ISLAMABAD: The Employees Old-Age Benefits Institution (EOBI) has failed to expedite work on its Rs18 billion projects across the country despite orders from the Supreme Court.

On February 25, a three-judge bench headed by Justice Mian Saqib Nisar directed the EOBI to ‘complete the projects without unnecessary delay and hindrance so that profits generated from the projects could be used for increasing the pensions of labour force engaged in the private sector. The court described the meager Rs3,600 pensions the EOBI was paying to the labour force as unfair.

The decision came during the hearing of the multi-billion rupees land scam in the EOBI. Though the development projects were not related to the scam, payments to a dozen under-construction mega office complexes and commercial malls were stopped in June 2013 as a repercussion of the land scam being investigated by the Federal Investigation Authority (FIA).

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“The Board of Trustees, which takes all the decisions, was scrapped on June 11, 2013, after all the 18 members were nominated in the FIR, including the EOBI chairman, Zafar Iqbal Gondal,” a senior official in the EOBI told Dawn, adding how the mega projects had been affected due to the land scam.

The FIA has been investing how the EOBI purchased a five-acre property in Karachi for Rs2 billion in 2012 when its actual value was not more than Rs700 million in 2013.

Payment to under-construction buildings stopped due to a multi-billion land scam in EOBI

Documents available with Dawn showed that the EOBI has already spent over Rs8 billion on the construction of office spaces, cinemas and shopping malls in the commercial complex Lahore, OEC Tower Islamabad, EOBI regional office and a commercial complex in Hasanabdal to mention some.

However, the inordinate delay on these projects has also risked losing business with companies of international standings such as the Serena Hotels. Like other projects, Serena Lahore has been delayed by over a year now.

“It is in the interest of the EOBI to start the development work on such value-added projects. Serena Hotel alone has offered returns on the Rs10 billion Hotel and Commercial Complex in Lahore in six years,” the official said.

Not only has the government lost about Rs6 billion revenue that it could have earned last year, it also has to cough up another Rs200 million demurrage and detention charges to save building materials for the incomplete commercial complex in Islamabad. The documents also showed that equipment were lying at Port Qasim since last year and were close to being auctioned.

Since 1973, the EOBI has collected over Rs87 billion from more than 450, 000 contributors working as labourers in the private sector. So far, it has distributed over Rs69 billion as pensions amongst the contributors. At the moment, the EOBI has assets worth over Rs238 billion, including Rs150 billion in cash.

Using the pensioners’ money, the EOBI has been investing in commercial and residential properties for over three decades. The EOBI website states that it has been investing in commercial, industrial and residential properties since 1982 from Karachi in south to the northern areas.

EOBI either owned the projects completely or has leased them out to private investors to earn revenues. It has roughly 10 per cent share for its office spaces in all these projects.

“The EOBI invests in properties and develops buildings for office spaces and commercial purposes and gives them on lease. The returns are much higher than putting the poor pensioners’ money in banks because it devalues quickly and the interest is quite low. Investing in assets ensures highest possible returns,” said the official, explaining how the Rs20 billion EOBI properties being developed in Lahore, Islamabad and Faisalabad etc would be more than Rs300 billion in the next 20 to 25 years.

These projects are being managed and supervised by Prima Co. which is a subdivision of the EOBI.

When contacted, its CEO Brig Amjad Ali Jan declined to comment on the reasons for the delay to complete the projects.

Published in Dawn, April 6th, 2015

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