ISLAMABAD: Facing financial crunch, the Capital Development Authority (CDA) has requested the federal government to write-off cash development loan worth Rs5 billion.

A source in the interior ministry told Dawn that recently CDA through an official letter had requested the ministry to write-off the loan, it got in June 2016 from the federal government for development work.

He said CDA was given the Cash Development Loan (CDL) on the direction of the then prime minister, and its recovery period was 25 years with fixed 7pc interest rate.

The official source said that CDA informed the interior ministry that it had been facing cash flow constraints primarily because the federal government had not released funds to Metropolitan Corporation Islamabad (MCI), except one time grant of Rs2.6 billion in 2016-17.

He said that CDA pleaded that so far it has provided over Rs45 billion for operation of MCI and for ongoing fiscal year, it had allocated over Rs1 billion for MCI.

Sources in the ministry said that CDA was pleading that it was executing various development projects in Islamabad despite financial constraints, therefore, federal government should re-adjust the said amount in funds provided to MCI and write-off the loan.

They said that the interiorministry is all set to refer the CDA’s request to ministry of finance for their input before moving towards federal government.

MCI was formed in 2016 after first ever local government elections in Islamabad. However, the then federal government of PML-N and its successor PTI did not provide any serious support to MCI.

The MCI was setup after devolving a number of CDA’sdirectorates and till date CDA is paying salaries and other expenses of MCI.

On the other hand, 64-year-old CDA has been relying mostly on is land bank in order to meet expenditures as it has failed to generate any

other serious sources of income to run its affairs and pay salaries to around 15,000 employees.

Some officials Dawn spoke to said there was no doubt the CDA was bound to provide commercial plots, but for the last several decades it has mostly relying on auction earnings to runs affairs.

An official said the authority could generate income by developing residential sectors where it could sell commercial areas for billions of rupees with recovery of pending lease amounts as in many cases, leases of various markets have not been paid after 1996 (expiry of first term of 33 year lease). Similarly, he said that CDA could also generate regular income after setting up its own hotels and petrol pumps.

Similarly, the official said that through public private partnership, civic agency could also generate good revenue, provided deals with private partners are made while keeping interest of CDA.

“Apart from selling plots, there are so many other options to generate sizeable regular income for CDA.. how long our land bank help us,” he questioned.

Published in Dawn, October 1st, 2024