One Constitution Avenue Apartments to Be Replaced by Five-Star Hotel; Owners to Receive Original Investment with KIBOR-Based Returns

ISLAMABAD (3D Media): The federal government has decided to scrap the residential apartment project at One Constitution Avenue and restore the building to its originally approved purpose as a five-star hotel. The government has also announced that existing apartment owners will receive refunds of their original investments along with returns calculated at the prevailing Karachi Interbank Offered Rate (KIBOR).

Announcing the decision, Interior Minister Mohsin Naqvi said the government had secured legal possession of the One Constitution Avenue building following the findings of a Joint Investigation Team (JIT) constituted by the prime minister. He said the government was aiming to convert the building into a hotel within the next few months.

Speaking after a federal cabinet meeting, Planning Minister Ahsan Iqbal said the JIT report had been presented to the cabinet and approved after a detailed review.

The investigation team included representatives from 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 Ahsan Iqbal, the report identified serious irregularities in the bidding and auction process, including alleged relaxation of rules to benefit a particular company, removal of the bank guarantee requirement and negligence or alleged collusion by certain Capital Development Authority (CDA) officials.

The report also questioned the eligibility of the company awarded the project’s lease and highlighted alleged irregularities in the legal proceedings and approval process.

The planning minister said One Constitution Avenue had originally been approved as a five-star hotel project but was subsequently converted into residential apartments and sold to investors. He added that the alleged irregularities had caused losses to the national exchequer and affected the financial interests of numerous Pakistani citizens.

He assured apartment owners that the government would refund their original investments along with returns calculated according to the KIBOR rate, with the stated objective of protecting investors’ financial interests.

Ahsan Iqbal further said the JIT had identified former finance minister Abdul Hafeez Shaikh as an alleged central figure in the matter. It had also examined the roles of former CDA chairman Kamran Lashari, Dr Faisal Awan, Azhar Ali Chaudhry, retired Brigadier Nasrullah and the late Rai Nawaz Kharl, among other relevant individuals.

The JIT has recommended blacklisting the company involved from future government projects and initiating legal proceedings against those found responsible. It has also proposed restoring the building to its originally approved purpose, conducting a fresh and transparent bidding process, and obtaining the necessary clearances from relevant institutions, including security agencies.

The minister said NAB had been directed to conduct a comprehensive investigation into the roles of the individuals named in the report, alleged facilitators and those who may have provided patronage, and to proceed under the applicable NAB laws.

The JIT has also recommended changing the name of One Constitution Avenue, arguing that the name was used for marketing purposes. Ahsan Iqbal pointed out that the first building located on Constitution Avenue belongs to the Ministry of Foreign Affairs, which has also asserted its claim over the address.

He said successive PML-N governments had continued investigations into the project and maintained that no compromise had been made in pursuing the matter.

To prevent similar irregularities in future, the government also plans to digitise the records of the CDA and other relevant institutions, introduce regular rotation of officials, implement third-party pre-audits, strengthen transparent contract management and enforce fire safety and other security regulations.

While the government has announced refunds of original investments with KIBOR-based returns, details regarding the payment mechanism, disbursement timeline and practical schedule for converting the building into a five-star hotel have yet to be announced.