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AGP Orders CDA to Probe Auction Irregularities

Pakistan Auditor General shares the suggestions of his department about the CDA auction of Rs 37.82 billion worth of commercial plots for inquiry.

The Auditor General of Pakistan (AGP) advised the Capital Development Authority (CDA) to inquire into the non-transparent auction of 29 commercial plots for Rs 37.82 billion. As per Audit Report 2022-23, the AGP recommends an investigation to fix accountability for irregularities, justify the modifications in criteria for determining base prices, and provide data for calculating the base prices.

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Auction Process Lacking Transparency

The report states that pay orders made out to aspirant bidders for tokens and auction brochures weren’t put in any bank.

The authenticity of such pay orders was not verified by the bank, hence the probability of fake pay orders cannot be ruled out as these pay orders were also accepted at the time of bidding.

Pay orders, commonly known as bank drafts, determine the financial commitment and capability of the participants to pay should they win the auction. Pay orders are commonly used in bid processes.

Criteria and Approval Process

Further, the bids received during open auctions were to be put forth before the CDA Board under the criteria approved previously on June 3, 2011. The Finance Wing, too, was to present information on previous sale prices, General Price Index (GPI), and market trends to aid the Board in evaluating the bids for acceptance or rejection.

Auction Results and Keeping Records

Scrutiny of records from the Director Estate Management-II of CDA revealed that auction results conducted on August 4 and 5, 2021, were approved by the CDA Board during its 8th meeting on August 26, 2021. The auctions were for the bidding of 29 commercial plots in different sectors with varying sizes and land uses, the terms and conditions of which were outlined therein in the auction brochure. The bids for 22 plots, amounting to Rs 37.82 billion, were accepted,d and five plots were deferred due to lack of interest from bidders. One plot was withdrawn due to legal complications.

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Absconding Records and Criticism

Audit reveals that critical records are missing such as the average auction amount calculation, GPI, market price trends, and reserve price determination. It is unclear how the CDA Authority derived the reserve rates. Likewise, nothing in the records stated about the five deferred parcels or the reason for the withdrawal of one plot due to legal issues. Likewise, the sudden change in auction criteria from the highest sales price to the average sale price of the year was criticized as not very wise and market trend criteria.

Conclusion: The AGP’s findings emphasize major transparency issues in the auction process, flagging even more concerns over the integrity and fairness of CDA’s processes.

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