ISLAMABAD: Privatisation Commission (PC) has sought fresh information from Capital Development Authority (CDA) prior to privatisation of the Jinnah Convention Centre (JCC), Islamabad.
According to the documents available with Business Recorder, the PC asked the CDA to issue an order for conversion of the status of JCC property from “Amenity” to “Commercial” as approved by the federal cabinet of Pakistan Tehreek-e-Insaf (PTI) government.
It also asked the CDA to revise the allotment letter of the JCC if required under the Rules, Regulations, etc., of the CDA; cost estimation report on seven different scenarios developed by financial advisors of PC, and layout plan (LOP) of JCC property and any suggested changes to the approve transaction structure.
The commission also asked the chairman CDA to suggest improvements in the transaction structure in coordination with the PC.
The CDA administration requires a formal undertaking from the PC stating that the costs for the provision of all amenities will be borne by the PC or the successful bidder.
Subsequently, PC sent a letter to CDA on January 25, 2022 stating that the expenditure on relevant infrastructure facilities shall be borne by the successful investor and there will be no financial liability on CDA or PC.
One of the CDA Board Members insisted that the CDA should build a case for the federal cabinet that clearly highlights its apprehensions on the transaction. This is due to the fact that the CDA believes that the property is being treated as an island within CDA and the independent bye-laws devised by the cabinet for a particular project will convert it into a concrete jungle.
The CDA held a board meeting on February 16, 2022 to discuss the JCC transaction, wherein PC’s letters and deliverables from CDA were discussed.
Earlier, a summary was also placed before the CDA Board. During discussion it was observed that in the light of the CDA Board’s decisions on November 25, 2021, the PC had to present all the observations raised therein by the CDA Board before the federal cabinet, which could not be presented to the federal cabinet. The board reiterated its concerns as already raised vide the CDA Board’s decision on July 26, 2021 and November 25, 2021 regarding the privatisation of the JCC.
After due deliberations and on the basis of information/ inputs of the summary, the board decided to request the federal cabinet for an audience to present the board’s viewpoint and concerns regarding the JCC’s privatisation proposals by the PC.
It was further decided that Nayyar Dada and Ali Asghar will present the viewpoint and concerns in this context on behalf of the CDA Board.
PC issued EOI for investors on March 12, 2021.
In response, 22 parties showed interest, of which, 13 parties submitted their statement of qualifications (SoQs).
On August 11, 2021 twelve interested parties were pre-qualified by the PC Board.
Subsequently to pre-qualification, the data room was to be opened for buyer side’s due diligence.
Earlier on September 9, 2021, the PC learned that the CDA Board in its minutes of meeting held on July 26, 2021, CDA Board raised certain observations (contrary to the approval of the federal cabinet and the CDA’s no objection earlier issued).
After various letters from PC addressed to the prime minister, finance minister, secretary, Interior Division and chairman CDA, PC was invited to attend the CDA Board meeting held on November 25, 2021, and again raised serious observations on the transaction.
The centre comprises 7.59 acres of land with a built-up area of 4.13 acres. The CDA has been maintaining the JCC building by renting out the facilities to both public and private sector organizations for different activities. Average loss to the government is Rs36 million per annum. It was approved for privatisation in May 1997 by the Council of Common Interests (CCI).
Again in October 31, 2018, the Cabinet Committee on Privatisation (CCoP) approved the sale of JCC as part of the federal government’s active privatisation programme.
In May 2019, the Economic Coordination Committee (ECC) approved Rs1.14 billion disbursement for the MoI to purchase JCC from CDA. In July 2019, the CDA issued allotment in favour of the Ministry of Interior (MoI). In December 2019, the FAC were appointed (Ey Ford Rhodes, Haidermota & Co and Oceanic Surveyor). On August 21, 2020 CCoP approved transaction structure which included CDA’s input. On September 1, 2020 the federal cabinet ratified the CCoP’s decision.
Copyright Business Recorder, 2022