated that the JIT identified Abdul Hafeez Sheikh as the alleged mastermind and found him to be in collusion with CDA officials, including former chairman Kamran Lashari, Dr Faisal Awan, Azhar Ali Chaudhry, retired Brigadier Nasrullah and Rai Nawaz Kharal.
The minister added that the scheme caused losses to the national exchequer, while those involved gained financially and buyers lost their invested capital. The JIT recommended blacklisting Sheikh and his company from future public projects and initiating proceedings against him.
Iqbal also stated that the JIT had also recommended renaming the building, arguing that its existing name, One Constitution Avenue, matched the address of the Finance Ministry and had been used for marketing purposes.
He pointed out that the government had a responsibility to protect people who lost money in the project and take action against those found involved in fraud.
Under the proposed compensation arrangement, affected buyers will receive refunds of their principal investments, while payments will be adjusted against KIBOR interest to prevent financial losses.
Meanwhile, Interior Minister Mohsin Naqvi confirmed that the government had regained legal possession of the building following the cabinet’s approval.
Naqvi stated that the government’s earlier decision to take control of the property had been portrayed as a crime, despite what he described as an infringement on Islamabad’s land.
He said that the government aimed to convert the building into a five-star hotel within months and planned to reach an agreement with a major hotel chain, citing a shortage of hotels in the capital. He also credited the CDA chairman and the legal team for pursuing the case but said the authority had also been at fault, adding that NAB would determine responsibility.
Naqvi added that the government would make payments to occupants in line with the JIT’s recommendations, describing this as binding after the report. He thanked Prime Minister Shehbaz Sharif, stressing that the premier had assured him that the right decision would be taken.
